Question

what economic principles were used in the business of airbnb?

Answer 1

Basically airbnb is a part of a global company whose aim is to create a sharing economy. It may be making money by giving any room for rent. It spread across 191 counties and 4 million listings are there. Airbnb users are developing day by day. As on 2016, airbnb had been used by around 30.4 million people. Estimation is made that the number of airbnb users will be 60.8 million in the year 2021. 76% of the total listings made in airbnb are covered in a section which is outside of hotel department. Sharing economy is mostly available in the IT Hub of US, silicon valley based companies that uses services of internet tremendously.

These firms may also called as internet based service firms in order to take up more innovation to each and every portion of economy and improved good quality products and services, these firms normally make use of advanced use of technology. This is very useful to the medium level families of US to make income. Due to all these reasons, to make a control over these firms is not so easy.  

The utmost venture of the internet based service firms are Airbnb, the rental business. Airbnb was started in the year 2008, first in San-francisco. Through the website of airbnb, rooms or home stays can be booked online by anyone. It is a really a pleasure to those tourists who require very lower cost. Home makers can make money and increase their income level with the help of airbnb.

The main advantage of airbnb is that the owners of the rented house may separate the potential streams of revenue which they could earn from home itself. Transaction costs chargeable by the owner consists of screening and advertising cost. Expanded supply of rents belonging to short term is another advantage of airbnb. At last the major benefit of airbnb is the resultant extra economical activity. As airbnb services increases, number of tourists also increases.