Zumper's strange business model and how it works

Zumper, a rental listing platform, started its current, brazen business strategy in 2017. This strategy had the company directly compete with the agents using their platform, as well as develop relationships with landlords. As Zumper, which has been supported by venture-capital, introduced new restrictions on outside agents, the number of listings on the platform has seen a decline of about a half of its listing inventory a year ago.

Zumper said the reduction in listings is by design — it has been culling open listing inventory in order to improve overall listing quality. The San Francisco-based company — with nearly $78 million in seed funding from players like Blackstone Group, Andreessen Horowitz and Kleiner Perkins — still allows exclusive listings on its platform for free, but has restricted agents who have listings without an exclusive relationship with the landlord.

Last May, when Zumper still allowed agents to post non-exclusives, there were 38,000 rental listings on the website. Zumper now has about 19,000 rental listings in New York, still above 5,000 more than market leader StreetEasy.

One agent who previously used the platform for open listings, for example, received notice of a canceled and refunded subscription and could no longer post listings.

Data quality concerns are hardly unique to Zumper — and have long been a complaint among agents. Zillow Group’s StreetEasy, when it rolled out a fee for rental listings, argued that it helped weed out inaccurate listings. The Real Estate Board of New York has also been criticized for data issues with its syndicated RLS, though agents recently explained that the cleanliness of the data is improving.

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