The Misnomer Called the Sharing Economy

I’m not sure who came up with the term “Sharing Economy” , but I have found it to be more of a misnomer than an accurate description of many microentrepreneurial businesses.  As well, in the minefield that is the landscape of modern day short term rental politics in many cities, it is a term that is actually often used against short term rental hosts.

As defined on Wikipedia , the term Sharing Economy is clearly linked with “peer to peer economy”, which would have been a better word to use.  In this Wikipedia article, it’s stated that this economy,

 ” refers to peer-to-peer-based sharing of access to goods and services (coordinated through community-based online services).  “

The term that is problematic here, and which I think boomerangs against us, is “sharing.”  I think most of us have realized that when we have riders in our car, or guests in a room in our house, we are not “sharing”, we are “renting” or “selling.”  The term “sharing economy” has confused not only our riders and guests, on Lyft/Uber and Airbnb,   but also our local governments, and those neighbors or community members observing our “sharing” businesses  — some of them quite clearly experiencing contempt for us, that we should make any income at all,

k33q1i

If we were caring, we would be sharing!

 

since in their view, we should be “sharing.”  !!  Indeed, it’s the view of many, that if we were really decent people, and if we really sincerely wanted to just meet a lot of different people from around the world like we say we do, then we wouldn’t be charging money for folks to stay at our house.  We would let them in for free.  Isn’t that what sharing is all about?  So these people, dismissive of  our need to actually generate income for our work, say that if we were really caring, we should be sharing!

Airbnb should be all Puppy dogs and ice cream!

There are other consquences of this unfortunate misnomer, which is that the hosting business is perversely seen,( not only by many who oppose it but also by many hosts!), as just about the only kind of business in the world, where the less money you make from your business,  the more virtuous you are. Really, name me one other type of business where the prevailing attitude is that you shouldn’t be earning much money at it!

If we had simply termed our business, “peer to peer economy”, rather than “home sharing”, we might not get those strident individuals who stand up at City Council meetings and insist that people who rent out a room in their house shouldn’t be allowed to do so all year long, but should be limited to a certain number of nights per year, like, say, 60 nights a year. “After all, dont’ they say they are ‘sharing’?” I heard one bitter woman argue in a local City government meeting.   No,  I didn’t say I was sharing, Ma’am!

City government leaders and community members alike often have the perspective, that there is something slightly gross or just wrong, about a person who rents out a room in their home on a full time basis.  Notwithstanding the fact that people have rented out rooms in their home for decades — for centuries even, including to those staying on a short term basis.  To hear the view of many civic leaders, it’s fine to run such a business part time or occasionally, but certainly not full time, because, by gosh, “then they would be running a business!!”  As if renting out a room for any amount of time wasn’t running a business?

15d5mvr

If you’re not a cute little sharing critter then I just dont’ know about you

 

This view about the virtue of not making very much money at your business, also affects the Airbnb host community itself.  Of course there are those super-coach type hosts, the shiny motivational speaker types, who write the Get Rich Quick guides like ,  “Turn that dark, dingy unused hallway closet into a guest room and make a million dollars this year!” — so of course there is that segment of hosts who believe in making money, and lots of it, even if their idea of how much you can make is somewhat exaggerated.

But there are also a good number of hosts, often those who signed up in the early days of Airbnb when it was less glitzy and ritzy and more clearly focused on room rentals, who think there is something shameful about those hosts with — gasp — “multiple listings.”   As if having more than one room in your home that you rent, or more than one apartment that you rent, made a person into some type of demon.  It’s true that in some places in the world, hosts aren’t allowed to do short term rentals of entire apartments that they dont’ themselves live in.  Notably, New York, San Francisco, and a few other cities where housing is tight.  But politics are not the same everywhere, and in places like Bali or Singapore, Russia or Namibia, I doubt that there are the same regulations as in New York City.  So, one can’t make broad generalizations about those listing multiple apartments.

