Easy Targets: Lessons from Airbnb and Uber

In our mobile world, if Airbnb and Uber are two of the winners, then hotels and taxi cabs are the easy-to-identify losers. However, nothing is quite so simple.

In fact, having just returned from Nashville following another vibrant CRS, they can’t build hotels fast enough. Same is true in many other places.

In fact, having just returned from Nashville following another vibrant CRS, down there and in many other markets, they can’t build hotels fast enough.

According to a recent article in The Atlantic, it’s not hotels that have suffered the most, but rather a different group that previously flew under the radar. Renters.

As you know from experience, business travelers prefer to stay in hotels. During the great recession, business travel slumped and hotel construction was hard to get financed. In the mean time, usage of “private accommodations” (Airbnb) surged. According to MoffettNathanson, between 2010 and 2015, the share of American travelers using these accommodations quadrupled.

By expanding the number of available beds in high demand markets, hotel prices have been stable, while occupancy rates are high. Travelers, hotel operators and Airbnb hosts all win.

The downside comes into sight, when you’re looking for an apartment or condo in a high demand neighborhood. Property owners no longer need to sell or turn in the lease, which reduces turnover and inventory.

More demand with lower supply equals higher prices.

Looking at Uber, it’s easy to think of taxis as being the easy target. However, a recent New York Times article reports that there’s another victim: public transit.

Based on a recent U.C. Davis study, between 49% and 61% of all ride hailing users would not have made the trip or would have walked, biked or used mass transit if a ride-hailing app was not available.

Uber is actually contributing to traffic problems with more cars on the road and reducing ridership on public transit. Certainly not what comes to mind, when I see taxi drivers queued up at the airport and everyone is using their phone to find their Uber/Lyft driver.

Where Radio Fits In

Pandora has long championed itself as the heir apparent to AM/FM radio.  However, as CDs get set to go away this summer at Best Buy and CD players have been removed from new cars including Honda Civics, it appears that physical music collections are the real endangered species.

Meanwhile, AM/FM Radio has a listening advantage of 720,000,000,000 minutes per month over pure-play streams according to Nielsen Audio’s Comparative Metrics Report.

That’s billions with a “B” and it’s driven by employed listeners who earn a paycheck and have money to spend with our advertisers.

On behalf of Catherine Jung, Doug Smith and everyone here at DMR/Interactive, thanks for working to drive radio forward.

Andrew Curran, President and COO

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