Air BnB: The UBER of accommodation?

AirBnB logoIn the same way that the taxi industry has resisted the competition that Uber has introduced, so the accommodation industry is keeping a watchful eye on AirBnB which was officially launched in South Africa mid 2015.   Like Uber which does not own any vehicles but uses technology (an App) to link riders and drivers ,  AirBnB does not own any rooms itself but uses a  digital platform to link guests/travelers to hosts/accommodation providers in the form of a website where hosts list lodgings to rent. Unlike Uber however, which has very stringent regulations for drivers as well as requirements for type, age and condition of cars,  AirBnB does not regulate their establishments in any way.

AirBnB was founded in 2008 and the origin of its name says a lot about the underlying principle of the company in its early days – and one which still continues in some AirBnB lodgings.  Brian Chesky and Joe Gebbia created the initial concept for AirBed & Breakfast in 2007 when there was a total shortage of accommodation during a big international conference in San Francisco.   Chesky and Gebbia, who were battling to pay the rent for their loft apartment, converted their living room into a makeshift bed and breakfast, accommodating three guests on air mattresses and providing homemade breakfast.  This led to a website advertising alternative short-term accommodation initially targeting big events when standard accommodation was scarce (in much the same way that people opened their homes in Johannesburg during the Rugby World Cup and the Soccer World Cup – with varying degrees of success.)  AirBnB (its name was shortened in 2009) has now grown into a business with over a million and a half listings in countries worldwide.  AirBnB was launched in South Africa in July 2015 and currently has over 94,000 lodgings listed with over 1,000 of these in Johannesburg.   The site’s listings have expanded from air beds and shared spaces to private rooms in shared houses to entire homes and apartments.

AirBnb BathroomThe huge advantage of AirBnB is cost. I recently stayed in London in an AirBnB in Barons’ Court. At the price I was paying in London – both converting from pathetic rands and given its central location – it was comparatively ‘cheap’.  However, if compared to what Liz at Lancaster offers, it was of a completely different order.  It was a very humble basement digs which comprised a small bedroom, a small bathroom and a small kitchen rented from a young chap who was away in Europe for a while.  His girlfriend met me with the key to open up and she was so impressed that her boyfriend had made the bed with clean linen and left clean towels out!  And he had indeed done well in his effort to make it tenant-friendly (including a nice informative note about pubs, shops and tube station nearby).  There was another tenant in a room across the passage (a passage which also accommodated a washing machine). As there was very little sound-proofing  I became quite familiar with the alternating rhythm of his nocturnal activities ranging from high passion to vociferous fighting.   Although space had  been made for my possessions with a cleared drawer and a few hangers in his cupboard, there’s a limit to how much one can clear a small room of one’s life possessions.  So I was very definitely living in somebody else’s space and not a luxurious one at that!  However it worked for me – it was very central;  I could make myself a coffee and a light meal; there was internet access;  and it cost way less than a hotel or a guesthouse.  But I have been to London before, its familiar to me, is easy to get around and it’s a safe city so I didn’t really need any of the added services and facilities that a guesthouse offers.

While many Guesthouses and B&Bs (like Liz at Lancaster) have signed up with AirBnB, many establishments follow the original model of  owner/management living off-site (often not in the same town/city) and arrangement for access and communication of  ‘house rules’ being done ‘remotely’. Would I like to stay in this kind of AirBnB in Joburg?  I am not so sure.  Of course the huge advantage of an AirBnB is cost, as was the case with my stay in London.   No good guesthouse can compete on cost simply because of the service levels, facilities, infrastructure, value-added extras and compliance with regulations that a guesthouse offers.  And of course for this reason alone, AirBnB serves a very important niche market, particularly amongst the younger leisure market.

But I think guesthouses in Johannesburg will continue to serve a different market – the business traveler; the older traveler who wants a safe and secure environment, personal and professional service and excellent facilities; as well as those who want the combination of privacy while still having access to somebody who can provide local knowledge of a challenging city like Johannesburg (which as I said earlier, is not London).

L&F 7toiletries detailBecause guesthouses are regulated, they have to guarantee a safe and secure environment. Owners and managers are constantly around to provide advice on safety issues when travelling within Joburg  plus advice on what areas to avoid/frequent etc.  Because good guesthouses are accredited, it means that things like cleanliness and quality of facilities are carefully monitored.  Few AirBnBs would offer high quality bed-linen, top-of-the range hospitality mattresses, on-the-house individual toiletries, full daily service ensuring spotless cleanliness, laundry facilities, all guests being guaranteed privacy with their own dedicated facilities, constant on-site service, grass roots ‘concierge’ advice and knowledge, etc.  In a fast-paced city like Johannesburg unless a visitor has been before or has colleagues or friends in the city, it is really helpful to have somebody on hand for local information – from small details like ‘where do I get a local SIM card?’ or ‘How do I arrange a visit to Soweto?’ to bigger issues like ‘I’ve lost a crown on one of my teeth. Where can I find a good dentist?’ When I mentioned AirBnB to a regular guest from the States, he just shook his head and said he could never afford to take ‘pot-luck’ … and I guess that is what it boils down to.

And then there is the important issue of insurance.  Although there is apparently a scheme for hosts to insure their property against damage, because many AirBnB establishments are unregulated, very few carry either public liability insurance or insurance for guests for  loss of or damage to personal items. These are issues to bear in mind when travelling.

