Chapter 11 - Sharing Economy

Sharing Economy

A tech-enabled economic system where individuals share access to goods and services.

Collaborative Consumption

An economic model where people share access to products/services instead of owning them.

Citizen Suppliers

Individuals who rent or offer services through platforms like Airbnb or Uber.

Micro-Entrepreneurs

People providing services directly via platforms (e.g., Uber drivers, TaskRabbit workers).

Market Makers

Online platforms that connect buyers and sellers without owning inventory (e.g., eBay).

Peer-to-Peer Loan and Fundraising Examples

Examples include Kickstarter (crowdfunding), LendingClub and Kiva (P2P loans).

Network Effects in Sharing Economy

As more users join, more value is created, encouraging growth (e.g., Uber, Airbnb).

Word-of-Mouth and Social Proof

People trust services more when others use them or recommend them.

Audit Trails and Ratings

Systems that record transactions and use ratings to ensure trust and accountability.

Trust Challenges

Concerns about user safety, bias in ratings, and abuse on peer-to-peer platforms.

Independent Contractors vs. Employees Debate

Legal and ethical issue regarding whether gig workers are employees or contractors.

WePay

A payment processor using social data and machine learning to secure transactions.

First-Mover Advantage

Early entry into a market allows firms to gain brand, funding, and network advantages.

Fragmented Market Opportunities

Platforms connect fragmented providers with consumers for greater efficiency.

Examples of Corporate Investment

Investments by Apple, Alphabet, GM, Toyota, and others into collaborative firms.

Airbnb's Global Reach

Airbnb hosts over 200M guests in 192 countries, with listings in 81,000 cities.

Airbnb’s Trust Infrastructure

Verification processes, $1M host guarantee, secure payments, and scam prevention.

Regulatory Risks for Airbnb

Some listings violate zoning or hotel safety laws; competition from hotels and cities.

Uber’s Business Model

Uber connects riders and drivers via app; owns no vehicles, enabling low costs.

Surge Pricing

Dynamic pricing that raises fares when demand exceeds supply to incentivize drivers.

Product-Market Fit (PMF)

Describes how well a product meets market needs and scales profitably.

Uber's Data and Algorithms

Uses real-time data and maps to optimize driver placement and ride efficiency.

API Integration

Uber's services are embedded in other apps like OpenTable and TripAdvisor.

Challenges for Uber

Legal issues, scandals, poor investments, and workplace toxicity hurt the brand.

Examples of Personal Service Platforms

Apps like Uber, Rover, Handy, and TaskRabbit that allow direct service offering.