Another perspective is that it's cheaper because it lowered the barrier to entry so that the smallest of entrepreneurs could enter the market. Rather than purchase a hotel, you can rent out a studio apartment. You can start with one studio and then expand over time. You don't need much (if any) additional capital. Airbnb is your entire marketing department and you only pay them when they deliver a client. Handy cleans for you and fixes the shower if it breaks.
Brands are very lucrative assets. Maybe part of this shift is an Airbnb brand tax of 6% in place of a Hilton, Marriot, or SPG tax of 30%.
How much of the old model was there to protect monopolies and how much of it was there to provide for consumer safety? How do we incorporate the latter and eliminate the former? That's the real question in my mind.
the medallions are distributed in auction, to align with the great american myth that those who can pay the most deserve it the most.
Granted, alternatives would probably involve taxi companies wining and dining to get preferred treatment.
Once we've decided on having some sort of system to limit the number of taxis, there's going to be some form of selection. Apparently people thought auction was the "least worst" way (compared to some other selection method).
>Apparently people thought auction was the "least worst" way
Auctions only confirmed the intrinsic value of medallion in that system - $2K/month rent pay for a medallion in SF before the auctions corresponds to something like $200K value of a rent-generating asset.
>Once we've decided on having some sort of system to limit the number of taxis
exactly, protecting monopoly as such a limit has nothing to do with consumer safety.
Edit: just googled - the medallion price in NY is $1M and in SF - $300K. Sorry for using obsolete data (holy macrel what a nice exponentially looking price ride of recent 3 years Uber has killed : http://www.aei-ideas.org/2014/06/chart-of-the-day-nyc-taxi-m... )
I believe that's historically what caused the first introduction of such a system, in London some centuries ago: residents complained there were too many hackney carriages driving around the streets, and wanted them limited to a fixed number. (They also wanted them better maintained and more safely driven, which led to additional rules.)
Yeah, when it comes to small B&B operators, there's actually not much difference between what airbnb does and the services of a listing provider like wotif.com or booking.com. Both take payment from the customer upfront and charge a percentage on bookings. Airbnb doesn't require you to be a business though to sign up.
Brands are very lucrative assets. Maybe part of this shift is an Airbnb brand tax of 6% in place of a Hilton, Marriot, or SPG tax of 30%.
How much of the old model was there to protect monopolies and how much of it was there to provide for consumer safety? How do we incorporate the latter and eliminate the former? That's the real question in my mind.