The purpose of this report is to examine the major problems that are prevalent at AirBnb and

Uber. One of the major problem Uber and AirBnb experiences is Lack of security. This is due to no

proper background checks, no insurance provided for hosts and guests, Illegal Issues. Due to this,

customers are finding hard to trust these companies when it comes to safety. As the article in The

Guardian mentions, Uber driver accused of rape in Delhi due to which the government implemented a

temporary ban on this company. On one hand, AirBnb ran illegal rentals in New York city, on the other

hand Uber was sued as a result of failing to check criminal history of its drivers.

Another problem is the Rating system of AirBnb and Uber. Although having a rating system

could be beneficial for customers who are new and is looking for opinions of whether the hotels they

select is affordable and with great customer service or whether the ride with Uber is cheaper than other

companies like Uber. Rating systems includes reviews which often seem helpful; however chances are

some of the negative comments maybe from its competitors. Currently, there is no way to verify if the

comments are real. Therefore, relying just on the reviews would be a bad choice for customers.

Third problem is Surge pricing. When a demand goes up for a product, a business may choose to

increase its pricing for that product. This is known as surge pricing.

AirBnb and Uber, the two tech startup companies have lately been experiencing issues within

their system which has caused customers to think many times before using their services. Lack of

Security has become a huge concern for not just employees who work for AirBnb and Uber, but also for

new customers who have recently started using these services. An former employee of AirBnb came up

with an interesting fact that “If you want to host AirBnb guests, you can grab any pictures from the

internet like a nice five star villa or a beautiful castle and declare yourself as the official owner of this

listing, you do not need to provide any form of ID or proof of ownership.” Some of the causes for this

problem include: No proper background checks of hosts and guests, No insurance for hosts - it becomes

difficult for the hosts to recover all of their money back for the damages caused by the guests. Another

cause

One of the major causes for Lack of security issue is not doing background checks on the hosts

and customers. Background check is important as it ensures safety by determining whether the user has

had any criminal records. In the Uber banned in Delhi case, “Authorities in Delhi had banned US-based

taxi firm Uber from operating in the Indian capital after one of its drivers was accused of raping a

passenger. Police said they were considering legal action against the online taxi service for failing to run

effective background checks.” The risk associated with no background checks is that person that is hired

could harm an individual by harassing them (Just like the Uber case), steal from the company itself, or

vandalize someone’s property (as many of the AirBnb cases states). Second major cause of lack in

security is that there is no insurance for hosts or users.

Rating system plays an important role for companies like Uber and AirBnb. AirBnb is a company

that helps people, who are looking for a place to stay. Their rating system includes reviews from guests

who have used their services before. The advantage of having this system is that it allows people to read

opinions of customers who have stayed at their hotels, but not all the reviews on their sites are real. In

other words, many of the AirBnb competitors also visit their sites and post negative comments about its

services. Therefore, for new guests, relying just on reviews should not be the only option. Also, “AirBnb

recommends that first time listers set their prices less aggressively to encourage renters who might

avoid a place without reviews”

Third problem that AirBnb and Uber are facing is Surge Pricing. When demand for certain things

or products increase, prices for that product increases as well. This rise in price is known as Surge

pricing. As much as AirBnb is good at its most of the services, the amount of money hosts make is huge.

“Mike Curtis introduced Price Tips, a tool that lets AirBnb hosts see exactly where they should set the

price of their property on a day-by-day basis to make it most likely to be rented.”

References

Trust&Safety at airbnb behind low level. (2015, June 10). Retrieved July 17, 2015, from http://www.airbnbhell.com/trustsafety-airbnb-behind-low-level/ Burke, J. (2014, December 8). Uber banned in Delhi after taxi driver accused of rape. Retrieved July 17, 2015, from http://www.theguardian.com/technology/2014/dec/08/uber-banned-delhi-taxi-driver-accused-rape

All eyes on the sharing economy. (2013, March 9). Retrieved July 17, 2015, from http://www.economist.com/news/technology-quarterly/21572914-collaborative-consumption-technology-makes-it-easier-people-rent-items

Ingraham, N. (2015, June 4). Airbnb is using machine learning to help hosts make as much money as possible. Retrieved July 17, 2015, from http://www.theverge.com/2015/6/4/8730141/airbnb-price-tips-machine-learning