In case you haven’t heard, the notion of the ‘sharing economy’ has graduated from fad status to become a common catchphrase associated with many emerging business models in the United States. Airbnb is one example of a growing business squarely within the sharing economy – which appears to be working a win-win for both consumers and sellers.
In this article, we’ll touch on how the sharing economy may affect your business, for better or worse, and how you can adapt your own business model to stay relevant within your market.
Wait, what is Airbnb?
According to their website, Airbnb is a community marketplace where guests can book space in host homes, connecting people who have space to spare with those who are looking for a place to stay. In other words, if your spare bedroom is collecting dust, Airbnb provides a web-based platform you can use to offer your unused asset for rent to short-term renters.
Do people really do that?
The idea of inviting complete strangers into your home and treating them as guests does not appeal to everyone, nor does the idea of sleeping in someone’s home you’ve never met. Airbnb helps overcome this general apprehensiveness by handling the financial end of the deal and by publishing the guest’s and host’s reviews of each other after the rental period is completed. Giving guests and hosts the opportunity to critique the other helps build confidence within the Airbnb community.
The obvious benefits are that a guest can find a place to stay in a city that may otherwise be booked up – or may not have suitable accommodations at all – while the host makes a little extra income.
What else is the sharing economy doing?
The whole idea of the sharing economy can be described as collaborative consumption – owners of property rent out something they are not using. There are a host of companies collaborating with consumers, in addition to Airbnb, whose niches include renting out cars, bicycles, even high-end household goods such as kitchenware and lawn care items.
So How Will This Trend Affect My Business?
A talent shared by all successful business people is the ability to spot emerging trends and adapt accordingly. This does not mean, however, that your business needs to immediately jump on board the sharing train and start renting out the goods you normally sell. It does mean you should look for ways to stay competitive, even if it means looking for ways to participate in this marketplace.
Maybe keeping an array of goods for rent is a good way for your business to compete, while also offering similar items for sale. If your renters have a positive experience with your business, odds are good they will return to you when they are ready to buy.
Competition is a good thing, but unfair competition is not
Although you should try to evolve and adapt your business, each compromise has its limits. In the case of Airbnb, it didn’t take long for the hotel industry to notice that Airbnb was competing for the same guests, but was not bound by the same regulations and tax obligations as hotels – essentially meaning that Airbnb’s renters could charge far less for a room than hotels could.
The hotel industry responded in many cities by pushing for laws to impose restrictions on renter, to require renters to pay lodging taxes, or both. Whether you agree with this approach or not, it has helped level the playing field in some areas of the lodging market.
Let an experienced business litigation attorney review your situation
When unfair competition threatens your business’s legal and economic landscape, consult with a professional to protect your rights. Our Bryan-College Station, Texas business law attorneys guide new and established entrepreneurs through legal matters with confidence and skill. Make sure you have an attorney on your side who is prepared to protect your business interests. Call us at Peterson Law Group to make an appointment at 979-703-7014 or fill out our online contact form.