Re:Another Airbnb Victim Tells His Story: “There Were Meth P...
by moonlighter on Sunday July 31, 2011 @05:58PM
(#2829762)
"costly one-time background checks" and "all benefit from scale" sound like an oxymoron to me. Implementing all the suggestions you listed would significantly cut into their revenues and make their business model obsolete.
Re:Another Airbnb Victim Tells His Story: “There Were Meth P...
by gojomo on Sunday July 31, 2011 @06:05PM
(#2829782)
High-fixed setup costs, low marginal costs make a defensible moat. That's the classic case of a returns-to-scale monopoly.
Background checks are a one-time cost per new participant.
It may be costly (in money or time) to set up your initial account, and acquire a positive reputation via a long history of mutual reviews... but then you're part of a large pre-vetted community.
Do you then want to go through that procedure many times with every new upstart? Or just once with the largest market?
And, the components of a potential solution – costly one-time background checks, longer reputation histories, insurance pooling, deep experience with all abuse variants – all benefit from scale. Participant fear enhances the winner-take-all nature of the market... if the leader can best assuage that fear.