How to end-run economic control-freaks

Uber is having a hard time getting a foothold in China:  the regulators keep raiding its offices there.  AirBNB has a different strategy, which takes advantage of its ability to woo Chinese customers first in their incarnation as travelers to other countries.  The idea is to get them used to the idea of an unregulated net-based vacation-lodging service during one of their 109 million trips abroad every year, then count on them to put pressure on the regulators at home to allow a similar service domestically.  As the article notes, China can't raid AirBNB's offices in California.


Grim said...

I suppose the same strategy would work for anyone, but eventually you have to shift into China if your advertising dollars aren't to have been wasted. You could run that service out of California if you're AirBNB -- I don't guess they need people on the ground in easily-identifiable and formally-registered offices -- but Uber's going to have a harder time managing.

Still, China has a lot to teach both services about black markets. They're not exactly new to the idea of circumventing oppressive government regulation!

E Hines said...

China can't raid AirBNB's offices in California.

The PRC has been for some time. It's necessary to read past the paranoia in the book, but you might want to peruse Pillsbury's The Hundred-Year Marathon.

Eric Hines