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Uber Economy Airbnb

Are Uber and Airbnb taking consumers for a ride? And can the old guard seize the initiative in 2016?


By Dom Burch, managing director

January 4, 2016 | 6 min read

If 2015 was the year of the sharing economy, will 2016 see the renaissance of the old stalwarts as they get to grips with the new kids on the block?

Are Uber and Airbnb taking consumers for a ride?

Watching the exponential rise in dual sided marketplaces like Uber and Airbnb and has been a pleasure to observe.

Consumer champion brands, seemingly built overnight, riding to the rescue of beleaguered individuals.

Start-ups and disrupters flourishing while traditional incumbents struggle to make sense of the new world order.

Uber and Airbnb have brilliantly mopped up demand for ubiquitous services and taken advantage of under-utilised assets like private cars and spare rooms in people's houses.

Cards on the table, I'm an advocate of the sharing economy. Me and Obama both. Last year he took a stand in favour of the sharing economy at a White House Summit on Workers Voice, albeit couched in terms of employee security.

He reportedly said: “We’ve seen an explosion of American innovation in the workforce. And because of technology, people are empowered and employers are empowered to create value and services in new ways …”

As a regular Uber customer I have even been prepared to defend the brand in the face of some of the most hysterical criticism levelled at it.

I also joined Love Home Swap four years ago, dreaming of switching my family home in Yorkshire for a penthouse in New York or a ranch in Texas. The £150 annual fee seemed worth a punt, as one holiday booking a year would more than cover the outlay.

But, here's the rub.

It turns out those penthouse owners I contacted didn't want to swap with me. Why a Manhattan millionaire didn't want to spend a week in Bradford during October half term is beyond me, but there you go.

Uber, too, has started to let me down.

During the office party season in my hour of need, I wasn't prepared to pay three times the usual price to get home, so I called a mini cab firm instead. Some reports suggested the surge pricing reached nine times the usual cost on New Year's Eve.

This weekend, it was the turn of Airbnb to disappoint. On a last-minute trip to London on New Year's Day with the family, the need for accommodation at a reasonable price should have seen Airbnb come into its own.

As revellers returned home to nurse their hangovers, our train rolled in to the big smoke. But in spite of seemingly lots of availability, making a booking was problematic.

A lovely renter explained he would have trouble getting his housekeeper out to clean the apartment on the first day of the year. How about the day after? He only takes bookings for two consecutive nights. Sorry.

Another wanted £60 for cleaning up after us, and a £400 deposit upfront for any potential damages. My kids are messy, but they're not that bad.

Reluctantly I resorted back to a trusted hotel aggregator site instead and found a family-sized apartment for £99 in Earl's Court. Bingo.

So what to make of the not-so-new kids on the block who are now some of the biggest in their respective neighbourhoods?

As Tom Goodwin of Havas famously coined last March: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”

But with scale and size comes responsibility. A quick search for 'Uber lawsuit' returns a class action website as its top result.

According to the website, Uber drivers have filed a class action lawsuit claiming they have been misclassified as independent contractors and are entitled to be reimbursed for their expenses that Uber should have to pay, like for gas and vehicle maintenance.

The lawsuit also challenges Uber’s practice of telling passengers that the gratuity is included and not to tip the drivers, even though, it states, drivers are not getting a tip.

They're not alone.

According to Recode, in 2016 Airbnb will need to prove to regulators that it is not deriving huge chunks of revenue from people operating hotels through the service, or from listings that are effectively full-time Airbnb rentals.

The disrupter darlings of 2015 are waking up one year older, but with even more responsibility than before to justify their top billing and valuations.

As these relatively infant companies make the transition to unruly teenagers, they will need to grow up even more quickly.

Great brands provide great service, day in day out. They engender trust and drive loyalty by repeatedly delivering on their promise.

The old guard has an opportunity this year to raise its game once more, by relentlessly focusing on the customer, but unlike the new kids on the block, resisting the urge to take them for a ride when they need it most.

Uber Economy Airbnb

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