For a while there I was much more likely to book an Airbnb for any trip I was taking. Then the fees went up, like way up. Suddenly the cleaning fee and Airbnb fee doubled the charge and I started noping out of the booking.
Same thing for Uber. In my trip history back in 2018 and earlier I could take an Uber or Lyft between my house and office for around $12 and now it's $40.
Rationally I understand why fees go up, how the fees were being kept down artificially to get people hooked, the effects of inflation. Rationally I understand supply/demand and how all this is complex and tied in with local regulation, taxes, the housing market, etc. Hell, I own a short term rental.
The fundamental problem with all these companies is that shareholders demand growth. Not just steady business growth but like real fast quarter over quarter growth.
So execs now are only interested in milking money to keep share prices high, even if it hurts the business long term. By the time customers really NOP out, primary shareholders and execs will have exited their positions.
The bagholders will be the remaining shareholders and the folks who got a 30 year mortgage counting on this Airbnb income forever.
When I started using Airbnb it definitely was more affordable than hotels
Now a days I almost always book hotels instead - especially for 1-2 day visits - as it always tends to be cheaper, less complications, and offer more value imo
It's debatable which SV debacle is the worst, but Airbnb and Uber are probably the most baldly extractive examples; they had no long-term strategy beyond grabbing a stake in the lawlessness and attempting to own that segment somehow, forever.
These will be the first to go down as interest rates do not, because they do the opposite of creating value.
The irony is that Airbnb and Uber were created to try and make use of spare capacity i.e. Spare rooms, floor space, extra passenger spots in people's cars.
Instead, it created an economy where people increased the amount of housing they had or bought cars dedicated to driving Uber. This seems like a hard problem to solve.
I'dsay Airbnb is several orders of magnitude worse because housing stock is generally extremely limited and most places have very low production rates.
Services like Uber have quite a few tangible benefits that put it in another category for me.
There's a combination of factors, of which some are:
- Holding cost of land is near 0 in most cities, so you can use it extremely unproductively without any issues. There's a Christmas tree farm in a central suburb in my city; it could easily hold a 5-story apartment block or 8 townhouses housing tens of people instead. [Solution: land value tax]
- In most Western democracies, there are significant regulatory requirements that make it more expensive to build housing. This isn't necessarily entirely bad, but it does increase the cost to build more housing, thus reducing its supply. [Solution: there's no real easy solution for this one. Some regulations are necessary, it's hard work to make the regulations really good]
- In most cities, there are restrictions on what you can build and where. Again, not always entirely bad per se, but the settings are usually dialed up to the point of absurdity. This means even if you wanted to build more housing within some suburb, you might be unable to build it densely enough to increase how many people are housed. [Solution: more flexible zoning laws to enable more freedom in what people can build on their land; if you want a standalone house, go for it, if you want a 28 story apartment block, go for it, if you want a 3-story townhouse row, go for it, if you want a work-and-live store with an apartment on top, go for it]
- Even in areas where there are fewer restrictions, e.g. new land areas opened up for development, developers are incentivised to keep the available supply of housing low to keep the price high. This means that a large development of hundreds of houses will often only release the houses 5-10 at a time, artificially reducing supply. [Solution: increase the holding price of land, aka land value tax]
Zoning, permitting, and property taxes (especially in California) encourage people to just sit on old properties instead of using them more efficiently.
I agree about AirBNB but Uber seems like an upgrade to taxis. Taxis were always expensive (more than Uber), filthy, and unreliable (they’d take a longer route than needed etc). Even in NYC, I still often find Uber is cheaper and easier than a taxi.
They do the opposite of creating value? Are you serious? What bubble do you live in?
Not just to me but to many millions, both uber and airbnb have be almost life changing. I don't want to write long-text here so I will just say that taxis, hotels and in-person grocery shopping can die a slow and painful death and it will bring me much joy.
Uber and airbnb created value using technology by solving many pain points of consumers.
My main beef with them is how they lack transparency.
I think if they manage to remove even more humans from the loop with the right legal regulation, it would be even better for consumers and shareholders.
Perhaps there’s a case for Uber… having a decent app-based way to summon a ride is a net positive. But the experience is even better in European cities where Uber has successfully integrated with the local taxi system rather than competing with it.
Hotels have always been a better experience than AirBnb, and in the last few years at least, a much better price too.
And I’m glad shopping apps exist for when I’m sick or whatever, but for the common case the extra cost and hassle is strictly worse than just swinging by the store on my way home.
> Hotels have always been a better experience than AirBnb, and in the last few years at least, a much better price too.
I find AirBnb to have far more options, generally better prices, usually better rooms, almost always more amenities, often better locations, and frequently better/more personable hosts. It's completely changed travel for me.
