Demand Interactions in Sharing Economies: Evidence from a Natural Experiment Involving Airbnb and Uber/Lyft

62 Pages Posted: 23 Feb 2018 Last revised: 16 Oct 2020

See all articles by Shunyuan Zhang

Shunyuan Zhang

Harvard University

Dokyun Lee

Carnegie Mellon University - David A. Tepper School of Business

Param Vir Singh

Carnegie Mellon University - David A. Tepper School of Business

Tridas Mukhopadhyay

Carnegie Mellon University - David A. Tepper School of Business

Date Written: January 14, 2020

Abstract

We examine whether and how ride-sharing services influence the demand for home-sharing services. Our identification strategy hinges on a natural experiment where Uber/Lyft exited Austin in May 2016 in response to new regulations. On a 12-month longitudinal data spanning 11,423 Airbnb properties, we find Uber/Lyft’s exit led to a decrease of 17.8% in Airbnb demand in Austin. On the supply side, the nightly rate went down by 4.02% and the supplied listings decreased by 6.64%. Further, the geographic demand dispersion of Airbnb decreased and became more concentrated in areas with access to better public transportation. The absence of Uber/Lyft reduced demand more for lower-end properties—whose customers may be more price-sensitive. Further analysis leveraging individual hotel data reveals an increase in Austin hotels’ occupancy in the absence of Uber/Lyft, with a greater increase for hotels that are more substitutable with Airbnb. These results indicate ease of access to transportation in residential areas is critical for the success of home-sharing services. Any policies or regulations that negatively affect ride-sharing services may also negatively affect demand for home-sharing services.

Keywords: sharing economy, Airbnb, Uber, Lyft, sharing effects, natural experiment, geographic demand dispersion, transportation cost

Suggested Citation

Zhang, Shunyuan and Lee, Dokyun and Singh, Param Vir and Mukhopadhyay, Tridas, Demand Interactions in Sharing Economies: Evidence from a Natural Experiment Involving Airbnb and Uber/Lyft (January 14, 2020). Available at SSRN: https://ssrn.com/abstract=3124712 or http://dx.doi.org/10.2139/ssrn.3124712

Shunyuan Zhang

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Dokyun Lee

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Param Vir Singh (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-3585 (Phone)

Tridas Mukhopadhyay

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-2307 (Phone)

HOME PAGE: http://web.gsia.cmu.edu/display_faculty.aspx?id=102

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