Sharing Economy Trends in Travel

The phrase “the Sharing Economy” may not be something that you talk about regularly or have even heard of but if you have ever booked a room or an apartment with Airbnb or VRBO instead of a hotel, or taken an Uber or a Lift instead of a cab, then you live in the sharing economy. This means you should know how it is changing according to the fifth annual Allianz Travel Insurance Sharing Economy Index.

What is the Sharing Economy?

The idea behind the sharing economy is that we can all save money if we share what we have. I have an extra room in my house and you need a place to stay. I need a ride to the airport and you would be glad to take me for a fee. There has been a sharing economy at least since the first neighbor borrowed a cup of sugar or a snow shovel from their neighbor instead of buying their own, but the internet has extended this act between neighbors to strangers. 

The Internet, the Sharing Economy, and Trust

The internet poured gas on this sharing idea by making it much easier to coordinate who has what and to keep track of reputations that enable you to decide who deserves your trust. 

Part of the thing that makes the sharing economy work is trust. If you don’t have a general belief that many people are nice people there is no way that you would get in the car of a stranger… just like your mother told you never ever to do. But when you book an Uber you see that 1000 people may have ridden with this stranger before and arrived safe and give them a 5-star rating. It makes the decision to trust this stranger much more rational. You may even decide that it is more rational to get in a stranger’s car with Uber than with a traditional taxi. While the taxi driver may be a professional, no one is keeping track of the fact that you climbed in that car.

Sharing Economy Trends in Travel

The fact that the sharing economy relies on trust makes the recent survey information from the fifth annual Allianz Travel Insurance Sharing Economy Index even more interesting. Allianz has been tracking what attitudes are about the sharing economy in recent years and these attitudes are changing.

Fact 1: GenXers and Millennials are more likely to trust and use the sharing economy

The first conclusion that younger people are more likely to book an Airbnb or take an Uber is probably not a surprise to anyone. 

Fact 2: GenXers and Millennials are losing trust in the sharing economy

The second conclusion in the survey is that while they are still the biggest users of the sharing economy companies when they travel, younger people are losing some of their trust in these companies which is not good news for those companies.

• Millennials who trust the sharing economy has dropped from 83% to 76% over the last 2 years
• Millennials intention to use the sharing economy when they travel has dropped from 77% to 63% in the same time period
• GenXers who trust the sharing economy has dropped from 60% to 41% over the last 2 years
• GenXers intention to use the sharing economy when they travel has dropped from 69% to 55% in the same time period

Fact 3: Baby Boomers are increasingly likely to use the sharing economy when they travel

• Baby Boomers who trust the sharing economy has dropped from 47% to 44% over the last 2 years
• Baby Boomers intention to use the sharing economy when they travel has risen from 19% to 24% in the same time period

Like their younger counterparts, baby boomers are also losing some of the trust in the sharing economy but their planned use of the sharing economy is increasing. That may seem a bit contradictory but while trust is an important part of the reason people will use the sharing economy it isn’t everything.

Know, Like and Trust

To make a purchase decision of a product marketers talk about consumers knowing, liking and trusting that product. Trust is an important part of that mix, but it is not everything. One of the things that is changing is that over the last few years it is likely that more people know about the option of using Airbnb or Uber. Many more have actually stayed in an Airbnb or taken an Uber and liked it. But do they trust it? Sort of. 

The Allianz Travel Insurance Sharing Economy Index shows another level of detail for how much people trust these services and the answer is that the majority of people sort of trust them. That’s about right. We have had great experiences with staying in an Airbnb, but we always read reviews because some of them are not great. We have a friend who was given a “room” that was really just a bed in the kitchen separated by a curtain. He left. He contacted Airbnb and they took down this listing. 

But for that matter, a lot of us have had bad experiences with regular hotels and taxi drivers. So somewhat trustworthy I think is not a worrying trend… it is the reality.

A Case for the Sharing Economy

Do the Airbnb’s of the world need to worry that people are trusting them less. Yes. Would I panic if I owned stock in these companies? No.

If you have been reading my blog for a while then you know that I am a participant in the sharing economy. 

• As I write this, we are renting out 4 rooms in our 5 bedroom home to college students who are summer interns at Google and other companies in our area
• We largely pay our mortgage by renting rooms on Airbnb (see  Welcoming Strangers – Becoming an Airbnb Host)
• We have saved money by staying in Airbnb and other vacation rentals on vacation ( see  Our First Stays in Airbnb and a First Time Airbnb Guest Coupon)
• We pretty routinely take an Uber or a Lyft to the airport instead of paying for airport parking (see The Secret Lives of Uber Drivers)
• For a while, we even loaned out our car when we parked it at the airport with the now-defunct FlightCar

But do I trust the sharing economy? Sort of. I still read reviews of the people who are going to stay with us or the Uber driver who is picking us up. I still check that the face of the driver matches the person in the car.

Will the sharing economy take over everything? No. Sometimes it is just easier to book a hotel. I suspect that as Millenials and GenXers have more money… they are finding that also.

But I think the sharing economy is here to stay in some weird and wonderful and every changing way.

This post is sponsored by Allianz Global Assistance (AGA Service Company) and I have received financial compensation. However, all thoughts and opinions are my own.