Houses are just too expensive. In some places in the world it is so expensive to purchase or even to rent a house that even people with good jobs are facing issues. What could be a solution? Scientist from RMIT University in Australia says that Uber may hold key to housing affordability. But how?
Uber, as you probably know, is a popular car sharing service, essentially replacing taxi in many cities in the world. Anyone with a decently new car can become Uber driver – the basic idea is similar to AirBNB service, which allows you to house strangers in your place for a fee. How this idea of economy of sharing can solve the on-going crisis of booming housing prices?
Dr Andrea Sharam, researcher from RMIT, says that the key is disruptive actions in the housing market. Similarly to what Uber did to taxi market design. Essentially, Uber and AirBNB work so well because thei match supply and demand extremely efficiently. If there is not enough passengers who wish to commute using Uber services, drivers will quickly relocate or even step out of the game. Supply is never much greater than demand, but is big enough to keep the prices low. The principle is called “two-sided matching markets”.
Private rental and apartment development are not efficient markets – far from it. This is one of the reasons why it is so expensive to purchase or to rent a place to live. Dr Andrea Sharam says that putting consumer back in charge changes everything and would provide a possibility to reduce the cost of ownership. She explained: “Putting housing consumers in control rather than investors and developers will change our cities for the better. Affordable housing is central to our wellbeing and for access to opportunities”.
Home is where we feel the most safe and secure. Currently housing is just getting ridiculously expensive, but there is no other option than just conform to these trends and purchase one anyway. Putting consumer first and improving supply and demand matching could potentially change the course of this bubble. And that is what housing and private rental markets could learn from Uber experience.
Source: RMIT University