Essay number 3 ( Sharing economy) Flashcards
What is the essay structure?
introduction:
- Define the sharing economy
- began to appear in the early 2000s
- 3 sectors well established
- example: Uber
- Main drivers of the sharing economy (technology, environment, social desire.
Body:
- define and explain what Ebay is
- arguments for: concept fits in with Sharing economy, it is a marketplace (2-sided), network effects, uses information technology, rating systems.)
- Arguments against: does not create actual jobs, use of own assets, greater scope of interaction, app based)
Conclusion: key points, sharing economy provides a more in depth and complex model compared to that of the marketplace, eBay model.
Define the sharing economy
an eco-system in which assets or services are shared between individuals, either free or for a fee, typically by means of the internet
What are the main drivers of the sharing economy?
- evolution of e-commerce (social networks and electronic markets)
- unused assets
- changing consumer behaviour
- market entry
- venture capital
- desire for community
What are the benefits of the sharing economy? (PRAISE)
- possible on a large scale
- reduction of transaction costs
- available data on people and things: physical assets picked apart
- intermediaries and providers can position themselves as platforms
consumer convenience, lower prices - sharing assets is cheaper/large scale
- environmental benefits: recycling and waste reduction
what does the sharing economy need to focus on in order to grow?
- invest in market leading reputational scoring system
- work with policy makers to develop new forms of self regulations
- reform existing regulations
- support users in understanding and actioning their legal and tax obligations
What are 6 strategies in succeeding in the sharing economy?
- sell the use not the ownership
- support the re-ownership of products by selling goods and services
- exploit unused resources and capacities
- provide repair and maintenance services
- target new customers
- develop entirely new business models
What are some of the ethical issues and challenges?
- legal and regulation issues
- represents unfair competition
- debate about what firms really are? digital platform or service provide
- trust issues
- employment issues and challenges
- tax implications of working in sharing economy
what three sectors is the sharing economy well established in?
- personal/commercial space
- transport (ride sharing)
- time and skills (services home)
what is the role of platforms (the firms)?
- aggregation (network effect) indirect
- matching: enabling filtered searches
- payment in an escrow style method (released after platform service provided)
- trust: checks (basic ID verification)
Who are the main service providers for the sharing economy?
- start ups: brings the innovation
- incumbents: well established companies
- B2C: due to trust issue between C2C, companies act as intermediaries
- C2C: single individuals/organisations take on both consumer and produce roles
What is the dark side of the sharing economy?
- parts of the market gain unfair advantages
- untruthful reviews online
- ride sharing exploit loop holes “skimming economy”
- micro-outsourcing, buyer power is greater than seller power, no money or salaries
- disrupted major industries
How can incumbents respond to the sharing economy? (traditional firms)
- demand level playing field
- offer service that they cant provide
- match SE innovations
- engage in PR battle
- improve product
- invest in SE and get on the same level
- check for violations of regulations
What are some of the responses to the sharing economy (from sector, the sharing economy) ?
- have an industry body formed
- trust and identity of government opened up
- insurance situations
- demands on being clear about business model and PR
- major regulatory dealings by key firms
How can the government support the sharing economy?
- innovation lab (incubators)
- Ensure trust for online transactions by launch both public and private systems
- update procurement frameworks
- create trade body
- reach new audiences
- create tax guide so people can know
- share government assets
What is eBay?
- multinational e-commerce corporation, facilitating online consumer-to-consumer and business-to-consumer sales
- Market place model
- founded in 1995 “dot com bubble”
- unlock a hidden value: marketplaces are driving utilization and using technology to unlock hidden value – the hidden value in unused inventory, empty rooms and shared transportation.
- environmental drivers: selling of unused assets reduces carbon use and environmental impacts
