Airbnb, Etsy, Uber: Growing from One Thousand

to One Million Customers

Contemporary Cases in Global Marketing

Group Assignment

Lorenzo Peccini, Charles Mosca, Lily Berry, Jenna Thome, Gloria Pons
INDEX

Introduction................................................................................................................................ 3
Symptoms...................................................................................................................................3
Key Problems............................................................................................................................. 4
Solutions.....................................................................................................................................5
Feedback and Reviews...................................................................................................................... 5
Reward System.................................................................................................................................. 5
Managing and Preventing Problems..................................................................................................7
Conclusion..................................................................................................................................8
Bibliography...............................................................................................................................9

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 Introduction

In the modern age of society, the two-sided online marketplace has become the epitome of
consumerism. These platforms shook traditional industries with their explosive growth and
swift revolution of the transactional industry. Of these renoud platforms, Airbnb (short-term
rentals), Etsy (handcrafted goods) and Uber (Ridesharing) pose as the most influential
players, with their fair share of disruption and controversy in markets around the world.
Aimed at empowering buyers and sellers alike, all entities achieved the impressive feat of
reaching one million customers from their niche one thousand. Though the summit to one
million customers was achieved in a remarkably short time frame, all three brands have faced
their share of challenges. Symptoms like declining profits and relative growth patterns
stemming from key problems in their marketing and value propositions leading to the
deduction of relative recommendations and solutions presented in this report.

Symptoms

Throughout their expansion stages, Airbnb, Etsy, and Uber encountered various symptomatic
difficulties. User trust has been undermined and platform dependability questioned as a result
of negative media exposure, which frequently results from situations like property damage,
safety issues, or regulatory problems. The examination revealed fundamental problems with
safety, trust, and compliance, requiring preventive actions to preserve user confidence.

Numerous channels, such as social media and review sites, saw the emergence of user
complaints that exposed flaws in customer service procedures and channels of
communication. Inadequate assistance, unsolved problems, and slow response times pointed
to areas that needed to be improved in order to increase user loyalty and happiness.

Intense regulatory inspection indicated tensions between established regulatory frameworks

and new digital platforms, with Uber being singled out for special attention because of its
disruptive transportation model. Handling complex laws and regulations required proactive
interaction with legislators to guarantee adherence and reduce legal hazards.

In other areas or segments, stagnant or declining growth suggested market saturation and
heightened rivalry. Due to intense rivalry from both long-standing competitors and recent

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newcomers, the platforms faced difficulties as they grew in terms of differentiation and
growth momentum.

To maintain long-term growth and competitive advantage, it was imperative to address these
symptomatic issues. To mitigate risks and sustain performance in volatile market contexts,
proactive steps were crucial. These included strengthening safety and trust protocols, refining
customer service procedures, interacting with regulatory bodies, and developing fresh
strategies to penetrate untapped markets.

Key Problems

When we examine the success stories of AirBnb, Etsy, and Uber, we find several key
problems that connect to a set of symptoms. But, the challenges that these companies faced
were a key factor in their future success.

One key problem that manifested across all three platforms was the need to establish trust and
safety in their respective industries. Most explicitly in the case of Uber, users struggled to feel
comfortable with the passenger and driver security, especially in the case of late-night rides
and sketchy neighbourhoods. Instances of driver misconducts, safety breaches, and reckless
driving all damage user confidence, which leads to negative media coverage and scrutiny.
Airbnb’s trust problem manifested much differently, in concerns about the quality of listings
and safety of accommodations, which directly affected their customer retention. The website
had poor-quality photos and a reputation of property damage or theft. Etsy, similar to Airbnb,
faced challenges in ensuring the quality and authenticity of their products. Handmade and
vintage items can be touch-and-go in terms of quality to begin with, but the prolific amount
of counterfeit items and misleading product descriptions raised massive red flags in the eyes
of the consumers. After all, unhappy customer = problem to be uncovered.

Because of this, all three platforms struggled with scalability challenges as they transitioned
from focusing on a niche market to catering to a far broader audience. Airbnb’s reliance on
manual listing verification and bad photography was limiting its ability to urbanize, and
Etsy’s push for too much seller empowerment led to issues and inconsistencies in product
quality and poor customer service. Uber’s city-by-city expansion strategy was inefficient and

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posed massive scalability issues in terms of operational efficiency, resource allocation, and a
nightmare of challenges in relation to local regulations and laws.

Overall, the key problems that Airbnb, Etsy, and Uber faced stemmed from the need to
establish customer trust, ensure safety and quality, and scale effectively while managing the
symptoms of negative user experiences and declining trust.

Solutions

After clearly identifying the main problems faced by all three companies, we propose
different solutions that they can implement. Our objective with these solutions is to reward
high customer service, quality and expectations, but also ensure that those who do not meet
required standards are monitored and eventually punished. We aim to provide solutions that
will build customer trust, ensure safety and quality, and effectively manage problems.

Feedback and Reviews

Firstly, it is important to note that the most effective solution that ensures that Uber drivers,
Etsy sellers and Airbnb hosters all provide a high standard service, is through allowing
customers to provide feedbacks and reviews. This system is by far the best as customers trust
other customers. Through hearing opinions of other customers, customers will trust the
service provided. Additionally, it also incentives sellers to provide a higher quality of service
as they know it attracts customers. Airbnb, Uber and Etsy already have a good system when it
comes to this, especially Airbnb and Etsy as you can see ratings for specific categories. Uber
could improve in this as well and ask customers to give a rating for different categories, such
as “driving safety” and “driver’s behaviour”, allowing both customers and Uber to identify
specific positives and negatives.

