Sharing economy pioneer Collaborate Corporation (ASX: CL8) has secured an affiliate deal with Airbnb, an “accommodation marketplace” offering access to millions of potential abodes in almost 200 countries around the world.
Airbnb’s service has become widely popular due to its collaborative characteristics allowing people to lease out surplus accommodation to other users looking for a place to stay.
It offers customers the chance to stay in a variety of accommodation options including apartments, houses, villas, and even exotic stay options such as castles and treehouses.
Collaborate has said its DriveMyCar business unit has entered into an affiliate program agreement with Airbnb “based on pay-for-performance” with the announced agreement including a “host growth affiliate program” for partners who promote hosting on its platform.
The deal with Airbnb is potentially a key move that could further extend Collaborate’s strong performance in recent times. At the end of last year, rental transaction value rose 62% to reach almost A$814,000 per year and Collaborate concluded the past financial year by recording a 21% increase in customer receipts.
The Australian fintech company intends to leverage visible synergies that exist amongst consumer spending habits relating to hiring (or leasing) cars and property.
First and foremost, its business model is focused on commercialising what’s known as the “sharing economy” – a modern concept defined as peer-to-peer (P2P) based activity of acquiring, providing or sharing access to goods and services via online methods.
Collaborate’ DriveMyCar business is further supplemented by sister brands MyCaravan and Mobilise with the company saying that their “exceptional” debuts prove that P2P business models can offer significant advantages over the status-quo – companies stocking large inventories of widely-used, but expensive, goods such as cars and caravans (and accommodation).
According to the terms of today’s deal, DriveMyCar customers will be offered “incentives” to list their properties on Airbnb and then paid referral fees when eligible properties are booked – although the exact nature of the incentives is yet to be confirmed.
“We are pleased to be working with Airbnb to extend the affiliate program offer to customers of DriveMyCar and enable them to enjoy the benefits of sharing their cars and properties,” said Mr Chris Noone, CEO of Collaborate.
The economics of P2P sharing
As part of its bid to inform the public and to demonstrate the potential behind P2P business models, the company has provided a step-by-step guide to how renting a car in the sharing economy looks like in practice.
- Upload details and photographs of the car available to rent.
- Receive and accept booking requests. Arrange a handover time and location with the Renter.
- Complete an inspection report and take photographs to confirm the condition of the car at the beginning of the rental.
- Receive regular payments from DriveMyCar.
- Arrange return with the Renter and complete an inspection report.
- Search for suitable cars nearby and make a booking request.
- DriveMyCar verifies your identity and performs a credit check.
- Make initial payment including a bond via credit card. Rental fees include collision damage cover and 24/7 roadside assistance.
- Arrange a handover time and location with the Owner.
- Return the car to the Owner at the conclusion of the rental period.
DriveMyCar is one of the first commercial entities to be accepted into Airbnb’s coverage network in Australia which could potentially generate a strong reception once made available to users.
Being affiliated with Airbnb is likely to provide validation and trustworthiness to the DriveMyCar brand, with potential cross-selling opportunities already being eyed by the brand’s management team.
According to Collaborate, its DriveMyCar customers and vehicle owners list their cars for rent while they are travelling which incentivises users to also list their properties with Airbnb, to generate additional income.
The affiliate deal with Airbnb helped Collaborate shares to reach $0.023 by midday trade, up around 35% currently trading close to highs last seen in March this year.