Uber, Lyft, and AirBnB, and HomeAway
By Jim Epperson, Executive Director

Disruption. It’s a word that’s being bandied about in business today. The internet is a disruptor for brick and mortar stores. Social media is a disruptor for review sites. And now, the sharing economy. Is it a competitor’s calculated disruptor or a customer driven evolution? This month we take a closer look.

Uber, Lyft, AirBnB, and HomeAway are examples of technology solutions that claim to be different than the businesses with which they’re competing. Thus, they claim not to be subject to the same rules and regulations of established industries. Uber and Lyft don’t own and operate the cars that go up against traditional taxi companies. They provide a platform that they say matches available private cars willing to share a ride with riders looking for a different option than the traditional taxi. Drivers and riders are matched online, and the rider pays a fee through the technology platform. Of course, Uber and Lyft take a cut of that fee before it ends up in the driver’s account.

Similarly, AirBnB is a listing service for traditional Bed & Breakfast inns as well as homeowner who wants to rent out a spare bedroom or even a whole house (think Kentucky Derby corporate hospitality rentals). HomeAway is a whole-house/apartment rental option travelers turn to when visiting world cities for business or pleasure.

Regardless of product or platform, one thing is clear. Traditional lodging and transportation businesses are crying foul.

Hotel and taxi services are subject to numerous regulations — from airport fees to zoning, and everything in between including taxation and queuing rules. By claiming they are not hotels or taxis, the “sharing economy” companies often skirt past the licenses, fees and regulations to which traditional businesses must adhere.

Local and state governments are left scrambling to keep up with this rapidly changing environment. They are looking at ways to either refine existing statutes to keep the playing field level or are passing new laws to address the myriad concerns these new business models raise. Lost revenue is a motivator for government, but public safety is a part of the discussion as well.

Should the visitor industry sit back and wait for lawmakers and regulators to protect our traditional way of doing business? Should we look for lessons to be learned from the new competitors? In some cities, customer response to Uber, Lyft and AirBnB has resulted in these businesses’ meteoric growth.

Maybe we need to ask ourselves these questions:

  • Why are people shunning traditional taxis in favor of Uber and Lyft?
  • Is it only the technology platform that people prefer over calling a taxi company or does the taxi experience need to be upgraded?
  • Why do some prefer renting a bedroom in someone’s house vs. staying in a traditional hotel?
  • Is it just about price or does the desire for a personal connection trump impersonal, anonymous service?
  • How can our hotels and B&B inns offer improved experiences to provide the perceived intangibles that people get from an overnight in a private home?

What disruptors are on the horizon for restaurants, attractions, tour companies, festivals and other visitor experiences?

We want to have such discussions with you because it is likely we can do things at the destination level to help our hospitality businesses compete and to create a better environment for new businesses to flourish.

What’s your disruptor?  And are you ready for it?