'Invisible infrastructure' may already be cutting costs for things like the World Cup or the Olympic Games—not to mention natural disasters.
Corporations are people, too, the ol' Supreme Court saying goes. But in fact it's people who are the businesses these days, according to Brian Chesky, the founder and CEO of Airbnb, that platform that lets people be hotels.
"You used to have a world with people and businesses," he said Monday, during a panel at The Atlantic's CityLab 2014 summit. In the old world, people turned to businesses for market exchanges, brands they could trust. "You wouldn't trust a hitchhiker. You can't trust a person you see on the street."
If that's true for everyday interactions, it goes double for events that bring strangers from all over the world to a city. That's changing, Chesky said, during a discussion moderated by The Atlantic's editor-in-chief, James Bennet. More than one-fifth of the tourists who came to cities such as Rio de Janeiro, Brasília, and São Paulo for the World Cup this year stayed in dwellings rented through Airbnb.
"During the World Cup, we'll be full of foreigners—Americans, Colombians, a Chinese couple, Austrians, some from Bosnia," one Airbnb host told the Los Angeles Times in the run-up to the tournament. Even the world-famous Brazilian soccer star Ronaldinho listed his place on Airbnb (for $15,000 per day).
Brazil never quite built the hotels that the World Cup required, which certainly helps to explain why so many fans turned to Airbnb instead (some 120,000 out of 600,000 foreign tourists, according to Chesky). Another panelist said that this perhaps unexpected outcome means that we ought to rethink whether Brazil needed to build those hotels in the first place.
Cities can invest in "invisible infrastructure," said Arun Sundararajan, professor of information sciences at New York University, "without having to spend on steel and concrete."
Brazil plans to build more than 400 hotels between now and 2016, when it plays host to another mega-event, the Summer Olympic Games. Rio alone means to build 75 hotels for the Olympics. But given Brazil's own experience this year, and the rising criticism that cities face for even thinking about hosting the Games or the World Cup, leaders need to evaluate what role the sharing economy should play for cities planning mega-events.
Chesky provided another example of this so-called invisible infrastructure. In New York, he said, one Airbnb user wanted to open her home to people for free, an option that that the service didn't accommodate at that time. So Airbnb changed the system, and at the same time, introduced a disaster-response service for cities that experience natural disasters. The sharing economy can be useful for the mega-events that cities can plan for, as well as the ones for which they can't.
"We had to hack our own system," Chesky said. Now, as a result, "within 30 minutes, if there's a disaster, [Airbnb users] can open their homes."
The Atlantic, the Aspen Institute, and Bloomberg Philanthropies are hosting "CityLab 2014: Urban Solutions to Global Challenges," in Los Angeles on September 29 & 30. Find CityLab.com's full coverage here.