Aug 8, 2016 · 6 minutes

In the shadow of all the Uber madness over the last seven years, is the story of Airbnb.

In any other era, Airbnb would be considered lawless and disruptive.

In any other era, Airbnb would be the cause of and solution to major cities’ ills.

In any other era, Airbnb’s founder and CEO-- former competitive bodybuilder Brian Chesky-- would be considered the ultimate “bro founder.”

In any other era, Airbnb would be considered the most well-funded, valuable startup. It’s said to be raising another $850 million at a $30 billion valuation.

But of course, this isn’t any other era. This is the Uber era: When one company’s history-making, investor infuriating fundraising, proven underhanded tactics to silence its critics, payoffs to non-profits to bolster its image, wholesale payoffs to stay legislatures to do their bidding, and unchecked (except in China!) belief it its own birthright to dominate the world’s transportation grid, makes any ambition, ruffled political feathers, or valuation growth seem comparatively modest.

That this latest Airbnb fundraising puts off its IPO further is the obvious analysis from the news. But there’s a difference in Airbnb being willing to push off an IPO further and the gamble that Uber faces doing the same. And it may be the first time the stories of the two startups that have come to personify “disruption” of the bro-libertarian era of mobile commerce diverge.

Uber can see its future. It knows that somewhere on the horizon-- five years? Ten years?-- it’s going to get body slammed with a major inflection point of self-driving cars. At one stroke, it will “solve” the problem of all those protesting, expensive, annoyingly human drivers. And that’s good because that continues to be one of Uber’s biggest problems.

Just this morning, I was reading about Uber drivers in Kenya, beginning to experience what Uber drivers the world over experience:

Uber is encountering some bumps in Nairobi, one of its biggest markets in Africa...

Protesters in Nairobi waved picket signs with critical statements including, “we should not be Uber slaves in our country.” … Uber announced a 35% fare reduction last week in hopes of boosting demand. Uber, which is in now in 10 sub-Saharan markets, has been facing more competition from local and outside taxi hailing apps across the continent….

...Take note: anti-Uber driver sentiment is officially a global phenomenon.  Uber’s using the same tactics: fare cuts resulting in driver pay cuts – and drivers halfway around the globe are reacting in the same way they do here in the United States.  Unwittingly, Uber is creating a global army of drivers, who each have the ear of their customers in the privacy of their own car.  It’s difficult to imagine a more combustible situation for a company whose primary asset is the value of its brand.

The problem is, Uber’s only real asset is its network of drivers. Because not only does Uber see the inflection point coming that will render its entire business eventually obsolete, it sees the potential competition. They aren’t scrappy startups. They are larger, deeper pocketed companies with far more assets in the fight than Uber has now. Google has a massive head start on self driving cars; Apple and Tesla have better consumer brands. Apple and Google control the devices by which people hail cars and the mapping technology. And with potential features like the one that allows you to summon your Tesla like the batmobile, Tesla even has that baller image that Uber once aspired to.

Amnon Shashua, CEO of self-driving technology company Mobileye, was asked in his last earnings call if he was planning on selling his technology to Uber or Lyft in addition to car makers like Tesla and GM. He was blunt in his response:

No, we are not involved in discussions with shared mobility companies, because we believe that asymptotically most of the car manufacturers would become mobility companies. So there will be nothing special about Lyft and Uber and Gett in the longer term. Our focus is in the car industry.

Also of note: Apple, Tesla, and Google aren’t widely hated. Toyota has been experiencing severe backlash in Japan from its partnership with Uber. From Bloomberg:

The taxi federation criticized Toyota’s investment in Uber during its annual meeting in June, Bloomberg News reported last month. President Akio Toyoda met with and tried to reassure the federation’s chairman that the tie-up won’t affect Japan. Masataka Tomita, the chairman, had said Toyota was “sending supplies to our enemy.”

If you are going to build an empire based on pissing off the world, you better make sure you don’t need to partner with anyone once your own business gets disrupted.

Now let’s compare that fate to Airbnb.

There may be an inflection point coming, but no one sees it right now. Airbnb gambles that its growth could just slow before an IPO-- similar to what I’ve argued Pinterest could be experiencing-- but there doesn’t seem to be any major change coming in the industry that promises to make its existing business eventually obsolete. There are risks still with government crack downs on Airbnb. There are very real problems the company faces surrounding allegations of racism on the platform. And unlike Uber, you don’t use Airbnb several times a day. Acquiring new customers is more of a necessity to grow.

But ultimately, Airbnb has achieved one major thing Uber has not, despite Uber’s double-the-price valuation: Airbnb has created something more than a commodity product. There is no “Lyft” to Airbnb who can simply increase its spending and gain market share.

Chesky was wise to make Airbnb about trust early on, not just a platform. When it had its “meth head” moment, Airbnb went further than it needed to with a $1 million insurance guarantee to make sure people felt safe opening their homes on the site. That’s very different than how Uber has handled continuing serious allegations of failed background checks and assaults in its cars. Uber shrugs and says “Taxis are even worse.” (The company has never produced evidence to back this claim up, despite numerous requests.)

The nature of Airbnb’s product also benefits from a saner style of international expansion, because it benefits from a global network effect. Customers use Airbnb precisely to experience the world. On the other hand, ridesharing is mostly a local phenomenon. Uber’s lead in the US, does little for its adoption in China save the few million people who regularly travel back and forth between the two countries.

Airbnb’s “product” almost feels intangible compared to a hotel chain, because you always get a different product each time you use the site and that’s part of the fun of it. Whereas all ridesharing platforms have nearly identical apps, features, pricing and want each ride to be uneventful, largely the same as every other ride you’ve taken.

The less distinctive, the more of a commodity a ride is, the better. The more unique an Airbnb experience is, the better. Non-commodity businesses are always more defensible in the long run. The commodity nature of Uber’s business has created real problems. One of the reasons Uber has such a black eye with drivers, for instance, is that it keeps cutting fares as it cuts prices to distinguish itself from identical players the world over. It’s the reason Uber’s burn rate is so high. Airbnb doesn’t face that pressure.   

It’s a risk for Airbnb to push off its IPO further, because growth could always slow. An inflection point may be on the horizon we don’t see.

But it’s also possible that when the dust settles around transportation in the next five to ten years, it’s Airbnb, not Uber, that was ultimately the largest company to come out of this era.