THE PENNSYLVANIA STATE UNIVERSITY SCHREYER HONORS COLLEGE

DEPARTMENT OF MARKETING

A QUALITATIVE ANALYSIS OF GENERATIONAL RECEPTIVENESS TO THE SHARING ECONOMY

SOPHIA KONTRA SPRING 2020

A thesis submitted in partial fulfillment of the requirements for a baccalaureate degree in Marketing with honors in Marketing

Reviewed and approved* by the following:

Lisa Bolton Associate Professor of Marketing Thesis Supervisor

Jennifer Chang Coupland Clinical Associate Professor of Marketing Honors Advisor

* Electronic approvals are on file. i

ABSTRACT

The sharing economy is an umbrella term used to define the peer-to-peer based activities of sharing access to goods, assets, or services. Millennials, individuals born 1981-1996, seem to show more preference for participating in the sharing economy than baby boomers, individuals born 1946-1964. This thesis provides three frameworks to analyze why millennials have been more receptive to the sharing economy than older generations: 1) to define the sharing economy, split into four characteristics (temporary access, reliance on a platform, expanded consumer roles, and a crowd-sourced supply); 2) to define generational differences, split into six categories

(technology usage, work values, personal values, lifestyle preferences, consumption patterns, and change), and 3) a generational analysis of the sharing economy to show which aspects of the sharing economy lead generations to act more positively or negatively. Brand positioning and marketing strategies used within the sharing economy may naturally favor millennials over baby boomers, as exemplified in a case study of Uber.

ii

TABLE OF CONTENTS

LIST OF FIGURES ...... iii

LIST OF TABLES ...... iv

ACKNOWLEDGEMENTS ...... v

Chapter 1 Introduction ...... 1

Chapter 2 The Sharing Economy ...... 4

Sharing versus Traditional Market Economy ...... 4 Key Characteristics of the Sharing Economy ...... 6 1. Temporary Access ...... 6 2. Reliance on a Platform ...... 7 3. Expanded Consumer Roles ...... 7 4. Crowd-sourced Supply ...... 8

Chapter 3 Generations ...... 10

Baby Boomers ...... 10 Millennials ...... 11 Technology Usage ...... 11 Work Values ...... 12 Personal Values ...... 13 Lifestyle Preferences ...... 14 Consumption Patterns ...... 15 Type of Consumption ...... 15 Attitudes Towards Price and Brand ...... 16 Channels ...... 16 Attitude Towards Change ...... 17

Chapter 4 Generational Analysis of the Sharing Economy ...... 19

Expanded Consumer Roles ...... 20 Temporary Access ...... 21 Transaction Facilitation: Reliance on Intermediary ...... 23 Crowd-sourced Supply ...... 24

Chapter 5 Uber Case Study ...... 27

Uber’s Brand Positioning ...... 27 Uber’s Marketing Strategies ...... 29 Inducing Trial ...... 29 Referrals ...... 30 Social Media ...... 32 iii

Traditional Marketing ...... 35 Future Appeal to Older Generations ...... 37 Brand Positioning ...... 37 Product Offering ...... 39 Increase Traditional Marketing Tactics ...... 40 Increase Partnerships ...... 41 Case Summary ...... 42

Chapter 6 Conclusion ...... 43

Future of the Sharing Economy ...... 43 Marketing Implications ...... 44

BIBLIOGRAPHY ...... 46

iv

LIST OF FIGURES

Figure 1. Worldwide 'Google' Mentions of the Term "Sharing Economy" ...... 2

Figure 2. Example of Uber's Conquest Marketing ...... 30

Figure 3. Uber's Referral Program ...... 31

Figure 4. Examples of Uber's Facebook Advertisements ...... 32

Figure 5. Examples of Uber's Influencer Marketing ...... 34

Figure 6. Examples of Uber's Traditional Marketing ...... 36

Figure 7. Example of Uber's Drip Marketing ...... 37

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LIST OF TABLES

Table 1. Comparison of Characteristics of Sharing Economy and Traditional Market Economy 9