I’ve read laments on the host groups, where hosts decry the direction that Airbnb is going, now that people are using it to list entire apartments, when apparently they “should” be listing only a room in their own home.  Others self-righteously lecture other hosts (see for instance one such lecture in this post ) who have many listings, insisting that they “have contravened the spirit of Airbnb” and “Airbnb was not set up for people like you.”  In fact there are no statements one can find anywhere on the Airbnb site that state that one cannot list several different properties, or that Airbnb was “not set up for” people who happen to own or manage such properties and want to use this website to rent them out.  It’s true that in early days the “atmosphere” or culture of Airbnb was palpably felt as a place for those renting out rooms, opening up their homes to guests, and much of the language in the Airbnb ads and website promote that culture.  But this culture is not policy, and not mandated for hosts, and I think it’s presumptuous for hosts to insist that  Airbnb is more than a short term rental listing service, which struggles to wade the treacherous waters of regional regulations which often either  outdated, or evolving in response to political pressures.

The sharing-economy term having led to the concept that we are really all supposed to be “sharing” I think in this way influences hosts who offer rooms in their home, or “just one separate unit, but it’s on my own property”, to look askance at those whose offerings are not as homey, and spite them as being not as altruistic — they aren’t really hosting, as some would have it, they are just “doing a business” or “listing many properties.” Well what the heck is wrong with that?  People who own or manage many properties naturally are going to rent them, right? What else are they going to do with them, put them in frozen storage?

viisxu1

And please mind your own business while you’re at it…

 

So I am suggesting that one of the consequences and end results of the term “sharing economy”, has been that we have this insidious moralizing and judgementalism infiltrating this business of doing short term rentals.  The moralizing stems in part from the use of “sharing economy”, but also stems from the fact that this business (which is really a very OLD business) is new to the present time, and those engaging in this business often feel put upon to defend it to the critics, particularly critics in local government.  So there are many efforts afoot to show that we as hosts are doing something virtuous, doing something generous, doing something hospitable…not just making money! God forbid we should be making money when we rent out our property, that many of us have obtained not only thru investing our life savings, but blood sweat and tears to boot.

So my point in this blog, is to take note of the moralizing that surrounds our business, the inappropriate expectations that we should be sharing, rather than making an income, and the various kinds of judgmentalism which arise from the host community itself, regarding other hosts.  Particularly in an environment where hosts are seeing an oversaturation of hosts in almost all areas, and growing competition, I think we need to recognize that part of this moralizing is self-serving: we’d like to eliminate much of the competition so that we could get more business ourselves, and one of the ways that people naturally seem to do that is by judging other hosts and self-righteously deciding who should and who shouldn’t really be an Airbnb host.

Yes, it’s true that some hosts are violating local laws with the listings they are offering — but as far as that goes, people by the millions have violated federal laws when they ran across a national border at night, when no one was looking.

rtj6lx

Sir: Are your listings illegal or are they just undocumented ?

 

Many of us heavily criticize the former but look kindly and compassionately at the latter group of law-breakers.   Apple Corporation right now is violating federal law and defying court orders by refusing to hack into an iphone for the FBI.  Yet I think you and I and most of us who aren’t Donald Trump or the other Three Stooges running for Republican nominee for president, would applaud the “scofflaw” attitude of Apple, because it is so important a position for our collective rights to privacy. Not all laws are created equal and  particularly when you have cities that haven’t developed short term rental laws that suit the modern times, not all laws are up to date and fair.  So I suggest that we hold back on our impulse to judge others, and temper our stridency or any obsessive qualities of our love of the letter of the law, and focus on how we as short term rental hosts can work collectively to promote our collective interests.

 

 

Advertisements

The SUPERHOSTAGE versus the NEWBIES

Ah, the Superhost.

