BY: William Huynh
My first experience with Airbnb, a community marketplace where guests can book spaces from hosts, was when I was planning a trip to Miami with a few friends of mine during spring break. It was also the first time I used Uber, a ride sharing service that connects passengers and drivers in local areas. I've known people to use both services when traveling, but of course I was skeptical and had many concerns with not staying in a conventional hotel versus someone's space that they are renting out or taking a taxi versus a random stranger driving me around. Who are these people? Do they have a criminal background? How clean is the space? Will my traveling items and belongings be safe? These were the questions that needed answering prior to me booking my first Airbnb space and Uber service. All of my questions were answered through due diligence of both networks, but it also revealed to me the power of social capital in a sharing economy.
Airbnb provides a trusted network for guest and hosts around the world to accommodate each other's living needs when traveling. Hosts are able to list their properties – which range from single bedrooms, homes, condos, houseboats and even small islands – on the Airbnb website or phone app. It's free to create a listing and hosts decide on the prices and availabilities of their space. Their space is promoted through a listing that includes professional pictures taken by Airbnb photographers and descriptions of the space including its amenities and what is offered. Travelers or guests search the database through entering details about what they want in a space. They can filter through location, price, amenities, host language, size and even keywords that specify a desired request such as "oceanfront view." Once a guest books a space from a host, the guest pays an additional service fee of 6-12% depending on the location to cover customer service expenses and the "Host Guarantee", an insurance policy that covers up to $1,000,000 in damages from a guest, a rare occurrence. Airbnb also takes a 3% service fee from the host to cover transaction fees. The network bridges the gap between guest and hosts by building trust. Both hosts and guests are credible through their reviews from past transactions. This process creates transparency for both parties and credibility from a number of other people because it is required. It was the validation from a number people who stayed at the condo I stayed at in addition to the pictures of the space that drove me to book it when staying in Miami for spring break.
Uber solved another dilemma I had when traveling because I did not have vehicle for transportation. Uber uses a smartphone application to bridge passengers and drivers where customers request rides and track reserved drivers nearby. After tracking a driver nearby your location that is pinpointed through your GPS on your phone, you will receive a picture of your driver, a name, phone number and car model. Once the driver arrives at your designated location, you will receive a text and picture of the car on your map. Fares vary depending on each city using either a per mile rate or per minute rate, on top of a base fare of a few dollars. Also, "surge pricing" occurs when demand for a driver and car is high, usually during inclement weather or peak times such as New Year's Eve. This gives drivers the incentive to get on the streets and accommodate the high demand. If you are curious about becoming a driver, you will need a drivers license, valid insurance, vehicle, be at least 25 years old, pass a background check and be approved after applying. You might wonder what drives people to use the Uber car service versus a taxi cab and it comes down to convenience and personal needs. Uber is able to accommodate riders with a reliable driver and option to choose the type of vehicle service they desire that range from a Toyota Prius to a C-class Mercedes Benz. The convenience and reliability factors were what drove me to use it during my trip.
While both Airbnb and Uber have caused disruptions in the conventional marketplace for hotels and taxi cab services, involved in numerous law suits and restrictions in certain countries, they represent the power of technology to create a social sharing platform facilitating trust through company policies and accountability of both parties involved. They developed a social economy that brings together people to collaborate, connect and share. It was once unheard of to travel to a different country and live in a stranger's home. It was also unheard of to receive a ride from a stranger on the road. Airbnb and Uber have given consumers the confidence and developed a once lost trust between people. Not only is this technology contributing to growth in jobs, but it's going to change the way we live and function now.
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