Can Airbnb learn from the mistakes of ebay?

In 2001 I saw a roadside billboard for eBay, an apparent ‘online auction’ website that claimed it was connecting sellers of junk with buyers of junk across the world.

Even with a firmly established career in ‘tech’, the sound of my loud scoff at the idea of this kind of concept succeeding echoed in our car for what seemed like an eternity. We sold that car eventually but the new owners probably still get it when they hit a pot hole.

But as a hoarder and collector of everything from coins to sea shells, I was still intrigued, and within a couple of years found myself trading with the best of them – sending stamps to Sweden, magazines to Mexico, and records to Romania. It wasn’t only a bit of extra cash on the side – it was fun – and over the years I slowly reduced my pile of personal rubble while saving enough to actually visit some of the exotic places I was exporting my trash to.

Over time however, eBay gradually eroded the essence of their online garage sale concept, the very elements that had made transacting enjoyable and even personable – I’m still connected to hundreds of like-minded collectors and fossickers across the world. Within a short period of time we saw; the loss of feedback for sellers, the hiding of auction winner identities, a never-ending toying with listing formats, an overhaul of item categories, promoted items in search results, the introduction of the compulsory use of PayPal, and the significant upping of listing and sale fees.

All these changes favoured the modern breed of eBay seller; ‘stores’ peddling new goods, mostly cheap rubbish, and operating e-retail businesses, resulting in a reduction of the grassroots swell of the now disillusioned low quantity and casual sellers. The old-timers either threw their hands in the air and gave up, or slowly backed away, their activity levels dropping to an all-time low.

So what’s all this got to do with Airbnb?

Well you might recall I mentioned I travel a bit? And I work in tech? Yes, I love Airbnb almost as much as I used to love eBay. The site has opened up accommodation opportunities to countries, regions and neighbourhoods that were previously unavailable, either because there were no official lodgings in the area, or the ones that did exist were exorbitantly priced and lacking quality, flexibility, and general homeliness.. When you add in the fact the Airbnb hosts are like your own personal in-country concierge, the benefits of being able to hand-pick the style, location and price of your accommodation are a winning combination.

In terms of the technology and operational structure of the two, the similarities are striking. Each was developed in a garage by a sole brainiac with a vision. They provide an online, secure forum for the owner of a product to offer it to a buyer of the product. Each party to the transaction has the chance to communicate/negotiate with, and get to know the other. Both services became wildly popular in a short period of time with the general population, but less so with the industry establishments, crashing old-school business traditions and catching complacent, under-resourced and bewildered governments napping. As a result each has run into its fair share of legal hassle and controversy.

I’ve used Airbnb since 2010, but in the last 2 years have noticed an increase in the number of hosts who are merely rental property managers, time-poor ‘just show me the money’ types, the equivalent of eBay ‘stores’, with little vested interest in the property, the neighbours and surrounds, or their client. Using Airbnb, once you’ve clicked the ‘book’ button, your payment for the  total accommodation cost is taken from your credit card and immediately goes into ‘escrow’ – held and controlled by Airbnb – even if your trip is months away. If you have a problem and need to change your travel plans, retrieving your money is difficult, and will depend on the booking conditions and attitude of the host. With rental property managers, the chances of being able to cancel or alter your booking are slim, and your money is as good as gone if you don’t arrive at your accommodation on check-in day.

All of my great experiences over the years have been with owner-hosts – I just love the meet and greet opportunity, personal stories, recommendations and occasionally even a coffee or glass of wine.

So what next for Airbnb – how can they avoid eBay’s pitfalls?

I would list my predicted “top 10 initiatives Airbnb might try and implement in order to sell out” if I weren’t afraid the company might read them and decide some of them were great ideas. Suffice to say they all involve some degree of either focussing on business owners over individuals, further depersonalisation, fee increases, market over saturation, and just general greed. All of these will inevitably contribute to the recent crackdown on Airbnb lettings by tenant associations, body corporates and governments.

Airbnb’s contribution to the decline of housing affordability and the ethics of its operations deserve expanded discussion in a separate article, in the meantime it seems to me that the service can stay on the right side of the moral argument by sticking to the fundamentals; putting people before profit, partnering with small-time hosts around the world, and just maintaining the element of fun.