Thursday, April 24, 2014

'Nice People' & the problem with the sharing economy

I've been meaning to write this post for some time, and this article yesterday was the prompt to finally make me do it. (Image above from here)

Many of the companies in the sharing economy by nature are appealing to what I'd call 'nice people:

Airbnb, which is the biggest company of this type, now valued at $10bn, wants nice people to let other nice people stay in their homes.

There are plenty of other variants -

CampInMyGarden, StoreMates (self-storage in someone's house), GetAround (rent someone's car), Cookisto (takeaway food cooked in someone's house)...  In fact if you Google 'Airbnb for' it comes up with lots of suggestions, including boats and office space.

The problem is, I think, what happened to Groupon.  I think Groupon would have been a great company if it had stayed smaller, dealing only with 'nice people'.  What happened was that people spotted a way to make money, and started opening businesses mainly to offer Groupons - low quality spas, and so on.  This meant that the customer experience started to deteriorate, and it gave Groupon a bad name.

I've stayed in two Airbnbs, in Paris and Seville, and had a great experience both times.  It was brilliant to stay in a local's property, and live like a local, instead of using a hotel, for a lower cost than almost any hotel.  However now you get stories of people buying properties specifically to use as Airbnb rentals which for me is a bad sign.  Yes, these will probably be clearly marked as such by the owners, but it's a different experience, and a different sort of host.

Similarly, at the moment I think the guests are mainly 'nice people' (with some exceptions, obviously).  Even though Airbnb take a fee from you to cover any damage before you check in, I think both of the hosts I had would think twice about doing it if they had to clear up after bad tenants.  It's not just the money, it's the feeling that these people were in your home.

Watch this clip from Dragon's Den when StoreMates were on in 2012:

I think this could de-rail many of the 'sharing economy' companies.

Update - One more - connects travellers with luggage space with people who want things taken to places - can you see any possible drawbacks..?


Pietro said...

Completely agree.

Ciaran said...

Hi Dan - these services exploit an area between social and market transactions. Always reminds me of the “A Fine is a Price” research paper. When a social transaction is commodified then human behaviour changes and goodwill is often lost - and your 'nice people' become consumers with expectations and demands; Thanks for this thought provoking post.

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