David Rosenthal: belief

Transcript context

…I think the ones that they notably don't have are cornered resource or switching costs. For consumers, it's very easy to switch as long as there's another economy and this is related to cornered resources. You would think their hosts would be the cornered resource, but for a host, it's actually very easy to become un-cornered and go list on multiple of these systems. I think that's going to be a thing that we see increasingly more and more over time. I think to some extent, the rating and review history is some lock-in there, not that much and less than it used to be. In the early days, when this was a new concept and people were like, I really need a lot of trust here to make this work. I think it was more powerful, but now, less than HomeAway, it’s fine. Well, one thing that I want to do here—and it's not exactly power, but it's like a business model feature that I want to talk about—is the different types of market places and what take rates you can command with each one. I've heard it described where something like Uber is marketplace assign versus something like Airbnb is marketplace assist. Where in marketplace assign, because all of the supply is completely homogenous, it's effectively the same experience. You don't care as the demand, which one gets assigned to you. You just wanted to be close, and as long as it meets that criteria, great. When that is the case, the business can command a higher take rate. They get to control more of the economics. For something like Airbnb, they assist me to browse, but I pick the specific house, and boom, I've booked it. In the mind of the consumer, the real merchant when I'm getting an Uber feels like it’s Uber. The merchant when you're on Airbnb feels like it's the host and Airbnb is just helping me with that transaction. They obviously have fees on both sides. They charge guests more than the host, but they have fees on both sides. They're trying desperately to get more and more of the take rate, but ultimately they're never going to get to that 30+% plus that you see in ride-sharing where people feel like they're buying from the company when they're just facilitating you to buy from the provider.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.