Chapter 7: The Rise of the Sharing Economy

Question 1

What does the term sharing economy refer to?

Answer 1

• The term sharing economy refers to peer-to-peer based sharing of (access to) goods and services.
• It can take a variety of forms, including using information technology to provide individuals, corporations, non-profits and governments with information that enables the optimization of resources through redistribution, sharing and re-use of excess capacity in goods and services.

Question 2

Why does Belk (2014) refer to some business models, as e.g., car-sharing as “pseudo-sharing”?

Answer 2

Pseudo-sharing are paid business models of the sharing economy (e. g. car-sharing) that are more accurately short-tem rental activities.

Question 3

Please distinguish between the allocation mechanisms pure gift-giving, reciprocity, and market-exchange.

Answer 3

1. Pure gift-giving:
   - An object is transferred from one individual to another without the expectation of reciprocation.
2. Reciprocity
   - exchange of goods between people who are bound in non-market, non-hierarchical relationships with one another. The exchange does not create the relationship, but rather is part of the behavior that gives it content.
3. Market exchange
   - Exchange of goods at prices determined by the law of supply and demand. Its essence is a free and casual contract.

Question 4

How can you categorize business models of the sharing economy according to price mechanisms? Please use the examples of Couch-surfing and AirBnB.

Answer 4

Most of the business models of the sharing economy are something in between reciprocity and market exchange.

• > Couch-Surfing is free and relies on reciprocity. The idea is to mimic the close ties once formed through face-to-face exchanges in villages but at a larger scale.
• > AirBnB used market exchange. The idea is that some form of payment puts both parties on the best behavior and makes the whole process more reliable.

Question 5

In how far would you say that the sharing economy broadens the scope of existing mechanisms of exchanging value?

Answer 5

Usually businesses rely entirely on monetary exchange to transact with eachother.
The sharing economy opens the door for a wide variety of exchange mechanisms:
-Transfer of ownership vs. access over ownership
-paid vs. unpaid

Question 6

Discuss: Is the sharing economy merely a new way of renting, facilitated by the internet?

Answer 6

One argument in support of this argument is that sharing plattforms that relied on unpaid exchange failed in the past.
The most successful ones like Uber and AirBnB rely on market exchange mechanisms, which could be classified as nothing more than a rental business. Also this models avoid regulation of regular business models.
But there are also other business models e.g. the ones that do not rely on market exchange. They cannot be classified as common rental businesses.

Question 7

What is meant by a conflict of social and market norms? Could such a conflict of norms occur in the sharing economy? Which threatening development does Michael J. Sandel describe in his book “What money can’t buy – the moral limits of markets”?

Answer 7

The conflict of social and market norms means that there are “services/actions” that used to be provided by social norms of helping and sharing are now being monetized by business models of the sharing economy.

This development is referred to in Sandel’s book when he mentions “We have drifted from having a market economy to being a market society”. Almost everything is up for sale, market values reach into spheres of life previously governed by social norms and values.

Question 8

What do you think- could business models like AirBnB and Uber lead to an erosion of social norms of helping and sharing?

Answer 8

Sharing economy business models might make it possible to monetize on actions that would otherwise be provided through social norms but I think people still prefer to help out people they are close to or share with them even if they have the alternative to monetize on it.

Question 9

Which drivers of sharing are typically discussed?

Answer 9

1. Technological innovation (web 2.0)
2. Economic realities (economic crises)
3. Value shift (relationships)
4. Environmental pressures (sustainability)

Question 10

Which motives of participation in the sharing economy do Hamari et al. (2015) propose and test?

Answer 10

1. Sustainability
2. Enjoyment
3. Reputation
4. Economic benefits

Question 11

Which levels of implementation of the sharing economy can de differentiated? Please name one example for each level.

Answer 11

1. Building relationships for casual, spontaneous, and one-time transactions (e.g. borrowing tools)
2. Building agreements (regularly exchanging tools)
3. Building organizations (tool lending libraries)
4. Building larger-scale infrastructure (community wide car-sharing or bike-sharing)

Question 12

Which mechanisms are used to ensure trust and accountability in the sharing economy?

Answer 12

Digital Reputation

-> ratings, reviews, etc…

Question 13

Please name three arguments for and three arguments against business models like AirBnB and Uber.

Answer 13

Pros:

• More efficient use of resources
• cheaper price for customers
• freedom, empowerment and enjoyment
• trust-enhancing effects
• improved services
• increased economic activity/entrepreneurship

Cons:

• destroying existing business models
• unfair competition (regulation rules do not apply, safety, hygene, licensing, fees, insurance,…)
• endangering equal access to living space and mobility
• safety risks due to lack of insurance
• undermining employment laws
• benefiting from tax loopholes