Shared-Space Providers (Airbnb) Poised to Beat Ride-Sharers (Uber)

April 28, 2016
By: Steve Anderson

Travel may be starting to make a bit of a comeback, as a new report from Juniper Research (News - Alert) suggests that shared-space providers like Airbnb and WeWork are on the rise, sufficiently so to beat the revenues brought in by ride-sharers like Lyft and Uber by 2019. The new Juniper report—”Sharing Economy: Opportunities, Impacts and Disruptors 2016 – 2020”—offers insight on where these markets are headed in the short term.

The main value proposition from Airbnb and its ilk is that it can offer space often for less than the cost of a full hotel room. This gives users a whole new edge when it comes to travel opportunities, and it's posing a major new disruption to the market. Sufficient disruption, in fact, that revenues are set to reach $6.1 billion by 2019, up from around $2.3 billion in 2015. Reports point to the ease of use and financial rewards—property owners actually get a major boost here, as they're the ones mostly paid for the rooms with a bit of cash going to Airbnb—that's driving services like Airbnb and posing a real problem for the hotel industry. Facing a largely deregulated field that can sorely undercut on price, hotels will have to scramble to find either new value propositions to persuade users to come in over getting a room in a shared-space setting, or ways to cut expenses sufficiently to almost match prices.

Naturally, services like Uber won't be folding up in light of this; expansion efforts are on the table already, though in some places, meeting with resistance. Uber is having a particular problem in China, where Didi Kuaidi, a taxi-hailing firm, is currently controlling much of the market. Uber has already spent better than $1 billion, at last report, trying to crack the Chinese market, and that's not its only expansion plan. It's targeting India and Thailand as well, pushing to edge out the motorbike taxi market.

In the end, what this suggests is that people are looking more for a place to stay than a ride to get there. With air travel likely still the major front-runner for long-distance trips—the thought of sharing an Uber ride across state lines likely leaves some with cold chills—it's going to be more of a priority to find a place to stay. Throw in no shortage of people willing to make a bit of extra cash by doing nothing more than having people stay in their houses and Airbnb's edge is clear.

That's not to say there won't be plenty of call for Uber services, but that Airbnb et al are likely to outpace Uber and its ilk for some time to come. With a clearly interested market on hand and a comparatively competitive value proposition, it's not a surprise that shared spaces will be outpacing shared rides in the field for the next few years.