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Comparison Of Airbnb And Uber

Decent Essays
Over the past decade, there has been significant changes to the technology landscape, economic, and social conditions in the market which fuels the rapid growth of the share economy. The share economy is a concept which has been around for centuries dating as far back as 1914. At the end 1914, a unique blend of events led to the rise of carpooling. A recession struck the US while at the same time there was a large supply of cheap automobiles on the city streets. In the city of San Francisco, car owners began offering seats in their cars for the same price as a street car fair, known as a jitney. Both the recession and the availability of an underutilized automobile stimulated the necessity of alternative ways for consumers and producers to…show more content…
Airbnb & Uber are based on the platform business models which facilitates offering value to both the consumers and producers through the network effect. The consumers are offered a low-cost convenient cashless alternative to either reach a destination or have place to stay while the producers can make more efficient use of their car or a room to make additional income. In addition, both companies provide the ability to easily schedule, make payments, eliminate fear through crowdsource rating, empowers the micro-entrepreneurs, and lower the barrier to entry through low capital investment for both producers & consumers. Equally important, they also offer the micro-entrepreneur the flexibility in deciding their working hours or availability. Both Airbnb & Uber also share a very similar cost structure. There are three major components to their cost structure. The cost of technology, salaries for any permanent employees, and advertisement. As for the revenue streams, there are stark similarities between Airbnb & Uber. Both revenue streams are based on commission with some variation due to the industry. Through the platform business model, Airbnb & Uber are able to offer an optimal value proposition by creating value for their collaborators, customers, and the
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