Companies like Uber and Airbnb are often referred to with terms like “revolutionary” or “disruptive,” both of which are used in a positive light. They’re looked upon by many as models for how to challenge preconceived notions about a given market or product, and they have brought to light an entire “sharing market” that most people didn’t know existed.
But while those two companies in particular have been pretty successful overall, they’ve faced a lot of problems on the ground.
A spate of new laws and regulations across the country are making it harder for people to use Airbnb and make any real profit off of it. These rules are usually designed to address common complains about Airbnb–they’re designed to help protect people who use the service as guests, not as hosts. Like ride-sharing programs, home-sharing programs can come with a lot of potential hazards, at least for users. Companies tend to avoid too much legal or financial burden when one of their users or “employees” breaks the law or needs the help of the law to protect them from customers.
And both Airbnb and Uber have built models based on showing up in a market and making themselves indispensible before municipalities can catch up and regulate. If those regulations become too much, these might abandon the city, leaving people without jobs or access to a service that they took for granted.
There is a tendency among entrepreneurs to “borrow” business models from success stories like Uber, but it’s important to pay attention to the problems those models have as well. If your business model is basically “get in there and profit till you get regulated out of the place,” it’s not sustainable. It’s slash and burn, and it’s going to result in diminishing returns for anyone who wants to try and build on that model.
