"Uber for Parking."

This was the billion dollar idea I came up with when I first started to learn about tech and startups.

Think about it. All of the driveways that go unused while people are at work. Millions (if not billions) of square feet of parking space that goes unused, while most people have trouble finding parking within walking distance of downtown. (I came up with this idea while in my hometown, which was large but still had suburb-y neighborhoods around the downtown area. So, you could park in someone's driveway and walk to the movies or park. Not like Austin or New York)

This was the perfect sharing economy business idea. Your average american could rent out his driveway between 8 am and 9pm (while he is at work, not using his driveway) and make $2-$8 an hour. Look at all of this unused value that is now being used, it's amazing.

If only the world thought like econ MAs and PHDs.

I soon realized that the proposal wasn't as good as I thought after talking to some homeowners near downtown. The response was overwhelmingly negative. I wasn't trying to sell anything, I simply wanted to bounce ideas off of them (these weren't random people, they were parents of friends and family friends).

What I learned was there was more work and costs that went into renting out your driveway then I originally thought. You essentially had two issues:

1. Most people feel very uncomfortable about letting strangers park in their driveway. (My friends mom actually asked "What if they kidnap children from my driveway?" Yeah, that would be an issue)

2. "How do I make sure that my spot is open for the second or third 'parker' of the day?" Uhhh... you make sure that once a "parker's" time is up, that he is out of your driveway. "He won't leave. What then?" You call a tow truck and/or the cops. "How do I do that while I'm at work?" Well, you leave work and ... oh.

The comfort problem was expected and I understood it; personally, I am very uncomfortable lending things to friends, let alone to a stranger. I imagined AirBnB ran into this same issue, but they were still successful, so I didn't worry about this issue too much outside of finding a way to prevent child diddlers from causing problems.

But a serious logistical problem?!

("[We love logistics]"(https://www.youtube.com/watch?v=VCh6HnXHKRc) played in my head. Oh, how I love logistics.)

Uber and AirBnB must have to run into the similar problems. How does Uber ensure that a car is available? How does AirBnB ensure that a house is empty and available for a customer?

In my attempt to solve this problem, I became disheartened with the idea of 'sharing' economy. Because the answer is simple:

Stop using the 'sharing' economy business model.

"But... but TechCrunch and that one economist guy said they were sharing economy?

Yeah, well they're wrong.

Uber was the first company I looked to solve my problem, because... you know... they were valued at $20 Billion when I looked in June/July of 2014 (now $62.5 Billion). And what I found was a little disturbing;

Never once did Uber consider itself a ride sourcing app.

(before UberPool, but I bet you didn't know about that)

uhhh...

Yup.

It makes sense once you think about it.

I mean imagine what an Uber experience would be like if it was truly ride sharing. You get into a car with 3 other people, from two bars, to go back to the same apartment complex. The driver may or may not have been out getting groceries. (True sharing economy, I think, would be monetizing the 'wasted' empty space in the car during the ride by transporting people)

Not only is it uncomfortable to be in car with all those drunk people, but that model requires a lot of coincidences. Like, how often is someone able to pick someone up from the bar, on the way back from grocery shopping? Not often enough to make money.

Essentially Uber solved the sharing logistic problems by providing a product, rather than simply providing a platform.

Now, AirBnB is a different story.

They are actually a sharing economy platform. AirBnB is simply a platform for short term renters to meet up with people looking to rent out rooms and houses short term. Unlike Uber, they do not offer a service or product themselves.

So, how do they deal with their logistics?

The owner of the house/room deals with making sure that the house is available and clean for the next renter.

Well, that is what I wanted for the parking app; people would essentially deal with providing the parking space and I simply played match maker.

So, what was different between AirBnB and my idea?

Scale

My idea had driveway owners working and providing for $2-$8 an hour. On a good day I envisioned a driveway having three customers totaling 6 hours. So, at best a person would make $48 dollars in a day. So, two good days would be 6 'parkers' and $96.

AirBnB typically has rooms that is rented out at $50-$150 a night. I suspect most customers rent for 2 nights. So, two typical days you have one customer for between $100 and $300.

Yeah, scale.

The money that someone makes renting out their home/room warrants the owner to deal with those logistics. Renting out your driveway did not.

And then I found hard proof—my parking idea was already being implemented.

At this point in my research I found ParkingPanda. And sure enough after browsing through some cities most of the offered parking is hotels, airports, and commercial garages. I guess that's how I solve the logistics problems.

After all of this I learned one important thing:

The 'Sharing' economy itself is not a value add

It is simply another platform/business model to provide a product. This is where the startup world and young entrepreneurs fall into a trap. If you are 'Uber for X', it is not the Uber part that makes you valuable—it's the X part that makes you valuable.

Why is Uber such a high valued company? Because they are providing the best taxi service available right now. Not because they are ride sharing.

Why is AirBnB successful? Short term renting that rivals hotels is a valuable service. So valuable, that AirBnB can make their money by simply playing the facilitator.

Now, watch Rachel Botsman's talk TEDxSydney talk from 2010, then look up all the businesses that she cites; most are either radically different than they were back then or are out of business. I mean even if I am only going to use a power drill for 13 minutes, it is still easier to buy one (like, a good drill is $30 from Lowes) than dealing with renting it from strangers.

The glut of sharing economy startup's is evidence that people are not thinking about the product first.

The product is the most important part of any business.