Before AirBnb I was shoehorning my travel plans into the limitations of the hotel, but now I can have a common private space for my entire travel group, cook my own meals in a real kitchen, and have dinner on a patio or a backyard.
The hotel charges me a premium for unneeded housekeeping, bland continental breakfast, and valet parking that I won't use--this model was ripe for disruption, regulatory arbitrage aside.
I travel mostly for work, and I want something above all easy and reliable. I'm expensing all my meals so restaurants aren't a problem.
I hate the uncertainty of AirBNBs. They have greatly increased probability for booking issues, not being as described, weird dynamics with neighbors, and arbitrary cleanup/checkout processes.
If I was staying with others, on my own dime, for more than a few days, then yes, the calculus does change.
>Perhaps there’s a case for Uber… having a decent app-based way to summon a ride is a net positive. But the experience is even better in European cities where Uber has successfully integrated with the local taxi system rather than competing with it.
You'll get very different answers about Uber depending on who you ask, and in what country they live.
I think all this really points to the regulation of taxis being a complete and utter failure in much of the US, especially certain large cities there.
> Hotels have always been a better experience than AirBnb, and in the last few years at least, a much better price too.
I won't repeat what I said in a sibling comment but Hotels still suck with location, appliances/furniture, square space and experience. Booking them, figuring out costs,etc... is still horrible. And most hotels nickle and dime you on so many things. Plus having to interact and deal with noisy neighbors, bad concierge, queues,key cards,etc... is horrible. If you do this with frequency I promise all this is noticable.
> And I’m glad shopping apps exist for when I’m sick or whatever, but for the common case the extra cost and hassle is strictly worse than just swinging by the store on my way home.
This is a personal thing but I hate having to go to stores. Before all these apps, that hassle alone was a big reason I was eating fastfood all the time.
Bottom line is: these apps make available experiences that are otherwise inaccessible to many people. I am afraid I would be willing to pay more to them if needed and support them with legislation/ordinance. Next to rent, these apps take mostlf my pay check now to put it in perspective.
So while your experience maybe different, I promise you, the value they have created is bigger than what even amazon and walmart have created.
> But the experience is even better in European cities where Uber has successfully integrated with the local taxi system rather than competing with it.
In my very limited experience, this may also be because Uber faces far more competition in Europe. I lived in Lisbon for several months a few years ago and there were several relatively local ridesharing apps, for various definitions of "local".
> Uber and airbnb created value using technology by solving many pain points of consumers.
I don’t think this is as the USP airbnb was going for.
Companies like Booking.com, trifago.com and Hotel.com existed prior to airbnb and had a pretty decent “human-less” UX.
I thought the usp of airbnb was that everyone with a place could rent it out on that platform. That should increase the supply. It worked pretty well for a while and still does so to a certain extend. Regulations make its service useless in some countries though.
I’m not sure what Uber did to improve the market but they’ve always been dearer than taxies where I’m from. I don’t mind giving a taxi central a call either…
Those sites are for hotels. Hotels suck in many ways, a mid-range airbnb has more space and amenities than high end hotel suite. I've stayed at super expensive vegas suites and dubai hotels and their TV is shit at both places. Nice bedsheet but meh beds, less space, less privacy, can't compare their kitchen or sofa to even a low end apartment airbnb. Also, this is real-estate, "location, location, location". I've stayed at several airbnb's inside or right next to national parks!
Uber? Are you kidding me? You don't remember how horrible it was getting taxis to just show up? They cost a fortune by comparison too. And every cabbie tries to cheat you. I've even used Uber for daily commute and it was cheaper than my own car! Cost aside, the reliability and user experience is much better. Now, had taxis come together and built an app to improve ux, consumer cost,increase consumer base and reduce fraud the I'll give you thar Uber would have had to compete. But man, I for one was very glad to see their medallions' value get decimated for the horrible way they treated me in the past.
> Now, had taxis come together and built an app to improve ux, consumer cost,increase consumer base and reduce fraud the I'll give you thar Uber would have had to compete
This existed, it was called Hailo and they operated a (mostly) franchise based model. Uber drove them out of business by breaking the laws and spending more than they earned.
Never heard of them till today. I remember frantically searchit for something like this because finding a yellow cab to come pick me up when stranded caused me a lot of misery.
Airbnbs only make sense in rural areas. Hotels are more competitive in terms of price and location inside of cities. Cities have enough to do that I don’t want to be inside of my room that much during my trip, so space and TV simply don’t matter to me.
Even in cities, would you rather have a clean well furnished apartment with plenty of space, nice tv, nice kitchern and a nice view or a hotel? The only pro I can think of by comparison is room service and maids cleaning up or if you actually make use of concierge services.