Airbnb calls its Superhosts “extraordinary” and “outstanding.” Travel websites refer to Superhost status as a badge of honor, as the crown jewel of Airbnb. Yet, as many hosts know, the Superhost badge doesn’t actually mean much. That’s partly because it’s just too easy for new hosts to get.

Why should I worry so much about keeping my Superhost status when so many new hosts can get that badge in their sleep?

I call myself an Airbnb Superhostage. I’ve hosted successfully since June of 2013, and I’ve held Superhost status since the company re-instated the program beginning in September of 2014. As a Superhostage, I’ve been proud, indignant, confused, desperate, silly, and boastful. Whenever my next “evaluation” approaches, I check my Airbnb Inbox every five minutes, I pore over my Superhost statistics, and I overreact. For example, I was puzzled by the recent “Overall” ratings for my studio:

Great work! Your last 2 ratings were each 5 stars! 

Only the last 2 ratings?? Strange. Great work?? I think not…I have 144 reviews for that listing. Some recent guest has given me just 4 stars for “Overall Experience.” Who were these guests, and what had I done wrong with them? However, that kind of thinking wastes my energy.  I’ve never polled my guests, but I’ve heard other hosts say that their guests don’t even realize the Superhost program exists.

Yet, the Superhost advantages remain. We come up higher in search results. Guests can filter their searches to show only Superhost listings (I suspect that filter isn’t used much, but it’s there.) AND, the greatest advantage, in my view, is that, as a Superhost, you can call Airbnb Customer Service and be connected almost immediately with a staffer. This is huge. I remember painfully long wait times, before the program was re-introduced. Yes, Airbnb Customer Service has flaws, but I can usually get help with basic questions on specific reservations. 

To gain Superhost status, a host needs to maintain at least an 80% average on overall ratings and a 90% or better response rate. You must have no cancellations. AND – you must have hosted ten “completed trips” in the past year.  ONLY TENI see a problem with that. After ten sets of guests, you’re still a newbie, and you don’t have a proven track record.

I don’t want to diminish the efforts of those great new hosts who have put in the time, research, and money to develop a beautiful space and a well-written listing. Yet there are SO MANY “Superhosts” who have only a handful of reviews, or have only been on Airbnb for a few months. With such limited experience, how competent can a host be? Have these hosts gotten lucky with easy-to-please guests?  Perhaps. But, for most, I think their Superhost status will disappear at the next evaluation.

The majority of newbie Superhosts need to pay their dues. It’s evident in their listings.

I examined 30 Superhost listings with twenty or fewer reviews, mostly in my home town of Los Angeles, but also from other major American markets. 24 of the 30 listings – that’s 80% — had serious problems in their descriptions, photos, and House Rules. Surely some prospective guests would worry: Is this host flaky? Will s/he clarify these unclear statements? The reviews look good, but can I trust them? And, does that Superhost badge really mean that I’m staying at a decent, clean, well-appointed place?

These new Superhosts themselves will likely face problems down the line, if their information is unclear or the House Rules inadequate.

So what’s wrong with the listings I’ve looked at? First, so many are poorly written! These days, we shouldn’t be surprised at the lack of good English writing. In the listings, I found so many grammar errors that I lost count. I saw complete lack of punctuation, weirdly placed capital letters, and clumsy, confusing phrases. Some excerpts:

Under “About This Listing,” one Superhost only wrote:

      “its 2 min walking from Hollywood blvd bunk bed 1      level”

That’s it. A prospective guest might wonder what else is unclear at this place, such as the WiFi password or parking instructions. 

Generally, this Superhost has good reviews, but there is one which reads:

     “did not like at all”

Okay then!

Another Superhost repeated an entire paragraph fully three times, at different points in her listing:

“Beautiful large private bedroom/private bathroom in a 2bd/2        bath apartment… [Etc.]”

“Beautiful large private bedroom/private bathroom in a 2bd/2  bath apartment… [Etc.]”

