The Platform Advantage. For who?


The “platform advantage” is something every online business strives for; where your platform becomes the default method in which people use your chosen service.

carsales sells a car every minute (you might have seen the ads 🙂 ) yet doesn’t own a vehicle; Uber is a the biggest taxi company in the world and also doesn’t own a vehicle; and Airbnb is the biggest accommodation provider in the world yet doesn’t own any real estate.

Each of these businesses has leveraged their “platform advantage” primarily through matching people with people in order for them to transact be it to buy a car, get a ride or rent a place. I still have people asking me if carsales has certain types of cars in our stock and when I explain that carsales is “just” the online platform for buyers to find cars from sellers, the concept that “it is just a website” can be hard to fathom for some (how can an ASX100 company be just a website?).

There are, however, many moving pieces in operating an operating online marketplace like carsales and one of them is managing your brand, especially since the primary purpose of the business is relying on a buyer and seller to reach (and execute) a mutually acceptable deal to purchase a car. carsales does not get involved in the transaction but when something goes astray, it is the carsales brand that can take a hit and as such carsales has lots of proactive and reactive measures to stop things that could in any way damage the carsales brand.

“This Airbnb thing is so easy…”

Airbnb is the same. It has a user controlled rating system for vendor and renter as well as a long list of terms and conditions that are meant to protect both parties; until one side takes advantage of those “terms and conditions” that is. We had an example using Airbnb over the New Year period where the Airbnb platform was taken advantage of.

My sons and a few mates were heading down the Mornington Peninsula for New Year’s Eve to join another group of friends who had organised a gathering at a family property. They searched Airbnb and found a place that suited their needs beautifully with the only drawback being that they had to take a minimum of three nights so they thought they’d make a weekend of it. This Airbnb thing is so easy.

They arrive at the property at around 5pm and headed out onto the back verandah to have a few drinks, put some music on and play a little backyard cricket in the confined space. They were living the dream.
Just after 6pm (yes they had been there just over an hour) they receive a call from the person (let’s called her Zarah) they had organized the Airbnb stay with – she had received a call from a neighbor complaining about the noise so she informed them that they were being evicted immediately for excessive noise and hosting a party. WTF? Summer holiday period, late Saturday afternoon, sitting on the back verandah with music on and they were being evicted for this? WTF?

Zarah arrives shortly thereafter with the police. Yes, the police. They inspect the property (nothing had been used, no beds slept in, etc) so obviously nothing is out of place, no damage (heck they’d had an hour there) and the police apologise to the boys saying “this was not what we expected but it is out of our hands, sorry boys”.

This is where an online platform like Airbnb differs from a hotel or caravan park

The boys contact Airbnb to argue their point and at the very least get some if not all of their 3 nights money back; Airbnb should be responsible after it all it was Airbnb who facilitated the rental. Airbnb take the boys version of events and then take Zarah’s version before informing the boys “sorry, there is nothing we can do because you have violated Airbnb’s terms and conditions by having excessive noise and hosting a party”. WTF?

Let’s get this right again. Airbnb rental, summer holiday period, late Saturday afternoon, no request to kindly turn the music down just a neighbour’s word that loud music equals a party and this constitutes a breach of Airbnb’s terms and conditions to which Airbnb wipe their hands of all responsibility and the boys lose their money (and a summer experience).

Was this a scam? This is where an online platform like Airbnb differs from a hotel or caravan park (the traditional alternative) where they would have people that worked for them on the premises to control exactly these types of scenarios. What was stopping Zarah from organizing a neighbor to call to complain so that she could “exercise her Airbnb rights”, take 3 nights income and alleviate all risk by getting them out before they have even stayed?

…my older boy went to a 21st birthday celebration at an Airbnb rented house 3 weeks later…The neighbor came over early in the evening, introduced himself and said “have a great night just turn the music down after midnight if you can please”…

Airbnb were not interested, this was between the boys and a faceless Zarah for them. For the boys yes Zarah is a douche but it is was Airbnb who failed them here in their eyes. The Airbnb accounts were quickly deleted and they mercilessly sprayed Airbnb through any and all of the social media accounts they were active on (read, all of them), letting everyone know just how easy it is to be taken advantage of on the Airbnb platform and Airbnb didn’t care in the slightest.

In reality, did the Airbnb brand take a hammering? Not really, this was not worthy of a TV news grab to cause too much brand damage. No one was hurt, no property damaged, a few kids (and their parents) felt they were “duped” out of $800 odd dollars, a “first world problem”.

Was this Airbnb’s fault? Probably not. They were running their business according to their “platform advantage” that works seamlessly 99% of the time in all likelihood.

Incidentally, my older boy went to a 21st birthday celebration at an Airbnb rented house 3 weeks later back down the Mornington Peninsula. The neighbor came over early in the evening, introduced himself and said “have a great night just turn the music down after midnight if you can please”. That wasn’t hard was it?

This is the new world we live in where using online platforms to find someone willing to rent their house out or drive them from point A to point B or buy their car is the new norm. We still have to deal with people at some point though as the “platform advantage” only goes so far. I wonder for how much longer.


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