It was either this or the tip of the iceberg pic.

It’s Not About The App

A New Marriott Division Goes Head-to-Head With Airbnb

The hotel company is betting big on vacation rentals to compete with the surging home-share industry.

-Elaine Glusac via The New York Times

…*sigh*

PART ONE: Because Uber Is Trending

Gotta get that SEO

Back when Uber first started, everyone focused on the app.

You tapped a button on your phone, saw a driver head to your exact location, and within a couple minutes you were off to your destination. This was in such a stark contrast to the taxi cab experience at that point, which necessitated either being in a highly populated area (and having to physically hail one down) or calling the company to have one dispatched to a numbered address you provided them. To this day, regardless of what you might think of the company itself, Uber’s user experience is still somewhat magical.

However, within a couple years of launch, many regional taxi cab companies invested in phone app clones themselves, and an interesting thing happened: nothing. Uber continued to dominate the regional markets and has now gone public as a global player.

All of this is to say it’s not about the app. It generally never really is about the isolated bit of technology. The real killer feature is how that technology enables you to rethink the entire business.

PART TWO: What Uber Changed

Spoiler Alert: Everything

The core technology Uber leveraged was mobile. High-speed networks, GPS, and a rich user interface allowed Uber to change everything. Yes, it meant people could just press a button for a ride, but it also meant so much more.

1. GPS on every phone made it easier for anyone to become a driver. This had already started with standalone GPS devices, but putting it on the phone (something everybody was starting to have) and integrating it with the app that directed drivers to precise locations (with or without a numbered address) took the concept to a whole new level.
2. The increased ease of being a driver led to, well, more drivers. And more drivers meant reduced wait times and prices compared to the relatively smaller taxi fleets.
3. The lower wait times and prices led to more users. These users, within the apps themselves, were able to review drivers and provide feedback, enabling long-term quality control beyond the initial background check. These reviews were actually mandatory back in the day, thus ensuring that drivers were being constantly vetted.
4. All of this ongoing traffic data was then leveraged to preemptively direct drivers via GPS to locations that were going to be busy, and notify inactive drivers of opportunities during time periods of high load.

In comparison, when taxi cab companies introduced their phone apps… that was it. They still had a fixed fleet size, large overhead due to their top-down structure for quality control, high upfront costs for drivers via monopolized taxi medallions, no optimization of all their data & knowledge to improve the overall user experience, and a litany of other things that I can’t fit into a single post.

The taxi companies were making a superficial change while Uber was changing the entire business.

PART THREE: Back To Airbnb

Witty section titles are hard

This same analysis applies to Marriott and Airbnb. Airbnb has fundamentally changed the business of travel. Marriott creating a “marketplace” site or app is a superficial change. The article itself notes that the listings will be onboarded and operated by Marriott or select partners, meaning this entire system will still have the enormous overhead of the old business model.

Now, none of this is to say there isn’t a place for this. Taxi cab companies are still a business. And the Marriott will continue to be a business as well. Even this new marketplace will probably make a nice revenue stream for them, given that it is different and there will be people who will value those differences.

But to characterize these superficial changes as actual competition to the Airbnbs and Ubers of the world misses the entire point.

It’s not about the app.

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Hi

This is the post-credits scene

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