What is Functional Value

The sharing economy is a fast-growing phenomenon that has significantly disrupted traditional businesses. In order to identify the success factor of this new business model, this chapter discusses the unique features of sharing economy practices considering the concept of value sharing. First, the theoretical foundation of value sharing is explained using the value co-creation literature, which is derived from the service logics. Next, four types of values, namely economic, social, functional, and hedonic, are discussed in sharing economy practices. Finally, a conceptual framework of value sharing that depicts the benefits and costs of participation in the sharing economy is provided. Based on this framework, sharing each aforementioned value has its own benefits, which acts as an incentive for both resource suppliers and consumers in the sharing economy. However, the sharing process has its own costs that may be considered as a deterrent for sharing economy participants.