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There’s no denying that sharing is the new way of life. Share your car (Snappcar), share your home (Airbnb), share your goods (Peerby) – the sky’s the limit. Technological development has helped us creating peer-to-peer platforms to connect users and owners. This has made sharing resources easier and more accessible than ever before. Pricewaterhouse Coopers predicts that, by 2025, the five key sectors of the sharing economy (staffing, finance, car sharing, travel and music and video streaming) could generate $335 billion in annual revenue, up from about $15 billion in 2016. For owners, these sharing platforms have given them the ability to turn possessions into actual revenue. For users, sharing platforms have increased convenience and often at a lower price than traditional channels.

There’s one large industry that has yet to benefit from this trend of sharing – the fashion industry. How many items seem to just collect dust in your closet? Did you buy an expensive dress that you can only wear on special occasions? Or a beautiful suit you might wear twice a year? Or maybe you don’t have a suit because you only need one once every so often. Wouldn’t it be great if there was a platform where you can temporarily rent out your suit to someone who needs it? Would this work? Let’s examine.

Like many other types of goods, clothes and accessories are often characterized by having high value but low usage. This makes them seem ideal for sharing. However, sharing clothing does not seem as simple as sharing other products, as transportation and maintenance (e.g. dry-cleaning) create significant operational and financial challenges. Another problem is in regard to cross-side network effects. Every sharing platform faces the challenge of getting enough people to their platform. However, in fashion, a wide range of product sizes and styles is crucial and incredibly hard to achieve. It can be close to impossible to find a dress that is both your size and fits your style.

With these challenges, the fashion sharing economy has not really been flourishing, especially compared to other sectors. According to a 2015 report by PwC, just 2% of the US population have engaged in a sharing transaction in the retail sector, compared to 6% for hospitality and 8% for transport.

However, there are companies that are taking the plunge. In the United States, the platform StyleLend requires owners to send in items they wish to rent out. The company itself handles delivery and dry-cleaning, to ensure items stay in great condition. It is likely that, in the future, sharing clothing will become more popular. On the other hand, wearing a new item for the very first time is, in my opinion, a feeling that’s hard to beat.

Sources:
https://www.businessoffashion.com/articles/fashion-tech/will-the-sharing-economy-work-for-fashion-rent-the-runway-rental

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The automotive industry is being disrupted from multiple sides by high-tech companies like Tesla and companies like Uber and Lyft. What will be the impact of self-driving cars and flying cars? What will be the influence of Big Data? And what about the industries served by the automotive industry, like the car rental industry?

The influence of the internet and expansion of digital technology have given the car rental industry new tools to serve the market. Existing competitors in the market, like Hertz, Europcar and Sixt initially adopted the internet to complement their services by a website allowing online reservations (Porter, 2001). The market is currently at the brink of more fundamental changes.

Experimental platforms like BlaBlaCar and SnappCar form clear evidence that the entry barriers for the car rental industry have decreased. Partly caused by the fact that physical assets are not needed anymore. These platforms are rapidly growing as they are responding to the rise of the sharing economy. They are reducing the search cost, transportation costs and giving more information towards customers via reviews for example. Disrupting the car-rental industry allows producers and consumers to come to high-quality exchanges. Changing the role of suppliers within the industry and opening the door for the long tail strategies add value to the industry with new types of car offerings (Brynjolfsson, 2011). With small homing costs, the car rental industry is attractive for new entrants as consumers are relatively indifferent which platform they use (Eisenmann, 2006). Making the car rental industry increasingly vulnerable.

The offer towards customers is more transparent and widely divided, which increases consumer power. The existing competitors will have to change to cope with the increasing offer of such initiatives, while the role of suppliers does not change dramatically (Hagiu, 2014). The platform has opened up the supply side for users (Eisenmann, 2009). It seems certain that the revenue from the traditional market will shrink, shifting from central car rental sources towards peer-to-peer offerings. With negative same side effects on the supplier side driving down the price (Eisenmann, 2006).

At SnappCar they are convinced that the sharing economy is here to stay. The founders have a clear vision for the future and aim to be active all around Europe. In the future you will be able to drive every car you see: big or small, hatchback or sports car, in the Netherlands or in Germany (Aureus, 2017). Car manufacturers and rental companies are also convinced that such sharing platforms will have a significant market share. When we look at the available data we will have to agree with them. The network effects of initiatives like SnappCar gain rapidly as soon as the network expands (van Alystine, 2016). The business scales much faster than a pipeline business because it does not bear the costs of external production. However, more and more companies will partake in the market and new technological developments like self-driving cars and flying cars are on their way. These innovations will push SnappCar to come up with a new disruptive initiative!

Group 53
Babette Petri 387664
Thomas de Clercq 357299
Tycho van der Scheer 361278
Willemijn de Monchy 358337
References

Aureus (2017) Surviving and thriving in the sharing economy: SnappCar via
https://www.aureus.nl/surviving-thriving-sharing-economy-snappcar/.

Brynjolfsson, E., Hu, Y., & Simester, D. (2011). Goodbye pareto principle, hello long tail: The effect of search costs on the concentration of product sales. Management Science, 57(8), 1373-1386.

Eisenmann, T., Parker, G., and Van Alstyne, M.W. 2006. Strategies for two sided markets. Harvard Business Review 84(10) 92-101.

Eisenmann, T., Parker, G., and Van Alstyne, M.W. 2009. Opening platforms: How, When and Why? In Platforms, Markets and Innovation, Gawer, A. (ed.), Northampton, MA: Edward Elgar, 131-162.

Emerce (2015) SnappCar: Recordgroei p2p autodelen in A’dam in 2015: nu ruim 18K autodelers in hoofdstad via

SnappCar: Recordgroei p2p autodelen in A’dam in 2015: nu ruim 18K autodelers in hoofdstad

Marshall W. et al (2016) Pipelines, platforms and the new rules of strategy.

Porter, M.E. 2001. Strategy and the internet. Harvard Business Review 79(3) 62-79.

The Guardian (2017) The rise of SnappCar, the business that lets you rent out your car via
https://www.theguardian.com/sustainable-business/2017/sep/04/snappcar-business-rent-car-airbnb-sharing-economy-sustainable-transport.

Wharton (2016) From Peerby to SnappCar: How Europe’s Sharing Economy Is Driven by Efficiency via http://knowledge.wharton.upenn.edu/article/peerby-snappcar-europes-sharing-economy-driven-efficiency/.

Van Alstyne, M. W., Parker, G. G., & Choudary, S. P. 2016. Pipelines, platforms, and the new rules of strategy. Harvard Business Review 94(4) 54-62.

Van Tol V. (2016) Director C2C Carsharing via
https://www.snappcar.nl/nwcontent/files/2012%20C2C%20Director%20SnappCar%20Business.pdf.