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Question

Will "Rentberry" auction-style apartment rental model succeed?

Industry "disruption" is a Silicon Valley buzzword. Companies like Netflix and Uber have upended (or just plain ended, in the case of movie rentals) entire industries. Such disruption rarely comes without pushback or controversy, however.

Rentberry is an auction-style market for rental properties. Users submit bids of the price they're willing to pay for monthly rent and security deposit, and landlords decide which bid to accept. The company started in the San Francis area, where median rents for a one-bedroom apartment can top $3,600 per month. Although Rentberry claims that users pay around 4% less for apartments by using the app, an auction framework in a tight market tends toward driving prices up.

Rentberry's business mode drawn some level of ire from various directions. Journalists covering the business have expressed distaste at the prospect of bidding wars and the demise of a semblance of affordable housing in hot urban markets.

Beyond the gut reaction, however, Rentberry may be violating federal law. The Fair Housing Act is designed to prevent housing discrimination for protected classes. Landlords' choice of which bid to accept could result in allegations of discrimination.

As happened with Uber and Airbnb, cities could act to bar or curtail Rentberry in their cities, cutting off access to the priciest and most lucrative pool of apartments.

Other factors could also spell Rentberry's demise, such as a change in market conditions. The company makes money off of a $25 "success fee," so a marked downturn in rental applications could hurt the revenue stream. Alternatively, runaway success could lead to Rentberry's buyout.

With all of these possibilities in mind: Will Rentberry still be in successful operation with its current business model in 2019?

This question will resolve as positive if the current model of auction-style bidding for apartment is still the operating mode of Rentberry, and that Rentberry is still an operating company, on December 31, 2018. If Rentberry is bought out but still operating under the "Rentberry" brand and under the same business model, this will also count as a positive resolution, but if bought out and subsumed into some significantly different effort resolution will be negative.

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