“Beautiful large private bedroom/private bathroom in a 2bd/2  bath apartment… [Etc.]”

Wouldn’t a guest question that host’s attention to detail?

Here’s what another Newbie Superhost wrote, in describing his neighborhood:

” “Culture” (URL HIDDEN), (URL HIDDEN), “Nightlife” (URL    HIDDEN), “Guide to Bars”   (URL HIDDEN), “Shop” (URL    HIDDEN)….”

Note to Newbies: Airbnb blocks out links. READ YOUR LISTING AFTER YOU POST IT.

What about “House Rules?” Here’s an entry:

      “Be kind to the house.”

That’s ALL.

Most people will understand that they’re expected to take care of the property, but what about the guest who takes it to mean “Paint rainbows on the walls!?” I hope this Superhost rewrites his House Rules before some guest destroys the place.

Another host has “House Rules” almost as brief:

        “I don’t like rules…just be respectful.

         smoking outside only…”

That host really sets himself up for problems.

Here’s a House Rule from a Superhost whose landlord just might not be in the loop:

 “Do not talk to neighbors”

What happens if a guest does break that house rule? How would the host know?

Some of my Newbie Superhosts have pretty good photos, but others have shots that are blurry or even sideways. It’s hard for a guest to know what they’re in for. And, among these Superhost photos, I saw some really dirty floors and cluttered rooms. Outstanding??  Jewels in the crown?? I think not.

Shouldn’t the Superhost title mean something?

No. For all that Airbnb gushes with pride about Superhosts, the company does not endorse them. Airbnb claims to personalize encounters for travelers, but Superhost status is automated. A host meets certain measurable, mathematically calculated criteria, and the Superhost badge automatically appears on his or her profile photo. Or, a host meets the criteria, and the Superhost badge shows up three weeks later. Either way, no one from Airbnb is looking at actual reviews, listings, or photos. No Airbnb staffer will see that Superhost with the four-word review: “didn’t like at all.” Nor will any Airbnb employee notice the Superhost with three listings, active only since August of 2015, who has only three stars for cleanliness on one of those listings.

I find it ridiculous that Airbnb hands out Superhost status but doesn’t endorse the Superhosts. I mean, THEY PLACE A BADGE ON YOUR PHOTO. How is that NOT an endorsement?

If Airbnb doesn’t have the manpower to confirm whether these Newbie Superhosts really deserve that badge, the company needs to alter the criteria. At minimum, hosts should have to go through twenty sets of guests, not just ten, to qualify for Superhost status.

Think of the hard-working veteran hosts who have hundreds of positive reviews but may fall just short of that Superhost mark. Not only have they earned lots of money for Airbnb, they have also stuck with the company through its years of sudden growth, bad press, and failed ad campaigns.

Those veterans get to stay on hold for forty minutes while Airbnb Customer Service helps Newbie Superhosts.

Lots of improvements could help the Airbnb Superhost program. Certainly Airbnb should increase its minimum completed trips criterion. Airbnb will better serve its guests AND show more respect to its talented veteran hosts.

Should I call Airbnb Customer Service with my idea? Maybe. It probably won’t do any good, but at least I’ll get through right away.

 

c. 2016 by author

 

The Costs of Success

Here’s how the story goes….

I am not getting as many bookings as I had this time last year…I’m getting a lot of views but no bookings…I have had to drop my prices to get bookings….I’ve noticed there are a lot of new hosts in my area…what to do?

Indeed, what to do.  I first noticed this problem being mentioned about a year ago, among hosts in London.  Later, I read about it happening in Seoul, South Korea.  Hosts were finding that they were getting fewer and fewer bookings, at the same time that they noticed the number of hosts in their area or their city, rapidly increasing.  The number of hosts in many cities has doubled in the last couple years.  For instance, within 1.5 years, the number of listings in London has increased by about 300%, and is now around 29,000.  And Airbnb has been eagerly trying to sign up new hosts — lately I can’t write a review for a guest without getting a popup box on the screen when I’m done, telling me I will get a bonus if I sign up one of my friends sign up as a host.  At the Airbnb Open in November 2015, in Paris, Brian Chesky spoke excitedly of how in the future there will be an Airbnb listing on every block in every city.

