During a recent trip to Denver, I had the opportunity to explore two services of the sharing economy: Airbnb and Uber. I used Airbnb, a website for people to list, find, and rent lodging, to rent an apartment for two days in downtown Denver two blocks from where my meetings were held. The cost was $242 (about half the cost of a hotel in the area). I also used Uber, a taxi dispatch service in which people provide transportation using their personal vehicles.
I took a regular taxicab from the airport to the apartment after waiting 20 minutes in the taxi line. The taxi was dirty with torn upholstery and my driver indicated he had been waiting in line with cab drivers at the airport for a few hours. The cost was $67 plus tip. Note: the Denver International Airport is about 40 minute drive to downtown Denver.
When I arrived at the apartment building, I called the tenant from whom I was renting. She buzzed me into the apartment remotely using her cell phone. We had an email exchange prior to my arrival in which I gave her my approximate arrival and departure times. The apartment was clean, orderly, and modestly furnished. A list of guest information and a key were on the table when I entered. She had given me recommendations on nearby restaurants, groceries stores, and other services. The apartment complex had a pent-house exercise facility, study area, and deck with gas grills and comfortable furniture, all with a spectacular view of the Rocky Mountains.
When I departed two days later, I called the tenant to let her know that I had left and was leaving a few groceries in the refrigerator. Having a full kitchen with utensils allowed me to prepare my meals while I was in town.
Five minutes before leaving the apartment, I had put in a request to Uber, using the app on my iPhone, for a ride to the airport. I had a response within 2 minutes and was told that the driver would pick me up at the apartment in 3 minutes. I could see on the Uber map the location of the driver as he approached the apartment complex. I could tell in advance that it was a Toyota Corolla driven by Mohamed that would be picking me up. The Uber app showed a rating for the driver that had been submitted by other riders. Mohamed turned out to be a very personable young man from Libya driving a clean well-maintained vehicle. The cost of my pleasant trip to the airport was $33.
Airbnb and Uber are two example of the disruptive power of technology. Hotels, visitors’ bureaus (dependent on the hotel tax) and local governments (lobbied by the hotel industry) are attempting to prevent the Airbnb renters from sharing their dwellings using zoning laws and other means. Airbnb has 1.5 million listings in 34,000 cities and 190 countries. Here in my small community of Holland, MI (pop. 30,000), eighteen property owners with listings on Airbnb have received notice from the City telling them they are in violation of the zoning law. Currently, the City Council is studying the issue.
Uber drivers are despised by regular taxi drivers who think they’re “destroying their industry.” Cities are attempting to ban the use of Uber and passing ordinances to block the use of “unlicensed” drivers to provide rides for hire. Uber was founded in 2009 and has since expanded to 300 cities internationally and has an estimated worth of $62.5 billion.
What role will the “sharing economy” play in economic development? What disruption will technology bring to economic development? Will we embrace change or fight it?