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Sharing Economy

Funding and Motivational Factors across Industries

Written by E. Asplund, P. Björefeldt & P. Rådberg

Paper category

Bachelor Thesis

Subject

Business Administration>Management

Year

2017

Abstract

Thesis: Collaborative consumption Botsman and Rogers (2011) have determined the origin of the digital sharing economy as early as the late 1990s and mid-2000s. The rapid development of information technology has led to an increase in the amount of user-generated content in the past 10 years, and an increase in the way information is created and consumed through various collaborative Internet channels such as YouTube and Wikipedia (Kaplan and Haenlein, 2010; November 2007 Month). Therefore, the term sharing economy is derived from multiple technological developments that have made it easier to share tangible and intangible goods and services through various online platforms on the Internet (Hamari et al., 2015). There is almost no uniformity in the use of the term "sharing economy" because scholars use it for different purposes. For example, some people choose to define "sharing" to include only leases and leases. Sharing is a substitute or substitute for private ownership in gift giving and market exchange. The term sharing can be interpreted as two or more people enjoying the benefits (or costs) of an asset. Sharing does not divide products and services into mine and yours, but defines something as ours (Belk, 2007). Since the sharing economy includes multiple forms of economic value exchange, it extends the existing model from a micro and macro perspective. From a microeconomic perspective, the sharing economy is transcending various disciplines. For example, in car sharing, consumers can use different cars provided by different suppliers, so the relevance of brands and consumers may become less important ( Eckhardt & Bardhi, 2015). From a macroeconomic point of view, the term follows the mixed market model. The exchange of services and goods has always been the main focus of market-based models in macroeconomics. These models only focus on the transfer of ownership and economic resources between parties, so they are not applicable to the sharing economy (Puschmann & Alt, 2016). Schor (2016) explained the sharing economy as a way to recycle goods, increase the use of durable assets, share productive assets, and exchange services. With the help of other overlapping terms such as collaborative consumption, efforts have been made to further define the sharing economy—but without any broader success (Martin, 2016). However, mainstream media defines collaborative consumption as "an economic model of ownership access based on sharing, exchanging, trading or leasing products and services" (Botsman, 2013). Another explanation restricts collaborative consumption to non-monetary transactions; “acquiring and allocating resources for fees or other compensation” (Belk, 2014, p. 1597). 2.1.1 Industries in the Sharing Economy According to Belk (2010), sharing behaviors among communities, collectives, and companies have existed for centuries, but new forms of collaborative consumption are now entering the private, public, and non-profit sectors ( Bauwens, Mendoza and Icomela, 2012; Griffith and Gilly, 2012). In fact, due to social, economic and technological driving factors, collaborative consumption has spread to areas where collaborative consumption has not previously been used (Belk, 2014; Owyang, Samuel, and Grenville, 2014). Sharing economy as a coherent new industry discussion (The Economist, 2013). Sharing economy companies usually retain certain characteristics. The most common is that these companies use online platforms that allow users to share or sell things that previously had transaction costs that would hinder such transactions. Almost all companies involved in the sharing economy business have a non-sharing economy equivalent. Although the sharing economy reshapes the way individuals obtain underutilized commodities, the sharing economy rarely creates demand or new markets. Most sharing economy companies replicate existing services (Miller, 2016). Crowdfunding, carpooling, bike sharing, changing clothes, shared workspaces, and social lending-there are countless examples involving cross-industry collaborative consumption. Although these examples vary in purpose, scale, and maturity, according to Botsman & Rogers (2011), they can be organized into three different systems, namely "product service system", "redistribution market" and " Collaborative lifestyle" in order to gain a deeper understanding of this term. People are increasingly turning to the "use mentality", that is, paying for the benefits of the product without fully owning the product. The product service system is based on this concept, it uses the private ownership model to subvert the traditional industry. In the product service system, multiple products owned by a company are shared with the help of a service. The product service system may also help to extend the life of the product because it is based on the idea that products with limited use are replaced by shared services that maximize their utility. For users of these service systems, the benefits are twofold. First of all, consumers do not have to pay for the product, which also makes them irresponsible for repairs, maintenance and insurance. Second, as our relationship with things shifts from ownership to use, the options for satisfying our needs increase. Social networks or platforms enable second-hand or second-hand goods to be redistributed where they have never been fully utilized, giving birth to a second type of coordinated consumption, that is, the redistribution market. Read Less