2ih54y0

Airbnb Hosts — Too Many Everyhwere?

 

But wait — don’t you see — Brian — there are already 3 Airbnb hosts on my block.  And there are 2 on the block around the corner….Brian, wait…don’t you think…it’s possible to have too many hosts?  Brian, wait a minute….Briiiiannnn!

Yes, it is true that Airbnb is signing up more guests as well as more hosts.  Most of the guests who stay with me are first time Airbnb users, for instance. So there are new guests all the time.  But for each new host who signs up, you’ll need multiple new guests.  For instance, say you have a host who rents out a room that is booked half the time, or 180 days a year, and who depends on that income to pay their mortgage.   A typical guest probably only stays in an Airbnb listing 3 to 10 days a year, lets’ say 7 days on average.  So for each new host who needs 180 days a year to be booked,  there would be a need for 180/7 = 25 new guests.

So if the number of hosts doubles over a given period of time, has the number of people using Airbnb as guests , increased by 25 times?

A whole slew of people, eager for the easy cash they expected, signed up as hosts and listed their places on Airbnb for the Superbowl in the SF Bay Area.  The result demonstrated clearly that when too many people are hosting because their eyes are lit up by dollar signs, this will ensure less income for all:  Many Superbowl Listings are Sitting Empty.    As this article states,

There are simply too many rooms and not enough guests. “You get a flood of people listing their places and nobody looks at it,” says Ian McHenry, a co-founder of research firm Beyond Pricing, which sells rental hosts a service to help calculate how much they should charge. “There’s way too much supply in the market.” Of the nearly 10,000 currently active Airbnb listings in the Bay Area this weekend, around 60 percent are still available, according to the San Jose Mercury News.

When I first started as an Airbnb host 3 years ago, I saw a lot of hosts bragging about how much money they were making, and I also saw some hosts start to write books about how to make a bundle on Airbnb.  I read articles in which property owners said others were suckers for not using their properties to do short term rentals, since they would make so much more money.  I could easily see where this was going.  Which is where we are getting to now.

2dkg45z
Residences — now all ATM Machines?

People were going gaga over the prospect of making huge amounts of money — so much so, that an increasing number of folks who had space, somewhere, anywhere, were looking to cash in on it by stuffing guests into it.

Though property rental has generally been a business for those who own property, one could see that the lure of easy cash was blurring the understanding of rental agreements.   A perusal of listings available in major cities on the US Coasts will reveal a rather large number of offerings by twenty-somethings.  When one considers that people in this age range typically do not yet own property, and landlords who own apartment buildings typically do not allow subletting, one can see how the stories of easy money could lead tenants to forget that the space wherein they live, doesn’t actually belong to them and hence is not theirs to rent out.

Those blessed tenants who did have permission to sublet were quick to sign on as hosts, and many of those folks, renter or homeowner alike, who had never considered having roommates, and didn’t need to, were now all agog at the prospect of having guests.

An attitude of entitlement prevailed in some quarters.  I recall overhearing a conversation,  where one host was complaining that his landlord had stopped his hosting career, and was looking for a new apartment to rent out so he could be a host again.  Another host, a homeowner, said that in her view hosting was primarily for homeowners.  The first host snapped back that he couldnt’ afford to buy a house,  but he didn’t feel that should mean he couldn’t be a host.   There seemed to be a sense of a right to be a host. In my imagination I envisioned someone borrowing a car from his next door neighbor and then, without getting permission from his neighbor to do so,  insisting on his right to rent out his neighbors’ car for profit, since “it’s too expensive to buy my own car, and I have a natural call to be a car rental agent.”