While many accredited established guesthouses have registered with AirBnB there will be many AirBnB offerings which will be unaccredited so there will be a range of standards in the offering.  It will be interesting to see how the accommodation landscape remodels itself going forward.

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Uber: a welcome addition to Joburg’s transport options

Johannesburg is notorious for being a city which is badly serviced by effective public transport.  While Rea Vaya is a cheap and extremely viable option for the inner city and certain main routes, because of Johannesburg’s huge sprawl, there is no door-to-door public transport for suburban areas.

You have to have a smartphone to download the Uber App

You have to have a smartphone to download the Uber App

This is where Uber entered the public transport arena some 4 years ago as a very convenient and workable cheap option. Worldwide Uber has stirred huge controversy,  loosely based on the impact it has had on existing taxi industries (because of the convenience and the much lower fares), and because, in South Africa, they do not comply with the legislation applied to the metered taxi industry ie they have not been granted the same operating licence which metered taxis are required to have.

Uber’s  argument is basically two-fold:

1) they are not a transport company but rather a technology company. Ie they own the  Uber App which links riders/consumers with drivers/transport providers.  They do not provide a transport service or employ drivers – they partner with independent operators.

2) Although it might not have the operating licence,  Uber does in fact adhere to all the requirements of the metered taxi industry:  all drivers have to have PDPs  (Professional Driving Permits); all vehicles have to have a commercial licence, be covered for public liability, and have passenger liability insurance as well as 3rd party insurance.

You can track driver's progress to pick-up location

You can track driver’s progress to pick-up location

In addition Uber argues that:

  1.   it has more stringent requirements around safety and accountability as compared to the traditional taxi industry. Not only does the rider receive the driver’s name, photograph, vehicle type and vehicle registration on the cell phone prior to pick-up, but the rider rates the driver after the ride so ensuring accountability.   Uber drivers also undergo a stringent criminal background check.
  2. it has strict requirements about model, year and mileage of all vehicles used to transport riders
  3. any metered taxi drivers can use Uber’s App to boost their incomes

All this is further complicated by differing provincial legislation: in the Western Cape drivers have to apply for a metered taxi licence in Johannesburg they have to apply for a hired limo licence.

All well and good and partially convincing – Uber has certainly made a difference to consumers and has provided a slick, cheap and safe alternative to metered taxi companies.  However,  Uber’s  argument of not being a transport company is not as clear-cut when one considers that many of the actual drivers do not own the vehicles but are sub-contracted by the vehicle owner . This means that Uber’s ‘operating partner’ might not be a driver at all but rather the owner of an entire fleet of vehicles.  Also Uber is directly involved in testing and training its operating partners in terms of city knowledge and professional conduct.  So the issue of providing the technology rather than a transport service becomes quite murky.

Uber has certainly created a great deal of employment  – over 2000 licensed vehicles by late 2015 with the intention of creating 15,000 more over the next 2 years.  And apparently in the first half of 2105 Uber clocked over 2 million booked trips.   However, it seems that drivers (as opposed to owner drivers) do not necessarily earn a good income.

The App also gives invoice showing detailed record of trip

The App also gives invoice showing detailed record of trip

Over the recent festive season I used Uber on various occasions and as always, I engaged the driver to get a sense of conditions of work, revenue, hours worked etc.  Of the 8 or so trips, only one driver was an owner-driver and all the others were sub-contracted.  Although one driver was paid on a salary basis, the others were all on a commission basis varying between 20 and 25% of the fare, with Uber taking 20% of the fare (for use of the App and their administrative and training role); the owner-driver earning the remaining 55/60%.    Bearing in mind that tipping is not customary practice; that 20 trips a day seems generally to be a very busy day; and one can work on a fare of R70 – R120 for a +/- 30 minute fare.  Again very general calculations this would come to around R400 odd per day for a top earning day, with some days being significantly less.  Of course the increased rates charged with Uber’s surge pricing policy (charging more during peak demand times) would up percentages earned.

Although based on very generalized figures, I still get the impression that Uber drivers are not earning a significant amount of money so it has made me rethink my practice of sticking to Uber’s no-tipping policy.

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A guide to the new immigration regulations

Nothing is anything  without an acronym so here’s to  Home Affairs’ EMCS …. aka Enhanced Movement Control System ie the new procedures & systems for  immigration.   While concessions to South Africa’s immigration regulations were approved by Cabinet, it will take time for the new regulations to filter down to embassies in foreign countries and to ports of entry. Liz at Lancaster has guests from India trying to get their visas plus others from Africa who have all had to put their travel plans on hold because of delays in visa applications.   Similarly immigration officials at South Africa’s airports have not yet begun implementing the changes as staff are still being trained in the capturing of biometric data.  Lanseria International Airport, OR Tambo International Airport, King Shaka International Airport and Cape Town International Airport have been selected to serve as pilot sites to conduct testing on the new functionality of capturing biometrics.  Officials at OR Tambo apparently began training on capturing biometric data on November 4 and while the pilot project was due to begin at Lanseria on November 2, when contacted by Tourism Update, officials at the airport weren’t aware if it had, in fact, begun.   The pilot project is also due to begin on November 12 at King Shaka International Airport and Cape Town International Airport.

The DHA intends to have biometric capability permanently enabled on all arrival and transit counters from November 25. However, during the initial period, only selected travellers will be biometrically captured until the system has proved to be stable.



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