Sunita Narain: AirBnb, Uber and informal businesses

The fact is Airbnb and Uber are part of the inevitable change in our future

AirBnb – the room rental company that does not own any rooms – has just sued the city of New York. Why? Because the city has introduced a Bill to penalise anyone who rents out their apartment for less than 30 days. This would effectively kill Airbnb’s business, which makes every household owner a potential hotelier. Airbnb provides an online listing system — anyone who owns a house or many properties can rent out space. The business cuts into the profits of conventional hotels, who have to buy land, build rooms and take care of the establishment. In Airbnb’s case, the costs are low and distributed. More importantly, thousands, even millions, of rooms suddenly become available, which eat into the market of house rentals or hotels. Airbnb is, not surprisingly, hitting old business, which too is hitting back.

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