It seems space sharing is more popular than ride sharing.
Lodging rental-sharing service, Airbnb, along with co-working company, WeWork, will surpass ride-sharing services (such as Lyft and Uber) in revenue within three years, a new report from Juniper reveals.
Airbnb has significantly disrupted the hotel industry. Share-space platforms such as Airbnb and WeWork are expected to have revenue grow from an estimated $2.3 billion in 2015 to $6.1 billion globally by 2019, experts say.
The Secret to Airbnb’s Success
Research author Lauren Foye explained: “The shared space industry, which includes provider Airbnb, is set to significantly impact the hotel industry, with consumers set to spend over $34 billion in 2020. That sum represents approximately 6% of today’s global hotel industry market size.”
According to the report, the success of Airbnb lies with its ease of use and no-nonsense booking, as well as the financial rewards available to registered property owners.
There is another important factor that attributes to Airbnb’s success. It, and other space providers, is not bound by the same rules and regulations as traditional hotels and lodging spaces, leading them to undercut pricing and avoid restrictions.
Uber Continues to Go Global
While space-sharing companies will exceed ride-sharing services’ revenue, Uber, and other similar services are expected to steadily increase revenue and expand into new markets.
Uber has attempted to gain traction in China but has not gained a large foothold due to competitors local to the region.
The company has plans to expand to India, with its UberMOTO service, as well as to Thailand.
Gig Services for the Enterprise?
The sharing or “gig” service model is expected to be adopted by businesses rather than just remaining consumer-focused.
Analysts see developing nations as a vast future market for ride-sharing services. Additionally, companies such as Uber have started partnering with auto manufacturers to offer new technologies and services.
One such partnership is GM’s $500 million investment in Lyft to create a taxi service that uses autonomous vehicles.
The report reveals that ride-sharing services, which typically take just 20% of driver earnings, will see revenues grow from an estimated $3.3 billion in 2015 to $6.5 billion by 2020.
As per the report, “The next, and potentially most disruptive, sector to emerge in the sharing economy will be a crowdsourced product design (Collaborative Innovation), manufacturing and B2B solutions segment.”
Businesses will use new technologies resulting from shared services and integrate them into existing infrastructure such as manufacturing supply lines and logistics solutions.
This type of “shared manufacturing” has the potential to reduce production times for prototypes and concepts, while helping to “scale-up production projects designed by young startup businesses,” the report states.