The internet has seen many steps of evolution since the inception of the world wide web in 1992. They comprise various steps in electronic, mobile and social business (Wikipedia 2015). While all phases have spurred new business models, the recent social web also enables a paradigm change from owning to using goods and/or services. Contrary to the traditional market model, which is based on ownership, the “Sharing Economy” is built on using and sharing of products and services among others.TITLEIntroductionThe utilization of underused assets is apositive development in today’s world.
There are lots of start-ups that try tobring supply and demand of underused assets together, and Spinlister is one ofthem. Spinlister is a global peer to peer bike sharing platform. The digitalbusiness engages in renting outdoors sports gear, with their main focus onbikes. Through the use of their website or their application for smartphones,users of the platform can list or rent bikes. The bike sharing business,founded by Will Dennis and Jeff Noh, initially launched in San Francisco andNew York in 2012. The company insures every bike that is listed on the platformup to $10,000, so renters do not have to worry that their bike will be stolenor damaged.
The platform haslistings in 63 countries and users from 120 countries (Haddad, 2014; Hurford 2015).The last couple of years, lotsof new digital business have emerged. With the current rise of these digitalbusinesses, the so called “sharing economy” is continuing to grow. Theunderlying business models that most of them use is that they operate in “sharingeconomies” of collaborative consumption (Cohen & Kietzmann, 2014). Hamari,Sjöklint and Ukkonen (2015) define the sharing economy as the peerto-peer-based activity of obtaining, giving, or sharing access to several goodsand services, coordinated through online digital platforms. The companies thatcontribute to the sharing economy do not sell goods or services themselves, butthey rather sell the users access to their platform.
The digital platforms relyon the users of the digital platform to generate supply and demand. The sharingeconomy has emerged from multiple technological developments that simplifiedsharing of goods and services through the availability of various informationsystems on the internet (Hamari et al., 2015).
The sharing economy gives peoplethe opportunity to offer and share underutilized resources in creative, newways (Cohen & Kietzmann, 2014). Using an application orwebsite to gain access to a good or service is an essential feature of thesharing economy. Instead of buying and owning goods, consumers only wantaccess to it when they need it and prefer to pay for the experience of usingthe good for a limited amount of time (Eckhardt & Bardhi, 2015). Spinlisterutilizes this economic development of the sharing economy by having createdtheir own platform in which users generate supply and demand. High technologymarkets display potential network effects, which means that the value of usingthe product increases if many other people also use the same product (Birke,2009). The goal of this paper is to discuss if Spinlister displays potentialnetwork effects if more people use the platform.
A literature review willbe used to answer the central question of this paper.The paper is structuredas follows.General backgroundCurrently, the traditionalmarket model is primarily based on ownership. However, the sharing economy is based on the sharing of products and services among others(Puschmann & Alt, 2016). The ownership of a good has been the normativeideal of consumption based on the advantages of ownership. Historically, ownershipof a good was cheaper and also provided a sense of independence (Snare, 1972). Incontrast, temporary access to something was seen as an inferior type ofconsumption (Ronald, 2008). Traditional rental was seen as wasteful (Cheshire,Walters, & Rosenblatt, 2010).
Therefore, individuals who engaged intraditional rentals were seen as inferior consumers who were misallocatingtheir purchasing power (Rowlands & Gurney, 2000). However, during the lastdecade, online access systems were developed that go beyond traditional formsof access. For example, peer-to-peer matching services like AirBnB. Theaccess-based consumption differs from traditional rental because it is moreself-service oriented and more collaborative. It is collaborative becausepeople with similar interests band together and share assets.
This form ofconsumption is enabled by digital technology. Since companies find ways tomonetize the use of their digital technology, the sharing economy is becomingmore important (Botsman & Rogers, 2010). The increase in popularity ofaccess can also be traced back to the global economic crisis (Bardi , 2012). Theconcept of the sharing economy is not new. Sharing resources was already usedin business-to-business domains, e.g.
the sharing of machinery in agriculture. Thesharing was also already known in business-to-consumer domains, e.g. publiclibraries and pools.
However, it was not yet known in consumer-to-consumerdomains. This development has resulted in new business models. Three maindrivers for this development can be identified: (Puschmann & Alt, 2016;Botsman, 2014; Hamari et al., 2015). – Changingconsumer behaviour- Socialnetworks and electronic markets- Mobiledevices and electronic services