I think I know why New York Times columnist Thomas Friedman likes Airbnb. The house-rental start-up has lots going for it: a $10 billion valuation, a huge global user base, and a slick user experience. But more important for someone like Friedman, whose job is to explain the Way We Live Now, it feels like the kind of company whose rise says something more profound about the human condition. In the introductory paragraph of his latest column, he writes that Airbnb is “a company that is burying the past with the future, and actually bringing strangers together.”
It’s true that Airbnb is a great dot-com success story. But in repeating the company’s quasi-communitarian social mythology, Friedman ignores a much more compelling, and much simpler, economic explanation.
In Friedman’s eyes, Airbnb isn’t just a for-profit company, helping travelers find lodging in strangers’ spare bedrooms and taking a skim of each transaction. No, it’s a movement. Parroting language from Airbnb co-founder Brian Chesky, Friedman writes:
Airbnb understood that the world was becoming hyperconnected — meaning the technology was there to connect any renter to any tourist or businessperson anywhere on the planet. And if someone created the trust platform to bring them together, huge value could be created for both parties. That was Airbnb’s real innovation — a platform of ‘trust’ — where everyone could not only see everyone else’s identity but also rate them as good, bad or indifferent hosts or guests.
Friedman is on familiar turf here. Earlier this year, Wired proclaimed that the Age of Trust is here, as evidenced by the rise of so-called “sharing economy” start-ups like Airbnb, Lyft, and Uber. But what that argument missed, and what Friedman’s column similarly ignores, is that there’s a simpler explanation for the rise of these companies: namely, they provide essential services at below-market cost, and give people with idle assets a way to squeeze more value out of them. A “platform of trust” may make transacting easier, but it’s not why people sign up for Airbnb — it’s simply a good way to find a cheap place to stay, and a good way to earn extra money by renting out your free space.
Friedman isn’t so cynical. He believes in the warm-fuzziness of Airbnb’s marketing pitch. He thinks that Airbnb is popular because it cultivates trust between participants, thereby making the world a friendlier place.”Take trusted identities and relevant reputations and put them together with the Internet,” he writes, “and suddenly you have 120,000 people staying in Brazilians’ homes instead of hotels at the World Cup.” (Or it could have been that the alternative was $800-a-night hotel rooms. Who’s to say?)
In fact, trust seems to be one of the least important elements of the sharing economy. A recent survey by Havas Worldwide found that when asked which aspect of the “sharing economy” appealed most to them, many more respondents picked “saving money” (32 percent) than picked “having an interesting experience” (8 percent) or “meeting new people” (6 percent). When asked which of their belongings they’d be willing to rent out to strangers, many more people said they’d agree to rent their tools (42 percent) and bicycles (37 percent) than their cars or homes (both 15 percent) — an indicator that when it comes to the possessions we care most deeply about, we’re not very trusting at all.
Like Kate Losse, I’m perplexed by Airbnb’s insistence that we treat it as a collectivist social experiment, rather than simply calling it what it is: an innovative start-up that allows people to find a place to stay for less than the price of a hotel, and gives homeowners a way to earn some extra money in exchange for the use of their space. Perhaps Airbnb thinks that regulators will look more kindly upon a grassroots movement than a for-profit corporation. And perhaps having a CEO who says things like “I think we’re going to move back to a place where the world is a village again” allows Airbnb hosts to feel somewhat more virtuous for renting out their spare rooms to strangers — a spoonful of humanitarianism to make the forfeiture of privacy go down easier.
But where Friedman errs is in swallowing Airbnb’s explanation for its own success unquestioningly. Renting your house out on Airbnb, or your car out on Lyft, isn’t something to which people are naturally inclined, or something that becomes attractive with the assistance of a “platform of trust.” It’s the digital equivalent of heading to the pawn shop — a way for the short-term needy to make (or save) an extra few bucks.
My skepticism about Airbnb’s marketing pitch doesn’t mean I think it’s a bad company. In fact, I think it’s great. But, unlike Friedman, I’m not convinced that the company’s success is owed to anything more than the laws of economics.
I could be swayed, I suppose, if people who didn’t need extra money — like, say, Thomas Friedman — decided to rent out their guest rooms just for the thrill of meeting and trusting in strangers. So far, though, I haven’t heard many of these stories. For now, the sharing economy village seems to be populated mainly by bargain-seekers, rather than community-building trust junkies.