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

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