Airbnb: Making Your Home Work For You

Chetan Reddy

airbnb_0Have an extra couch sitting in a spare room in your house? Thinking of throwing it out? DON’T! It could earn you some unexpected newfound money.

Founded in August of 2008 and based in San Francisco, Airbnb harbors a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet. Basically what this means is that Airbnb is flipping the hotel business on its head.

Airbnb specializes in short-term stays — less than a lease, and similar to hotels. Users can get access to real homes with full furnishings, an attractive offer compared to bland hotel rooms.

For example, instead of paying $2000 a month to rent a house for a month, an Airbnb user can find a couch to sleep on for $50 a night. Users can get a place to crash and leave the next morning (no need to pay for a hotel room/pool/and three-dumbbell gym that’s there only for marketing purposes). One host even rented out his Tesla as a place to sleep for the night, rigging it with a television and providing access only to the bathroom in his house.

It is not that easy, however, to be a host. Renting out one’s home for Airbnb occupants has become a job for some, with people even buying homes specifically to be put on the Airbnb market. Hosts can be responsible for cleaning the place every night to sanitize it for the next occupant, doing laundry, and keeping the kitchen stocked (all of which cost more than simply providing a couch). Others have quit their day jobs to become full-time hosts, which brings questions about the merits of the sharing economy into play.

Is the sharing economy changing the way we think about jobs? The 9 to 5 is in jeopardy. With Airbnb, hosts are taking risks by quitting their cushy 9 to 5 office jobs for a risky foray into the world of accommodations.

The Center for American Progress released a 2015 report on this issue, in which it is stated, “Technology has allowed a sharing economy to develop in the United States; many of these jobs offer flexibility to workers… At the same time, when these jobs are the only source of income for workers and they provide no benefits, that leaves workers or the state to pay these costs.”

There is a direct trade-off between having the flexibility of choosing what you want to do and the perils of not having the safety net of an established employer. The sharing economy may be taking away opportunities from the workforce rather than adding them.

Juliet Schor of the Great Transition Initiative counters, “While the for-profit companies may be ‘acting badly,’ these new technologies of peer-to-peer economic activity are potentially powerful tools for building a social movement centered on genuine practices of sharing and cooperation in the production and consumption of goods and services.”

Juliet sees the positive side of this economy as one in which people behave ethically, and have genuine relationships with each other without trying to undercut each other. Instead of a company trying to generate a profit, it is your personal brand that is on the line. If you don’t act faithfully, you will hurt only your own reputation; there is no large company name to fall back on.

If you’re ready to take the sharing economy plunge, that old sofa you were about to throw out may come in handy…and maybe your Tesla, too!

For more thoughts on business in today’s evolving business environment, see 5 Ways to Strike It Rich in the Sharing Economy.

About Chetan Reddy

Chetan Reddy is a Duke sophomore studying Economics. He was a corporate marketing strategy intern during the Summer 2015.