<story><title>Ahead of IPO, Airbnb achieves profitability for second year in a row</title><url>https://techcrunch.com/2019/01/15/ahead-of-ipo-airbnb-achieves-profitability-for-second-year-in-a-row/</url></story><parent_chain><item><author>gringoDan</author><text>They&amp;#x27;re often considered similar businesses, but intuitively it seems to me that, long-term, Airbnb will be valued higher than Uber and other ridesharing companies.&lt;p&gt;Home rentals seem to be simpler market to operate in than coordinating real-time supply and demand between drivers &amp;amp; riders. Additionally, Uber seems to be facing issues on the driver side of the business - they have a $650 driver acquisition cost &amp;amp; a 12% monthly churn rate [1].&lt;p&gt;It seems to me like this is the economics problem of a return on capital (Airbnb) vs. return on labor (Uber, etc.) playing out in the on-demand space.&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;seekingalpha.com&amp;#x2F;article&amp;#x2F;4231786-will-wall-street-show-uber-patience-amazon&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;seekingalpha.com&amp;#x2F;article&amp;#x2F;4231786-will-wall-street-sh...&lt;/a&gt;</text></item></parent_chain><comment><author>venantius</author><text>The main thing is that Airbnb has a global economy of scale - having more hosts in Japan actually does benefit their guests who reside in New York year-round. Competitors to Airbnb similarly must achieve global scale in order to compete in a serious way. There are one or two meaningful exceptions (China, possibly the US domestic market), but essentially any Airbnb competitor must achieve global scale in order to be a serious threat.&lt;p&gt;By contrast, Uber has to fight to win &lt;i&gt;each city&lt;/i&gt;, and most of its users will use Uber for the most part within that city. Adding more drivers to Tokyo does not have a meaningful impact on the resident of New York.</text></comment>
<story><title>Ahead of IPO, Airbnb achieves profitability for second year in a row</title><url>https://techcrunch.com/2019/01/15/ahead-of-ipo-airbnb-achieves-profitability-for-second-year-in-a-row/</url></story><parent_chain><item><author>gringoDan</author><text>They&amp;#x27;re often considered similar businesses, but intuitively it seems to me that, long-term, Airbnb will be valued higher than Uber and other ridesharing companies.&lt;p&gt;Home rentals seem to be simpler market to operate in than coordinating real-time supply and demand between drivers &amp;amp; riders. Additionally, Uber seems to be facing issues on the driver side of the business - they have a $650 driver acquisition cost &amp;amp; a 12% monthly churn rate [1].&lt;p&gt;It seems to me like this is the economics problem of a return on capital (Airbnb) vs. return on labor (Uber, etc.) playing out in the on-demand space.&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;seekingalpha.com&amp;#x2F;article&amp;#x2F;4231786-will-wall-street-show-uber-patience-amazon&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;seekingalpha.com&amp;#x2F;article&amp;#x2F;4231786-will-wall-street-sh...&lt;/a&gt;</text></item></parent_chain><comment><author>bradleyjg</author><text>On the other hand Uber is now operating mostly aboveboard while Airbnb, at least in its single largest market (NYC), is like Napster in its second incarnation—-while it may itself not be violating any laws the overwhelming majority of its facilitated transactions are illegal. That’s a dicey thing to invest in.</text></comment>