This week, Uber announced a partnership with Expedia (parent company of Vrbo) that will bring 1 million+ Vrbo vacation rentals into the Uber app later this year.
Will people actually book a vacation rental on Uber? That's the real question. But let's break down why this deal exists in the first place:
The backstory
Uber's CEO, Dara Khosrowshahi, was Expedia's CEO for 12 years. From 2005 to 2017, he took Expedia from a $2 billion company to a $22 billion company. Then he left to run Uber, but stayed on Expedia's board.
Fast forward to last week. At Uber's annual product event, Dara's team unveiled a deal that gives Uber access to Expedia's entire hotel and vacation rental inventory. In return, Expedia gets distribution to over 200 million monthly active Uber users.
The economics make it obvious why Uber wants in. An $800 vacation rental booking generates roughly $120 in commission for the platform. A $20 Uber ride generates about $4. That single vacation rental booking is 30x more valuable than a single ride. And with vacation rentals, Expedia's the one handling all the fulfillment and customer service.
The "everything app" race
Both Uber and Airbnb are trying to become the first real "everything app" for travel. And they're expanding directly into each other's territory.
Airbnb's moves: In the past few months, Airbnb launched a private car service in 125+ cities, added hotels to its platform, said the company is "absolutely thinking about" adding flights, partnered with Instacart for grocery delivery, and just this week expanded its Delta partnership to award 3x SkyMiles on Experiences and Services spending.
Uber's moves: They already have rides, food delivery, and grocery figured out. The Vrbo deal gives Uber a vacation rental channel that directly competes with Airbnb's inventory, without needing Airbnb's participation.
So who's best positioned?
Here's my take: I actually think Uber has the edge here. And I know that booking a vacation rental in the Uber app seems a little crazy.
The obvious pushback is that ordering a $15 burrito and booking an $800 vacation rental are fundamentally different decisions. One takes 30 seconds. The other takes research, comparing options, checking calendars. That's a fair point, and it's an open question if Uber will be able to bridge that gap.
But what Uber has going for it is something that's really hard to build from scratch: 200 million people who already open the app daily. Between rides and food delivery, Uber's power users are inside the app multiple times a day, dozens of times a month. Even Airbnb's most frequent travelers are booking maybe once or twice a month.
Think about where your thumb naturally goes on your phone screen. For most people, it goes to Uber more often than it goes to Airbnb. That muscle memory matters when you're trying to become the all-in-one place people go for anything travel-related, from booking your vacation rental to ordering your airport ride to getting meals delivered.
But here's the bigger thing. Uber has already proven it can execute on expanding beyond its core product. They went from rides to food delivery to grocery delivery, and each one works. I haven't seen that same proof from Airbnb yet. Their Experiences and Services rollout had a lot of publicity, but we haven't heard any proof from the Airbnb team that it's actually producing meaningful revenue. If those results were really strong, dont you think we'd know by now?
It's going to take a very talented team at Uber to make vacation rental bookings feel natural inside a ride-hailing app. That's not a given. But if any team is positioned to pull it off, I think it's the one that already proved they could turn a taxi app into a food delivery giant.
What this means for hosts
If Uber starts driving meaningful traffic to Vrbo listings, that's another distribution channel working in your favor, but only if you're listed there.
I've been saying this for a while: the hosts with the most risk are the ones relying on a single platform for 100% of their traffic. According to AirDNA, 48% of vacation rental listings are still single-channel. Whether it's AI partnerships steering guests to specific platforms or Uber putting Vrbo in front of 200 million users, the pattern is the same. You want all roads leading back to your property.