But I think that it’s Airbnb that has contributed to this sense that many have, that people sort of have this right to be hosts, quite apart from legitimately having any property that they have legal authority to rent to others.  As Airbnb presents it, hosting is something quite different from being in the property rental business — and that misrepresentation is the cause of innumerable problems, (as I describe in this blog –  Dont’ Be An Airbnb Baby  ) because hosting most definitely is part of the property rental business.

I realized things were getting all gaga, last July, when I went hiking in a local park. and had this experience for the third time:    As hikers passed me on the trail, I heard their excited conversation, “….well we can just Airbnb it…..Susan does that and she…..” I realized that if I had heard hikers on these trails talking about Airbnb-ing their places out, three times already in a year, that meant that things were getting crazier.  Nuttier and crazier and more and more Airbnb everywhere.

This last winter business got really slow.  I saw some 20 to 30 posts in various host community groups lamenting how “slow” business had been.  Hosts were asking others if they were slow as well.  Hosts were asking for tips in getting more business.  I was thinking to myself that eventually many of these hosts were going to give up.  16hoz0lThe amount of available business was insufficient to support the number of hosts in certain areas, and so that available business was being stretched too thin.

I had predicted this would happen, not long after getting started in hosting, when I started seeing people blabbing about how much money they were making.  I couldn’t believe that people didn’t realize that blabbing about how much money they were making, would ultimately lead to them making a lot less money.  As for me I kept my mouth shut, but I also wasn’t interested in maximizing profits.    I was interested in being comfortable in my own home — something I had never been able to achieve with standard roommates.

It was easy for me to predict, 3 years ago, what would happen with Airbnb hosting — as more and more people got wind of making “easy money” as Airbnb hosts, more and more would sign up to be hosts.  This would have numerous consequences that would ensure that hosts would from then on make less and less money.  First that there would be less business available for everyone since areas would become saturated with hosts.  Secondly, people would sign up as hosts, do well during the first month during which all hosts get artificial promotion over existing more tenured hosts, and then some would start to flop as time went on,  when they had to start competing with other hosts.  Many of these hosts would then quit hosting.

Third, prices would drop overall, as competition increased, and eventually this would bring things to the point where short term renting was no longer more profitable than long term renting — in fact in many cases (particuarly in cities where rents are already high due to other market forces)  it would be much less profitable than standard long term renting.

Fourth, affordable housing advocates and Airbnb foes would be sure to rail against Airbnb and hosts alike, the more they heard about hosts making easy money or lots of money.  I don’t know about you, but it’s been my experience as a human being on this planet, that if someone is making good money in any endeavor which has the slightest element of controversy about it, those who aren’t making that money or who can’t, are going to get envious and resentful and will go what they can to put a halt to others’ success.  It seems to be in human nature, that people don’t like to see others doing much better than they are, and that those who are miserable, tend to like to try to make others miserable.  Then too, it is predictable that those who are finding their lives made more difficult by increasing rents and housing scarcity, are going to be pretty resentful of those who they perceive as profiting from their hardship, or who they perceive as profiting in ways that cause their hardship — particularly if these Airbnb hosts are flaunting their success. And when enough renters are upset and experiencing housing hardship, city governments listen, and Airbnb hosts may find their opportunities correspondingly curtailed.

Moral of the story:  If you are successful as an Airbnb host, don’t brag about how much money you are making.  Because, if you have some foresight (or long sight, as the case may be) you will realize that the more you flap your jaws about how much money you are making as an Airbnb host, the less money you will eventually be making as an Airbnb host.

Which ultimately I think is fine.  Since in my ideal world, people aren’t buying up or renting out numerous investment properties just so they can make more and more money —   they are hosting guests because it’s something that they like to do,  they like meeting people, it is stimulating and brings good energy to their home or property — and besides, for many of us — it is so many times better than having permanent tenants or roommates!