The Sharing Economy: Uber and AirBnB

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The sharing economy: Uber and AirBnB

Uber and Airbnb are two of the new ‘person-to-person’ businesses. They use the internet to match people who want a service with someone who can give that service. It seems informal, more like a ‘social movement’ than a business. Uber connects you with a person with a car in your area now – instead of a professional taxi service. Airbnb lets you stay in someone’s home – instead of a hotel.

But it’s not all good. The owners of Uber and Airbnb are now billionaires; the people who provide the services don't earn much. It’s not really sharing.

The market value of Uber is now $69.5 billion. The National Public Investment Fund of Saudi Arabia recently invested $3.5 billion in Uber. And Travis Kalanick (Uber CEO) said that they look forward to working with Saudi Arabia to support their economic and social reforms.


Uber does not follow local laws strictly. It says it is a ‘platform’ to connect drivers with passengers, but the regulations are not clear so it does not have to be responsible. It can change prices when there is more or less demand. In 2015 there were more than 50 lawsuits against Uber in the US and many countries (Belgium, Germany, Canada, Australia, New Zealand / Aotearoa and Brazil) have said it broke rules. Spain, Thailand and France have banned Uber – they say it is ‘illegal’ and ‘dangerous’.

Airbnb grew mainly by people telling others about how the company has helped people who do not have much money but have a spare room. In 2011 it had 50,000 beds; by mid-2015 it had 1.2 million (more beds than the world’s largest hotel company). Its value is $24 billion.


Airbnb makes small, regulated, tax-paying guest houses go out of business, not big, rich hotels. It says that many of its hosts are ‘artistic’ – and not rich. But we know from research that a lot of the rentals are complete houses. And more Airbnb hosts are now rich people who rent with more than one property.

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