Service Providers of the Sharing Economy: Who Joins and Who Benefits?

Abstract: Many "sharing economy" platforms, such as Uber and Airbnb, have become increasingly popular, providing consumers with more choices and suppliers a chance to make profit. They, however, have also brought about emerging issues regarding regulation, tax obligation, and impact on urban environment, and have generated heated debates from various interest groups. Empirical studies regarding these issues are limited, partly due to the unavailability of relevant data. Here we aim to understand service providers of the sharing economy, investigating who joins and who benefits, using the Airbnb market in the United States as a case study. We link more than 211 thousand Airbnb listings owned by 188 thousand hosts with demographic, socio-economic status (SES), housing, and tourism characteristics. We show that income and education are consistently the two most influential factors that are linked to the joining of Airbnb, regardless of the form of participation or year. Areas with lower median household income, or higher fraction of residents who have Bachelor's and higher degrees, tend to have more hosts. However, when considering the performance of listings, as measured by number of newly received reviews, we find that income has a positive effect for entire-home listings; listings located in areas with higher median household income tend to have more new reviews. Our findings demonstrate empirically that the disadvantage of SES-disadvantaged areas and the advantage of SES-advantaged areas may be present in the sharing economy.