Marketplaces and the sharing economy Flashcards
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 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 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 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
in what areas is there growth potential?
- fashion
- food
- personal items (power tools)
how do you look at the sharing economy from a framework perspective?
- strategic layer: through B2C or C2C, lines are blurred between buyer and seller.
- process layer:
for providers: “service as a life cycle”
for intermediaries: transportation, transactional infrastructure and regulation
for consumer: transaction in the form of payments. - System layer
What are some of the ethical issues and challenges? ( i got a lot of issues)
- 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 is the view of the sharing economy from macroeconomic perspective?
- the sharing economy follows a hybrid combined market model
1. traditional market model
2. gift giving (good donated without money exchange) - hybrid market is favoured over pure market based ones
what is the marketplace?
it is the arena of competitive or commercial dealings, the world of trade.
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)? (4 main things)
- aggregation (network effect) indirect
- matching: enabling filtered searches
- payment in an escrow style method (released after platform service provided)
- trust: checks (basic ID verification)
what other sectors does sharing resources occur in?
- B2B (sharing machinery)
- B2C: (Self service industry/ski/car)
- C2C: (the sharing economy new business model)
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
