Renting and Collaborative Consumption
UCLA | ECONOMICS 106T | FALL 2012
TA: SIWEI KWOK | PROFESSOR BOARD
STEVE WU
FRANK LEE
JEREMY REYNARD
Airbnb
For all the lone wanderers or people just searching for a “home away from home,”
Airbnb has created the perfect solution for renters and providers worldwide. Since its inception in 2008, Airbnb started an innovative community marketplace for people to list, discover, and book a wide variety of accommodations around the world. Airbnb has pioneered a new industry of “collaborative consumption” and peer-to-peer accommodation rentals, which leaves room for the company’s potential growth and worldwide adoption.
Airbnb has experienced immense success with over 1 million hosts and travelers, over 10 million nights booked, and over 26,000 cities within 192 countries.1 Despite the substantial growth and potential within this new industry, Airbnb faces several strategic issues moving forward. Airbnb lacks a sustainable competitive advantage, faces a heavy influx of new competitors, and also faces multiple legal and trust issues in the market. Airbnb must determine its direction moving forward or risk losing its competitive position in this emerging industry.
Collaborative Consumption Movement
Collaborative consumption is a term used to describe the “rapid explosion in traditional methods of sharing, bartering, lending, trading, renting, and swapping.”2 Also known as a “peerto-peer online marketplace,” this trend has seen immense growth in recent years. This exponential growth is largely due to the increases in internet-accessibility, online social networking, mobile technology, location-based services, and penny-pinching. There are several online P2P services offered that defy traditional “rental” services, such as renting out your own car, gadgets, parking spot, and even your own garden, among many other things. The ability to rent out almost anything has been a huge advantage to the peer-to-peer economy, as individuals can now
TA: SIWEI KWOK | PROFESSOR BOARD
STEVE WU
FRANK LEE
JEREMY REYNARD
Airbnb
For all the lone wanderers or people just searching for a “home away from home,”
Airbnb has created the perfect solution for renters and providers worldwide. Since its inception in 2008, Airbnb started an innovative community marketplace for people to list, discover, and book a wide variety of accommodations around the world. Airbnb has pioneered a new industry of “collaborative consumption” and peer-to-peer accommodation rentals, which leaves room for the company’s potential growth and worldwide adoption.
Airbnb has experienced immense success with over 1 million hosts and travelers, over 10 million nights booked, and over 26,000 cities within 192 countries.1 Despite the substantial growth and potential within this new industry, Airbnb faces several strategic issues moving forward. Airbnb lacks a sustainable competitive advantage, faces a heavy influx of new competitors, and also faces multiple legal and trust issues in the market. Airbnb must determine its direction moving forward or risk losing its competitive position in this emerging industry.
Collaborative Consumption Movement
Collaborative consumption is a term used to describe the “rapid explosion in traditional methods of sharing, bartering, lending, trading, renting, and swapping.”2 Also known as a “peerto-peer online marketplace,” this trend has seen immense growth in recent years. This exponential growth is largely due to the increases in internet-accessibility, online social networking, mobile technology, location-based services, and penny-pinching. There are several online P2P services offered that defy traditional “rental” services, such as renting out your own car, gadgets, parking spot, and even your own garden, among many other things. The ability to rent out almost anything has been a huge advantage to the peer-to-peer economy, as individuals can now