Comment by runT1ME | Hacker News Reader

Comment by runT1ME | Hacker News Reader

Parent Full thread

I would be very curious to see what barriers to entry AirBnB has developed vs. say, Uber. While both are marketplaces, Uber benefits tremendously from understanding traffic patterns, from seeing how people ride, from being able to give drivers the option of traveling certain directions, etc. All of that data is worth billions of dollars and not easily discovered, and technically quite challenging to gather and exploit.

From what I can tell, AirBnB has a brand and a web application. Technically, I can't imagine the latter is more complicated than the average e-commerce site delivered at scale. I am having trouble understanding how big data can create an advantage (maybe to help owners price their rentals?). If a competitor pops up, there's no reason owners can't list on multiple sites without facing any penalties.

AirBnB is not a company I'd invest in for the long term, while I would invest in Uber/Lyft. So, what am I missing?

Airbnb has a global network effect: If I booked my last two holidays on Airbnb, I am more inclined to do it also for the next one out of convenience. I'm already verified anf signed up and I know the interface etc... This requires a global network of hosts. Any competitor has to build a global network of comparable density to be compatible.

On the other hand, Uber's network effect and synergies are mostly localized to cities. If I move to a new city and there is a competitor with lower prices, chances are I'll install their app eventually, even if it takes me a few weeks.

In addition to that, AirBnB takes a lot of the headache out for hosts in regards to local laws.

In San Francisco for example, AirBnB collects and remits the local hotel tax on behalf of hosts, making that a non-issue for hosts. But when I used AirBnB in Italy I had to meet the host and they needed to charge me the tax, print a receipt, and had me sign something...all which I imagine was because at the time or in that locale AirBnB had not set up that convenience for hosts yet. And in SF, they only do this if AirBnB is the sole platform you use--if you use multiple then you'd have to collect/remit taxes yourself I believe. Probably not an issue for someone who rents out multiple units and treats AirBnB as their main job, but for the little guy that just wants to make a few extra bucks from an extra couch, room, etc. here and there AirBnB navigating the tax stuff is huge.

Reply on news.ycombinator.com