The Incumbent and the Grass-roots Approach to the Sharing Economy

Abstract

In our paper we examine why there are two distinct and uniform carsharing business models in the German carsharing industry, one of which is run by incumbents and the other of which is run by grass-roots actors, even though theory suggests that at this point of the industry life-cycle there should be active business model experimentation and multiple different configurations. We make a single case study examining the German carsharing industry as a whole and the development of the business models of four companies in particular: cambio carsharing, stadtmobil group, car2go, and DriveNow. We analyze the data longitudinally from the start of professional carsharing in 1988 to 2016 to uncover the paths of business model development. We discover that the two business models have developed according to different trajectories, because of different institutional logics driving the industry actors. Consequently, we suggest that business model research would benefit from observing the institutional logics driving the different actors. We further argue that institutional logics are especially important when studying sharing economy markets, which are by nature institutionally complex.