Fair enough. You're right about me wanting to avoid interacting with people, especially when tipping is involved. But keep in mind, many people travel with others and airbnb is still a better option if you want to party a bit or have kids. Can't beat a private pool at an airbnb house or to entertain guests at a fancy airbnb.
Some of us also like not having to check every lamp and decoration in a bedroom/bathroom wondering if there's hidden cameras in it placed there by the "host"
I’m surprised people have as much of a huge problem with AirBNB as they do, VRBO has existed basically forever and is a non Silicon Valley version of the same service.
The social consequences of cars was "white flight" and decimation of inner cities. Super bad. But hardly a reason to avoid cars. The real cause was lack of public transportation to suburbs which is a failure of policy.
Same with airbnb, blame lawmakers for failure in policy and try to change that. Avoiding the technology/system won't change the supply/demand economics.
There’s other policy failures with cars like parking minimums and single family zoning, as well of lack of requirements that roads be pedestrian friendly.
I think they certainly do offer value in terms of customer experience. But behind the scenes, they rely upon unsustainable business models dependent upon Saudi oil wealth and other VC capital, while shoveling externalities back to society.
We're just mutual randos, but let's see where we're at in two years. I think that a different set of priorities will have begun to dominate things by then.
To me this seems like a good thing. Housing market is way too high. I don't have much sympathy to real estate investors when there are so many people who can't afford housing. The market needs to adjust.
Sympathy or not, I don't think the problem was evil investors. Imagine you're retired, or close to retired, and you've got your various nest eggs of money that you need to live off for the rest of your life. Keeping it in cash means losing to inflation. However, the Fed had interest rates so low that buying safe investments like CDs or Bonds also meant losing money to inflation. So you can pick a very volatile stock market, or buy / finance real estate. What option would you pick?
And the interest rates for mortgages are strongly (although indirectly) coupled to those Fed rates. So low Fed rates means practically free cash to drive housing prices up.
You're looking one layer deep and saying, "See! Those people bought all the houses!". I think the Government/Fed are the next layer of the problem. Maybe looking two layers deeper, we could see why these policies happened...
I honestly hope the housing market crashes back to sane prices, but I'm not unsympathetic to the home owners or investors who will get screwed when that happens.
It's easy to have sympathy for the otherwise destitute grandma who has a little apartment she rents out and lives off of that rent. But as a society we'd be better off if the default for investment was to find a relatively low-risk, dividend-focused index-fund/ETF.
The financialization of housing is a bad idea for the same reason we don't want healthcare and education to be mainly/exclusively for-profit (because housing, education and healthcare all benefit society when they are plentiful and affordable) - or for the same reason: basic infrastructure, the fire department or the police.
> It's easy to have sympathy for the otherwise destitute grandma who has a little apartment she rents out and lives off of that rent.
I'm not talking about sob story grandmas. I'm talking about people in the tech industry who got educated, saved their money, and want to retire. If that's not you now, it could be you in a few years. It made a LOT of sense for them to buy expensive houses, and maybe to rent them out.
> as a society we'd be better off if the default for investment was to find a relatively low-risk, dividen-focused index-fund/ETF.
When Fed rates were at/near zero, which ETF was giving dividends above inflation? [!] Even now with Fed rates at 5% (and CD's returning similar), Vanguard's Dividend Appreciation fund (VIG) only gives 2%, and there's plenty of volatility/risk there. I don't have the historical record for VIG's dividend rate, but it wasn't must better, and I don't think you'll find any (relatively safe!) ETFs now with dividends above 3%
So while I can agree that would be a better society, it's not the one we live in. Who should we blame? Investors? Politicians? Voters?
I suspect you're going to say "Capitalism", and I'll bow out of that conversation
[!] I'm sure you can find several one-off stocks that have/had high dividends, but that's not something most people would feel safe putting their entire retirement in.
I'm not blaming individual actors acting on incentives, yes the problem is systematic not you personally buying an apartment and renting it out (just like climate change is not your fault personally if you drive an SUV).
A decade+ of near 0% interest rates had some negative effects on society, one of them is incentivizing actions that made housing increasingly unaffordable.
A huge drop in revenue is obviously bad for those who rely on that revenue, but just seeing numbers like 40% doesn't help me understand how big a deal that is. For those relying on the income it may be significant, but for those who are just making some extra money on the side, it's not so much of an issue.
in my experience, AirBnB expanded way past fun/unique travel experiences and into direct competition with hotels. Except shittier and way more expensive. I started refusing to use airbnbs for business travel.