Reward System

As part of a proactive approach to encouraging positive behavior and increasing user

engagement, implementing a rewards system is a relevant strategy for platforms such as
Uber, Airbnb and Etsy. This rewards system could be designed to recognize and value
exemplary users who contribute to maintaining high standards of quality, safety and customer

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satisfaction within the community. The idea would be of rewarding the seller and service
provide with points. They can accumulate points over time and eventually redeem rewards of
their choice, similarly to airline loyalty points. The rewards received would change for each
platform but the approach would be the same.

Take the example of Uber: drivers who stand out for their safe driving, courtesy and
impeccable service could be awarded points. These awards would not only serve as
recognition for their commitment to safety and passenger satisfaction, but would also
encourage other drivers to follow their lead, thereby contributing to the overall improvement
of the user experience. Alternatively, Uber could also reward drivers that consistently receive
high ratings with a higher salary, like a bonus.

Similarly, on Airbnb, hosts who provide quality service and keep their listings clean, safe and
as advertised could be rewarded points that can then be used to redeem benefits, such as
discounts on service fees, increased visibility of their listings or even exclusive partnership
opportunities with the platform. These financial and promotional incentives would
incentivize hosts to maintain high standards and deliver memorable experiences to their
guests, thereby building user trust and loyalty towards the platform.

Likewise, on Etsy, sellers who stand out for the quality of their products, their exemplary
customer service and their adherence to ethical and legal standards could use their earned
points to benefit from rewards such as discounts on transaction fees, targeted promotions or
even opportunities to showcase their products on the platform. By promoting and rewarding
sellers who embody the values of quality, authenticity and transparency that Etsy advocates,
the platform would strengthen its attractiveness among buyers keen to support artisans and
creators engaged in an ethical and responsible approach.

Additionally, other forms of rewards can be in the form of coupons and vouchers. The
platforms can partner with other companies, such as supermarkets, restaurants and hotels to
provide discounts or free rewards to the sellers and service providers. The partnerships would
benefit both parties as the partnered companies would receive new clients.

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Managing and Preventing Problems

Moreover, platforms must not only incentives users to provide a high service, but must alos
ensure that problems are effectively managed and reduced. They need to find a way to
implement sanction measures to users who do not respect the established rules is essential.

For example, on Uber, drivers who violate driving or safety rules could be subject to
warnings, temporary suspensions or even permanent bans. Similarly, on Airbnb and Etsy,
hosts or sellers who fail to meet quality standards could face penalties such as removal of
their listings or restrictions on their accounts. These dissuasive measures aim to protect the
security and quality of the services offered, thus strengthening consumer confidence in the
platforms.

Finally, in order to strengthen user confidence, additional measures can be put in place to
guarantee quality and secure service on the platforms. For example, on Uber, automatic
activation of a dashcam when a driver accepts a ride could be considered. This dashcam
would record the journey and make it possible to check whether the driver respects the safety
and driving instructions established by the platform. This measure would not only increase
travel transparency and safety for passengers, but also deter drivers from taking unnecessary
risks, thereby causing incidents and bad experiences for consumers.

On Airbnb, a collaboration initiative between community members could be implemented to

strengthen user trust. For example, users might have the opportunity to become "verifiers" by
visiting and inspecting listings for other users who may receive compensation in the form of
points with rewards, similar to the “reward system” mentioned above. This assure travelers
that accommodations meet advertised quality and safety standards.

Regarding Etsy, additional measures could be taken to ensure the authenticity and quality of
the products offered on the platform. For example, the establishment of a certification or
verification system for artisans and sellers could be considered, ensuring that only products
made in an artisanal and authentic manner are offered for sale. This certification would
strengthen consumer confidence in the quality and authenticity of products on Etsy, while
providing additional recognition to artisans and sellers committed to ethical and transparent
practices.

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 Conclusion

Overall, as discussed, Airbnb, Uber and Etsy have all faced similar problems despite their
rapid growth and success. The elements of user trust and quality in marketplaces are key
components to the success of the platforms. Customers are aware that products and services
are provided by third parties and therefore are skeptical of making purchases. Consequently,
the element of trust in the platform is a key driver to the success and growth of the company.
The companies need to ensure they can sustain this trust and not break it.

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 Bibliography

- Drive | Uber Your City. (n.d.). Uber. https://www.uber.com/us/en/drive/uber-pro/

- Waghbakriwala, A., & Waghbakriwala, A. (2023, November 24). Uber introduces

new reward system for drivers to put a stop on cancellations. Equitypandit.

https://www.equitypandit.com/uber-introduces-new-reward-system-for-drivers-to-put-

a-stop-on-cancellations/

- Dobronte, A. (2023, October 3). How Startups like Airbnb Measure Customer

Satisfaction - CheckMarket. CheckMarket.

https://fr.checkmarket.com/blog/customer-satisfaction-startups/

- Chen, T., Samaranayake, P., Xiong-Ying, C., Meng, Q., & Lan, Y. (2022). The impact

of online reviews on consumers’ purchasing decisions: evidence from an

Eye-Tracking study. Frontiers in Psychology, 13.

https://doi.org/10.3389/fpsyg.2022.865702

- Crook, I. (2023, May 11). Customer Loyalty Programs - The Ultimate Guide +

examples for 2020. AppInstitute. https://appinstitute.com/customer-loyalty-programs/