Abstract
The new technological innovations are changing the ways businesses are being operated. The sharing economy-based new business models (SEBMs) using technology have many benefits at national, organisational, community, and individual levels. The sharing economy provides a huge potential of creating millions of jobs by leveraging the business sector and providing a new way to producers and consumers to meet each other's needs. To maintain and enhance the use of technology-enabled sharing economy-based models (SEBMs), it is paramount to understand these SEBMs models and the behavior of the market, particularly on how to influence the market's attitude towards using SEBMs. This chapter analyses the new sharing economy-based and technologically-enabled business models and their antecedents.
TopIntroduction
The tremendous growth in information and communication technology (ICT) during the last two decades has left a huge effect on our socio-cultural ways and living. The businesses have understood the significance of the use of technology and the importance of understating of consumers’ reaction and intentions to technological changes. The organisations are using disruptive innovations in ICT in almost all functional areas of the management. The adoption of technology is leading to paradigm shifts in the value chain, value networks and business models of the companies. Despite many kinds of business models, the business models based on sharing economy or called here as Shared Economy Business Models (SEBMs) have shown huge potential and opportunities. The term sharing economy is also known as collaborative consumption, peer economy, and collaborative economy (Botsman, 2013; Belk, 2014). The sharing economy is an ‘economic activity of giving or taking the rights’ of ownership, usage, enjoyment of products, services or ideas by people.
The sharing economy is viewed as an evolving phenomenon in national economies, which is driven by the growth of information and communication technology. The social economy drove business models are changing consumer awareness, social commerce and web-sharing communities (Botsman and Rogers, 2010).
The sharing economy is ‘the peer-to-peer-based activity of obtaining, giving or sharing the access to goods and services, and the economy is coordinated through community-based online service’ (Hamari, Sjöklint, and Ukkonen, 2015). Sharing economy is an economic activity of sharing the underutilized assets, resources, or services directly from individuals; either free or for a fee (Botsman 2015).
Since the start of the 21st century, the sharing economy has been developing rapidly all over the world and even has grown at a faster rate than some of the social media platforms such as Facebook, Yahoo, and Google combined (WEF, 2016). This economic model is changing the consumption patterns all over the world. The multinational companies such as Airbnb and Uber, are the forerunners of these technology-enabled innovative business models (PWC, 2015). According to PWC (2015), five key sectors; ride-sharing, travel, staffing, finance, music, and video streaming have tremendous potential to raise global revenues via shared economy based business models (SEBMs). The rise of sharing economy based on e-commerce systems have simplified the sharing of products or services for new companies like Blablacar, Uber, and Couchsurfing, etc (Galbreth, Ghosh, and Shor; 2012). The growth in the smartphone has further allowed easy connection between suppliers and buyers via communications as well as location sharing technologies. For an instant, in case of ‘ride-sharing services’ such as Uber or Blablacar it is much easier for a customer (who needs a ride to a particular place) to connect with a car driver who can drive the customer to that place (Cramer and Krueger, 2016).
The ‘rides sharing industry’ is one of the pioneers of sharing economy based business models (SEBMs). As per Statisca (2019), the global revenue of ‘ride-sharing industry’ is US$156,176m and it will grow at 10.2% to reach US$230,085m by 2023. In terms of growth of revenue, the top countries are; USA (US$49,848Ml), China (US$35,801Ml), India (US$29,333Ml), Indonesia (US$5,325Ml) and the UK (US$2,834m). Globally the number of rides sharing users have increased from 577.4 million (2017) to 824.9 million in 2019. The number is expected to reach 1,109.05 million by the year 2023 (Statista 2019). The global user penetrations rate is expected to rise from 8% (2017) to 14.5% of the population by 2023. Singapore is at the top position with 32% user penetration, followed by China (20.4%), USA (20.2%), UK (16%), and Ireland (15%) (Statsta, 2019).
During 2006-2012, there were economic crises that have caused negative impacts around the world. The ‘ride-sharing economy’ is creating a million jobs along, letting people help each other by sharing underused assets and involving people in sustainable behavior (Prothero et al., 2011).
Key Terms in this Chapter
Purchase Intention: The Sum total of cognitive, affective and behavioural towards adoption, purchase, and use of the product, services, ideas or certain behaviours.
Consumer Motivations: Intrinsic and extrinsic needs & drives that impel consumers to purchase and use product, services, ideas or adopt certain behaviors.
Revenue Streams: A range of diversified sources or targets or products or offerings, spill-overs’ or pricing methods; which are sources of a number of diversified incomes, fees, profits and benefits to an individual and organisation using a business model.
Sharing Economy Business Model (SEBM): A Sharing Economy business model (SEBM) may be defined as a strategic process that an organisation uses to create and capture customer values by making use of innovation, technologies, online sharing, peer-to-peer sharing, or collaborative consumption in order to reconstitute organisational internal core competencies, external alignment, & dynamic capabilities and thus achieving sustainable competitive advantages.
Consumers: Are individuals or organisation that purchase and exchange a product or services or value to satisfy their needs.
Economic Benefit: Are monetary, rational and functional benefits or values achieved by a consumer post-adoption, purchase and use of the product, services, ideas or certain behaviours.
Sharing Economy: The sharing economy is an economy in which production and consumption are ensured via peer to peer collaborative consumption, shared knowledge, co-creation, co-production, prosumption, gigging, and using the technological platform, and such an economy is based on sharing the underutilised resources as collaborative consumptions with underpinned mutual trust.
Business model: A business model includes a set of activities (strategic choices, the value network, creating value and capturing value); scopes of business pillars (need, market technology customer interfaces, and financial aspects); elements (core capabilities, value configuration, revenue streams, cost structure, value proposition, customer segments, distribution & communication channels, partnerships, customer relationship,) and a range of actions (who, what, when, why, how and how much). a business model helps firms to structure their internal constituents (inbound, operations, R&D, marketing, distributions, services, and customer transactions) as well as external alignment with the suppliers, customers, distributors, and other external stakeholders.
Technology Innovation: Is a process, tools, and products of inventions, creativity, and modification that results in new ideas, products, process, solutions to existing or new needs,and disruption of industries, & its business models.