The Cuban Sharing Economy Could Be Huge

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HAVANA, CUBA - FEBRUARY 23: A pedicycle drives through the streets of Old Havana on February 23, 2015 in Havana, Cuba.  The recent thaw in U.S.-Cuba relations has increased the number of American visitors to the island.  (Photo by Joe Raedle/Getty Images)
A pedicycle drives through the streets of Old Havana on February 23, 2015 in Havana, Cuba. Photo: Joe Raedle/Getty Images

Future vacations to Havana, whether to gawk at classic American cars or follow the Hemingway trail, will have at least one familiar element — Airbnb has arrived in the Cuban capital. Starting today, hundreds of rooms are available on the site, some renting for as little as $15 a night.

Cuba was one of the few countries in the world where Airbnb didn't already have a presence, and with today’s launch, the San Francisco–based company is among the first wave of American businesses, along with Netflix and Apple, to take advantage of loosened trade restrictions. As The Wall Street Journal points out, Airbnb’s model has allowed it to move more quickly than legacy hospitality brands that “have to buy or rent physical property and employ full-time staff in the country.” Its rapid deployment in Cuba was helped along by a well-established network of room renters in Havana, who typically cater to Canadian and European tourists.

These rooms are quite simple and quite cheap, according to Frommers, and most of them are rented out to travellers flying down from our northern neighbor, which sends the overwhelming majority of tourists to Cuba — budget-conscious travelers looking for a bit of "adventure." The austere accommodations are a part of that.

A glance through Havana’s early offerings confirms the Spartan reputation of  Havana’s casas particulares, though luxury options do exist. The most expensive, at $1,000 a night, is this home in what the listing describes as an area of Havana “preferred by wealthy families, the upper classes, political personalities, and celebrities.” But before you book, remember that travel restrictions to the island, while less restrictive than they once were, still prohibit flying down just to lay on the beach.

When those restrictions inevitably lift, Airbnb will be in a strong position to siphon off some of the cash that will begin flowing into the country— 3 percent from hosts on each transaction, and as much 12 percent from travelers. (This is the company's policy everywhere.) But there’s a major hurdle that might hamper Airbnb’s growth and keep the other stalwarts of the sharing economy from reaching Cuba — the island's limited internet access. Only about 5 percent of its residents have internet, and even those who do enjoy download speeds on par with Y2K-era AOL. Most Cubans access the internet from work, school, or government run centers where an hour online costs an exorbitant $5. Cell phone penetration is dismal, too, with fewer than 20 percent of the island’s 11 million residents owning one.

Some breakthroughs might be coming, though. Earlier this week U.S. State Department officials said Cuba is aiming to have half of its population online by 2020 and 60 percent owning cell phones. Lifting the trade embargo will help further that goal now that the Treasury Department has made it easier for companies to sell devices in Cuba. Google seems particularly eager to cash in on the new market. The company has sent executives to the island twice in the last year, including earlier this month. Last June, after Google CEO Eric Schmidt visited, he blogged about his trip and criticized the trade embargo, writing, “If you wish the country to modernize the best way to do this is to empower the citizens with smart phones.”

Despite few phones and dismal internet access, Cubans remain clever in their attempts to access and utilize technology. The country has a thriving “sneakernet,” in which information-hungry Cubans use their shoes, not wires, to pass around physical hard drives full of TV, movies, magazines, and software. There are outside efforts, too, to help Cuban businesses amp up: In November, a Miami-based nonprofit launched StartUp Cuba, which is offering mentoring and training to a select few entrepreneurs. And already a homegrown Uber-like company called YoTeLlevo has launched on the island. (When a fare is available, it sends potential drivers an email.) It actually makes sense that Cubans would jump on this idea — what better place for a "sharing economy" than a communist country that's slowly embracing a more capitalist way of doing business?