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The Sharing and On-Demand Economies – Why I Love UBER and AirBNB

John Doherty —  December 23, 2013
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I recently had to go through the challenge of finding an apartment across the country, while also in the midst of starting a new job and the holidays. I couldn’t have done it without UBER and AirBNB.

For those of you not familiar with them, UBER is “Everyone’s private car service”, an on-demend car service that you use to call a personal car. It’s a much better experience than trying to hail a taxi, which is easy(ish) in New York except on rainy days and less easy, yet doable, in San Francisco. Uber costs a bit more than a regular cab usually, except for eco-friendly Pruis-driving UberX vehicles.

AirBNB, of course, is the epitome of the “sharing economy” mindset where people put their own apartments up for rent for a nightly or weekly fee. While it is a controversial service, I have met many who use AirBNB and love it, both hosts and guests. I think of AirBNB as a premium CouchSurfing experience, since you find interesting places and people to stay with wherever you may be traveling.

Loyalty, not Habit

Both UBER and AirBNB have zeroed in on the convenience factor of business. Some businesses, like Snapchat, are what one of my favorite books, The 22 Immutable Laws of Marketing, calls a “fad.” These are a flash in the pan that peaks early, often because of so-called “viral growth”, and then trails off and in the Internet world eventually dies. The Internet is littered with them too – Turntable.fm, Groupon, SocialCam, (insert Facebook app here). Check out Socialcam’s search volumes in Google Trends:

socialcam

I’d even argue that right now Snapchat and Pinterest are both fads, and we will see over time if they can become trends.

pinterest-snapchat-fad

When building for the longhaul (a “hundred year business”, as the Evernote CEO likes to say), you set out to engineer something that builds loyalty, not just habit. A product or company that builds loyalty can still see “viral” growth, in that they grow very quickly and people use them often (aka habitually), but their focus on experience is what sets them apart. Then they become a trend, likeĀ Zillow:

zillow-trend

Then they go and make you feel special, such as sending you a gift card for a similar service:

Both UBER and AirBNB have built loyalty with myself and many others I know (given, I’ve been living in NYC and am moving to SF). When moving out of my apartment in Park Slope, I used UBER when I was moving the last of my boxes. I knew that I could load up the app on my phone, and within 5-10 minutes I would have a black SUV at my door to help me out with taking my boxes, and I knew that I would get a great experience. I could have called a cab, but I didn’t.

Similar with AirBNB. I have become loyal to them, to the point where I asked special permission from my boss at Zillow to stay in AirBNBs in SF instead of hotels downtown. I was able to get to know both the Mission and the Castro because of staying in them for a week at a time in an actual apartment instead of a hotel.

Both services also know who I am, which as I’ll cover in the third section makes them even more valuable.

Local-based Knowledge

Check out the list of UBER Twitter accounts that I found on a recent Followerwonk search:

They have a Twitter account for every major city. When I’ve left a note about a driver or let them know about a bad experience, they’ve been quick to get back to me on email or Twitter. This lets me trust that the person behind the account knows approximately where I am and what is going on in that area. They can’t immediately give me a better route to the airport, but they can make me feel better that I’m being listened to.

AirBNB is in another category. They’ve invested years of time, effort, and money to produce their local guides. AirBNB isn’t just a housing site – they’re a travel site invested in getting you familiar with the city you are visiting so that you can make the best decision possible about where to stay. Check out their beautiful Park Slope page -

I actually used AirBNB while checking out neighborhoods for where to live in San Francisco. Not the typical use case, but that’s indicative of a trend not a habit as well – you figure out new ways to use the service to enhance your life.

Personal

Finally, they’re personal. UBER knows who I am because I use the service. I have a profile (complete with a star rating) that the driver sees when I request a car, and I see theirs. Apparently, if my star rating gets below 4.5 stars, I won’t be allowed to use UBER. Wow. This makes sure that both the person and the driver are accountable, and serves to make UBER a trend instead of a fad.

The customer support people at UBER know who I am as well because of my profile on the site. Everyone gets personal attention, also adding to the overall experience and making you “feel like a badass”, as the UBER founders describe how they wanted to feel when founding the company.

AirBNB goes as far as displaying your profile online for all to see. Here is mine:

Not only do you review where you stay, but they review you as well and the reviews are made public at least to potential hosts. Not only does this build in accountability (just like UBER), but also serves to personalize the service to you. AirBNB is becoming my canonical travel profile online (which is what Foursquare really should be) and I love them for it.

The Future of the Sharing and On-Demand Economies

Look at a few of the characteristics I’ve covered:

  • Personalization
  • Transparency
  • Extendability
  • Platform-ability

These characteristics can and should be taken to other verticals as well. Zillow and HotPads, for example, do this for you when you are logged into the site or mobile app. I am consistently surprised how few sites actually do this and I think it’s the next step for both the sharing and on-demand economies.

John Doherty

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I'm the Senior Marketing Manager of HotPads.com, based in San Francisco. Previous to Hotpads I worked at Distilled for 2 years as an online marketing consultant. In my spare time I shoot lifestyle photography, ski, rock climb, and update my Twitter and Google+ accounts.

2 responses to The Sharing and On-Demand Economies – Why I Love UBER and AirBNB

  1. The only problem that exists right now with companies like Uber and AirBnB is that entrenched interests (hotel lobbies, taxi companies that own all of the medallions and licenses, etc) are trying to use government force to shut down their better and swifter competitors. Just 5 years or so ago, I thought that the sharing economy would have been something like Facebook – where attention and commerce was directed through social sharing. But that’s turned into more of a commercialized and centrally controlled wasteland, between Facebook ads and the types of third party services listed at BuyLikesReviews Facebook is increasingly useless and now just the old fashioned face to face or phoning your friends is a better and more pleasant way to maintain relationships and find out about new interesting services. I’d like to see more new startups try and compete with these entrenched interests because it only serves to illustrate how much humanity is held back by the institution of government. IMO the invention of the Bitcoin protocol is going to be a major turning point for decentralized consensus – money is just the first product but the protocol will revolutionize communications and contracts and reviews and other areas of society because there is no one centralized nexus of control. That threatens some but delights me.

  2. Hi,
    I personally love the idea of both of these companies because the idea of “The customer is always right” is no longer true- you are graded on how the experience is with you as a consumer. Do you think this builds loyalty with workers (or in AirBNB’s case, host houses) as well?