The rise of the sharing economy was introduced by several e-commerce, not so much anymore start-, ups. The peer-to-peer markets have replaced the traditional markets. The peer-to-peer markets introduce a business model formally unknown to the traditional markets. The markets no longer maintain their own resources to among other things decrease the costs of operating, but this also increases the risk that the growth of the company cannot be sustained. The intermediaries in the peer-to-peer market have an increasing stake in both sides of the supply and demand side of the market. An example is Airbnb influencing the revenue made by hotels. The impact it has on the hotel market is yet not identifiable. The causal impact of this phenomenon on the market revenue created by hotels is unidentifiable because of the non-uniformly distributed impact it has on the consumers. (Zervas et al., 2016)
The rising of Airbnb
The company has outgrown the united states into a global company. The growth of the company into the European market and Asian market is facilitated by government guidelines. The European Commission is supporting the growth of a sharing economy as an opportunity for entrepreneurs and the overall economy (Taylor, 2016). The stated goal by Airbnb of 10 billion dollars of revenue by 2020 compared to the current revenue of 900 million dollars in 2015 also supports the opportunistic expected growth (Taylor, 2016; Kokalitcheva, 2015).
But is the growth sustainable
Several problems arise with the growth of such sharing economies. The rating of Uber drivers is often described as biased, with opinions influenced by among other things by racism (Harman, 2014). And, it seems that a similar effect is occurring within Airbnb. Research shows that members are able to among other things, charge more than other up to 12% because of their physical appearance. When members have increasing concerns about discrimination caused by the members despite the current policies by Airbnb against racism. It then might be justified to wonder such a sharing economy is economically sustainable. (Harman, 2014).
So at the end could the growing business model to exclude their own stock be sustainable or to secure the growth should sharing economies maintain their own stock for operations?
http://papers.ssrn.com/sol3/papers.cfm?abstract-id=2366898
http://www.cnbc.com/2016/06/01/how-airbnb-is-growing-a-far-flung-global-empire.htmlhttp://fortune.com/2015/06/17/airbnb-valuation-revenue/
https://www.theguardian.com/sustainable-business/2014/nov/12/algorithms-race-discrimination-uber-lyft-airbnb-peer
Dear Tosca,
Interesting post! The first question I asked is: is the core of the problem not a societal one, larger than just the sharing economy? Sure, platforms such as Uber and Airbnb make it possible to rate the people individually, making it more explicit. But imagine two hotels, which are exactly the same besides one point: hotel 1 has a staff consisting of people with disabilities and hotel 2 has a staff consisting of people who all won a beauty contest in the last 3 years. Which hotel would you think be most successful? My goal is not to approve or justify this phenomenon, yet it is something that is inherent to our culture and to human beings. Maybe it’s less explicit when we review a hotel chain, instead of an individual providing the service.
So is this going to be detrimental to the sharing economy? Well, it sure is something that has to be worked on. Experts already suggested that there are a number of steps that can be taken by the platforms, such as anti-discrimination messages and automatically tracing false reports by the use of algorithms. Although the platforms seem somewhat reluctant to do so, it is important to realize that the laws and rules for such enterprises are still in its infancy. Once governments have developed the knowledge and capabilities on how to deal with the sharing economy, it is likely that they will interfere if discrimination becomes to great of a problem. Also, if this doesn’t happen the users might press the platforms to take action. Remember that the switching costs are low. You don’t agree with Uber’s way of working? You call a cab. Airbnb doesn’t act like you like them to act? You book a hotel.
Source:
https://www.theguardian.com/sustainable-business/2014/nov/12/algorithms-race-discrimination-uber-lyft-airbnb-peer