Hotels: way cheaper, particularly once you count the cleaning fee airbnb charges; standard amenities; no figuring out how to get in or get keys, you just show up at the desk; reliably have an iron; reliably have spare toiletries if you forget a toothbrush or toothpaste; reliably deliver what they advertise (instead of oh, the AC "works", but don't touch the thermostat or you'll break it and we'll fine you and btw it's set at 76F in Austin), etc.
anecdote, but I know others with the same experience
In some poorly designed markets, AirBNBs also started competing with long-term rentals. The fact that they're the ones caught with their pants down when the tide goes out is not surprising.
My current pre-WWII mid-sized-US landlord just sold my rental for $185,000, purchased by a couple as their "first second home [AirBNB]." The half acre is all it's worth, as the house is a push-in; around these parts, this should be worth $35-60k.
Right after the Deed conveyance, a tree fell onto the property knocking out two telephone poles. The HVAC has quit. The septic no-workie [why it was sold, by SlumLord]. Sitting atop a VERY ACTIVE landslide.
I have been trying to "watch out for" the new buyers, but their wishful-thinking/eagerness to renovate and "start making the big bucks" has just been so horrifically comical. I am not enjoying myself, telling them facts about this dilapidated structure [which I have happily lived in for many years].
THIS. TIMELINE. THO.
Having a really hard time suppressing "told'ya so!" I hate seeing people suffer, but am not wrong when I relayed that "the entire neighborhood is sick of AirBNBs, so they're already sick of YOU."
Typically, transient people wheeling suitcases around crowding the halls of "party" apartments who throw neighborly consideration to the wind and act like spoiled children who just discovered drunken screaming, pool piggyback, and 3 am drunken stumbling and shouting on ice-covered pools.
It is/was possible to turn a profit on illegal? Airbnbs in excess of $10k/month in more desirable units.
Ironically AirBNB seems like it's fueled by a lot of rich tech 'hipsters" who are what the right might consider "woke" and probably support the environment (on Twitter), universal healthcare, lower rents for the poor etc...
AirBNB is bad for rent, and the environment. Less homes for families means we need to build more, building more takes supplies like lumber and add to global warming etc.
It's bad for the middle class and working poor because the obvious reasons of it creates a housing shortage.
If I were hotel chains, I'd buy up the AirBNB homes as they go way down in price and rent them to single families just to ensure that hotels are the only option in town, plus it would be good publicity if they're affordable and decent landlords.
I feel like I read about Airbnb's collapse every other month. Anyone showing random data on twitter and expecting a brand- which is literally a verb and doesn't even require paid marketing - to collapse 40% is laughable. I must also point out that a 40% drop is not reflected in the stock price (which is actually up quite a bit) or in the forward guidance. It is also interesting, that supposedly data driven people in Hacker News would fall for some random tweet.
Can confirm anecdotally. In Seattle the bulk of the houses coming onto the market are from people old people moving out and former air b&b setups with wired layouts
The US does not have a shortage of single family homes. It has a shortage of single family homes that are being used as single family homes.
The data in this video is unambiguous. Sales down 40-50% in cities where there are 4x more Airbnbs than homes for sale. Some of those houses WILL be entering the market as operators cannot handle the negative cashflow. These will be either hard or soft forced sales but let's be clear, many sellers will have no say in the matter.
Fail to understand this dynamic at your own peril. Housing is not nearly secure as many people are suggesting at the moment.
Probably that it would only take a small uptick in sellers/inventory to push the price equilibrium down and pretty quick you’d see a lot of recent buyers with negative equity. There have been 3 years of eviction protections and despite mortgage defaults going up, foreclosures have dropped. The market has been severely manipulated and at some point it’ll return to a normal market. Also something like 27% of mortgage holders would be forced to sell if they lost their jobs. If we go into a recession, there will be lots of forced sales.
It is a pretty common phenomenon that parents continue to live in their single family home long after all the children has moved out. At least in Sweden this is definitely the case. Not really a lack of single family homes, but too much friction for people to move to a more fitting home.
I'm referencing the 2M+ short term rentals in the US. Obviously not all of them are but let's just say more than half. That's a lot of inventory sucked off the market. More than double the total number for sale right now.
The series of tweets don't seem coherent and the data therein questionable at best, but if it happens, I'm sure there won't be too many people shedding a tear for the people who've made it their job to inflate housing prices everywhere
Same thing for Uber. In my trip history back in 2018 and earlier I could take an Uber or Lyft between my house and office for around $12 and now it's $40.
Rationally I understand why fees go up, how the fees were being kept down artificially to get people hooked, the effects of inflation. Rationally I understand supply/demand and how all this is complex and tied in with local regulation, taxes, the housing market, etc. Hell, I own a short term rental.
Just my two cents.