Strategy Lessons from Uber and AirBnB

The growth of peer-to-peer websites and apps: Driving personalized content. The growth of peer-to-peer websites and apps is changing the face of some historically high volume, low margin operations.  Airbnb and Uber are making the hospitality and taxi industries sit up and take notice.


Strategy Lessons from Uber and AirBnB


Airbnb, a San Francisco based social networking services, allows homeowners to list their property for rent.  Over half a million properties in almost 200 countries are listed and every property is associated with a host, whose profile will include recommendations from other users, reviews by past guests and a private message function.  Similarly, Uber is an app that allows smartphone users,to rapidly call for a taxi, UberTaxi or UberX and have the driver arrive quickly with payment by credit card through the app.  SideCar is another app that allows private citizen drivers to offer rides to other people in their community.

These peer-to-peer exchanges bring a personalized element to travel and transportation with the end-user being given access to a more comprehensive network of services – a network that will have lower advertising and staff overhead than a traditional supplier.  Other than certain niche players, the hotel industry has not enjoyed high margins but has relied on high volumes to ensure profitability.  With Uber, the entire fare is collected by Uber with a portion going back to the driver.  There are currently some issues at present as Uber has an “all in” price model with similar or slightly higher fares to conventional taxi services, with the customer being told that no additional tip is required but where Uber drivers feel that they are not receiving compensation similar to a regular taxi driver once the tips are factored in.  SideCar may further drive down costs as sociable drivers look to bring down the cost of a trip they would be making anyway versus driving to make a living.


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