SESSION 10 - Four models of sharing economy platforms

Question 1

Whats the article about?

Answer 1

• Sharing economy platforms have fostered competition and redefined industry boundaries in a range of businesses
• Competitive advantage because of how they are doing business
  –>new ways to combine old organisational & market mechanisms to coordinate platform participation
  o Business boundaries (internal vs external) became increasingly fluid
  –>exploit fluidity as strategic asset to coordinate & collaborate without formal organsisation
  –> Model can help other businesses to understand SE characteristics & respond strategically

Question 2

What are multisided platforms? (MSP’s)

Answer 2

Multi-sided platforms (MSPs): centred on facilitating interactions between two or more parties, e.g. eBay  sharing economy platforms are a form of MSPs, but facilitate rental & sharing instead of buying

Question 3

What are the three key attributes of sharing economy platforms?

Answer 3

1. Access over ownership: on-demand economy - shift from primacy of buying goods towards buying access to goods
2. Peer-to-peer economy: platforms mediate transactions among peers coordinated by trust & reputation
3. Allocation of idle resources: collaborative consumption – individuals share privately owned resources against a fee

Question 4

What are the challenges to incumbent firms and how do they react to them?

Answer 4

• Sharing economy platforms don’t need traditional industry dynamics  network effects are at the core of sharing economy business models and value propositions
• Incumbent firms react to competition from sharing economy platforms in three main ways: (1) through acquisitions of SE firms, (2) though collaboration or (3) through competition (create their own models)
• Main issue: sharing economy platforms face less regulations than incumbent firms, which is seen as unfair
  –> put incumbent firms at a competitive disadvantage through irregular/illegal means

Question 5

Labour is divided into subtasks that have to be coordinated and put together, through:

Answer 5

1. Mutual adjustment: informal communication between people conducting interdependent work
2. Direct supervision: an individual oversees the work of others & instructs interdependent workers
3. Standardisation of work processes: work content is specified in rules & routines
4. Standardisation of output: clarified results of different work; actions are not prescribed
5. Standardisation of skills & knowledge: standardised training & education
6. Standardisation of norms: common values & beliefs

Question 6

What are the four sharing economy models?

Answer 6

1. Chaperones: Airbnb
2. Franchisers: Uber
3. Gardeners: Couchsurfing
4. Principals: Handy