The Sharing Monopoly: AirBNB + Amazon + Uber
I was recently thinking about Uber and AirBNB, and whether what most people term “the sharing economy” actually exists or not. The explosion of companies trying to do Uber for Food or AirBNB for pet-sitting is incredible, and I don’t mean that in a positive way. To paraphrase Peter Thiel, the Harvard of Kansas is not Harvard— in reality, the “something of somewhere” is the nothing of nowhere.
Really, AirBNB and Uber are the only true players in the sharing economy: they both fill huge pain points that are just as painful every time we encounter them. Finding a cab in a busy city sucks all the time. Trying to get a nice hotel at a decent rate is terribly difficult almost everywhere. On the other hand, food delivery is not that painful. It’s simply for convenience because I can’t be bothered to get up from watching TV. Trying to get someone to watch my dog for a weekend isn’t tough either; most people love dogs, and I can always ask my little sister.
Ultimately, this all boils down to convenience when faced with difficult tasks. How can I get from A to B as easily as possible? Uber solves that. How can I get a great deal on a place in Rome for 5 days? AirBNB solves that. The sharing economy is not at all about sharing — it’s about logistics and efficiency. So which company is arguably the best at global logistics? That’s right, NYT’s target du jour: Amazon. All of this leads me to a truly insane idea. Why don’t Amazon, Uber, and AirBNB merge? Ok, that merger would be a pretty big deal and it sounds crazy, but follow me for a bit.
Let’s talk about Uber first. Uber is the paragon of convenience. Travis Kalanick & Friends have set up a global urban logistics infrastructure. No solution to the transportation nightmare that is the modern city has been as efficient as Uber. The only reliable way to get a cab in eras past was to call the dispatch center; that still required one to wait for an available cab and to engage in a cash transaction. The Uber app has eliminated cash transactions altogether and can set people up with rides in 5 min or less in most cases.
That’s not all. Now, with the launch of Uber Eats in some major cities, Uber is venturing into the delivery business full time. Now, my life is even easier. I can take an Uber to work, get an Uber driver to deliver my lunch at the office, and take an Uber back home. That’s a pretty impressive value-add in severely congested metropolitan areas like Manhattan or LA.
Let’s turn our attention now to AirBNB. The company has turned the hospitality industry on its head by letting people rent out other people’s homes hassle-free. You can now “live like a local” without saying it in the way that some tourists do. In just a few clicks, I found a cozy apartment in Paris for $352/ week and the host had twenty 5-star reviews; I was able to request a booking in under a minute. If that’s not efficiency, I don’t know what is. Due to AirBNB, the biggest barrier to traveling is now the cost of plane tickets.
Unlike Uber’s transportation and delivery services, AirBNB has not launched services in multiple markets. Regardless, the company’s success in the global hospitality market is no small feat. If AirBNB does choose to enter another market, I hope they try to disrupt the airline industry. While it’s wishful thinking, nothing would be better than booking both a round-trip flight and a place to stay on one app in a matter of minutes. It’s quite unlikely that AirBNB will do this, but that’s why this merger makes sense: Uber could plausibly do it.
Finally, let’s talk about Jeff Bezos’ evil empire. Amazon started off as an online bookstore but has grown into the biggest consumer e-commerce company on the planet. Indeed, it’s the biggest retailer, period. With Amazon Prime I can get practically anything shipped to me within 2 days. Throughout college, I used Amazon to rent or buy textbooks; it consistently undercut bookstore prices at Georgetown. Even Trendify uses Amazon Web Services to host our site and serve content on our web app.
Even more impressive, Amazon has cut Prime shipping times dramatically. Prime Now launched in Manhattan recently, promising one hour shipping by bike messenger. If that’s not impressive enough, Amazon Prime Air is the company’s new drone delivery initiative. Prime Air claims that it will launch when it has the requisite regulatory support and will offer delivery times of 30 minutes or less.
Amazon is undoubtedly excellent at fulfillment / delivery. However, they’re also phenomenal at getting users to buy products on the web. Amazon was the first company to introduce and perfect the shopping cart and check out system that all e-commerce sites use today. With an intuitive checkout flow and quick order fulfillment, Amazon has optimized the formula to keep users coming back.
Alright, now that we’ve established where each of these companies excels, we can try to put the pieces together and make an argument for why these companies should merge. Please note that this analysis is a bit simplistic since it ignores financials, HR, operations, and all of that other good stuff. Given that, suspend your disbelief for just a bit longer.
Perhaps a story is the best way to hypothesize what would happen if these companies merged: a college student wants to take an extended vacation to Southern California. This student, Raj, goes to AUA (AirBNB + Uber + Amazon) and makes a month long reservation for a room. It costs about $1500/ month. He grabs an UberX from his parents’ place in North Jersey to Newark Liberty airport, catches his flight, and then takes yet another UberX from LAX to his rental.
On a weekly basis, Raj uses Amazon Fresh to order all of the groceries he needs. Uber Eats delivers his food within an hour of ordering. He simply needs to go to the front door to collect his stuff. Any time he wants to explore, he uses Amazon Local to find discounts for dinner, events, and even bike rentals. When he wants to explore outside of biking range, he simply calls an UberX.
AUA is a lifestyle company, in the sense that it facilitates many daily or weekly activities: groceries, transportation, housing, leisure, etc. With that level of efficiency, people could use AUA services every day, rather than sporadically. You could live in AirBNB housing pretty much permanently like a regular renter, use Uber to transport you anywhere, and go on Amazon to find the rest.
Of course, this wouldn’t work outside of cities, but it’s certainly interesting to think about. I’m really excited to see how the “Do It For Me” Economy grows and changes in the next few years. If this particular prediction ends up being right, I’d be floored; I simply don’t expect something like this to ever take place because there are so many moving parts involved with companies this massive. I hope this encourages you to think about what the sharing economy really is, and what the outcomes for AirBNB and Uber will look like.
