Platforms in the peer-to-peer sharing economy

Abstract

PurposeThe purpose of this paper is to examine peer-to-peer sharing platform business models, their sources of competitive advantage, and the roles, motivations and behaviors of key actors in their ecosystems.Design/methodology/approachThis paper uses a conceptual approach that is rooted in the service, tourism and hospitality, and strategy literature.FindingsFirst, this paper defines key types of platform business models in the sharing economy anddescribes their characteristics. In particular, the authors propose the differentiation between sharing platforms of capacity-constrained vs capacity-unconstrained assets and advance five core properties of the former. Second, the authors contrast platform business models with their pipeline business model counterparts to understand the fundamental differences between them. One important conclusion is that platforms cater to vastly more heterogeneous assets and consumer needs and, therefore, require liquidity and analytics for high-quality matching. Third, the authors examine the competitive position of platforms and conclude that their widely taken “winner takes it all” assumption is not valid. Primary network effects are less important once a critical level of liquidity has been reached and may even turn negative if increased listings raise friction in the form of search costs. Once a critical level of liquidity has been reached, a platform’s competitive position depends on stakeholder trust and service provider and user loyalty. Fourth, the authors integrate and synthesize the literature on key platform stakeholders of platform businesses (i.e. users, service providers, and regulators) and their roles and motivations. Finally, directions for further research are advanced.Practical implicationsThis paper helps platform owners, service providers and users understand better the implications of sharing platform business models and how to position themselves in such ecosystems.Originality/valueThis paper integrates the extant literature on sharing platforms, takes a novel approach in delineating their key properties and dimensions, and provides insights into the evolving and dynamic forms of sharing platforms including converging business models.