Table 2. Characteristics by Generation ...... 18

Table 3. How Generational Differences Affect Consumer Reactions to Key Characteristics of the Sharing Economy ...... 19

Table 4. Uber's Product Offerings ...... 28

Table 5. Price Differences Between Uber Vehicles ...... 29

Table 6. Uber's Safety Features ...... 39

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ACKNOWLEDGEMENTS

I have the utmost appreciation for the overwhelming support I have received over the past

2 years (and beyond) that has made the production of this thesis possible. First and foremost, to

Dr. Lisa Bolton, for serving as my thesis supervisor. By investing in every aspect of my thesis, you consistently challenged me to dig deeper and pushed me beyond my limits. I cannot thank you enough for your continual guidance and patience with me during the entire process. To Dr.

Jennifer Chang Coupland, for serving as my honors advisor over the years and faculty reader.

Your encouragement in my abilities to overcome every obstacle I faced during the process did not go unnoticed. And to Dr. Jadrian Wooten, whose wholehearted passion for teaching has inspired so many of my curiosities for learning. You have allowed me to achieve beyond what I ever thought was possible in 4 years at Penn State, and I am forever grateful to have been one of your students.

Last, but certainly not least, to my parents and siblings for their moral support throughout not only the thesis process but also my entire college career. Thank you for your persistent motivation and optimism that has allowed me accomplish all my professional and personal goals. 1

Chapter 1

Introduction

Sharing is a concept as old as mankind. Among today’s consumers exists a growing consensus that sharing assets is often more practical than actually owning them. The sharing economy is an umbrella term used to define the peer-to-peer based activities of sharing access to goods, assets, or services (Eckhardt et al., 2019). Today, strangers can share personal assets with other strangers, facilitated by platforms of the sharing economy.

The development of the sharing economy is part of a broader change in consumer culture.

Ecommerce has experienced tremendous popularity, growing more than 15 percent in 2018 to reach over $500 billion in 2019 (Deloitte, 2019). Consumers now have widespread access to sharing economy platforms that facilitate peer-to-peer based activities, with much more convenience and increased accessibility than before. Indeed, the global revenue from the sharing economy is expected to rise to more than $335 billion by 2025 (PwC, 2015).

The core appeal of sharing has long been recognized: for example, renting and sharing larger assets was seen as more financially practical than buying during and after the Great

Depression (Fry, 2019). Although it is difficult to determine exactly when the term ‘sharing economy’ was coined, it has become increasingly popular as evidenced by the exponential increase in Google searches for the term (Figure 1). This growth in consumer search is also reflected in consumer awareness and participation. In 2018, 83% of adults in the United States were familiar with the sharing economy and its services, compared to only 47% in 2015

(Mazareanu, 2019). Moreover, over 80 million users have participated in the sharing economy in 2 2019, with projections to more than 89 million in 2020. While the sharing economy comprises numerous industries, such as transportation, lodging, and human resources, it is dominated by firms within the transportation and home-sharing business, such as Uber and Airbnb, respectively (eMarketer, 2020). Figure 1. Worldwide 'Google' Mentions of the Term "Sharing

Economy"

Note: Google Search Frequency is a relative measure and does not represent an absolute number of mentions. Numbers represent search interest relative to the highest point on the chart for the given region and time. Search interest is measured on a scale of 0 to 100, for each month of each year. A value of 100 is peak popularity for the term; a value of 50 means the term is half as popular; a value of 0 means there was not enough data for the term. The average of 12 months was taken and is represented in the corresponding year. (Google Trends, 2020).

Participation does vary in the sharing economy in general, as well as at an industry- specific level. Of particular interest to my thesis are generational differences in participation. The younger generation of millennials (born in the late 1900s) seem to be the driving force in the sharing economy’s growth, compared to the older generation of baby boomers (born in the mid-

1900s). For example, as of 2019, 55% of U.S. adults aged 18-34 have used a ride-hailing service, compared to only 25% of those aged over 50 (eMarketer, 2019). Likewise, almost 60% of 3 Airbnb’s users in 2018 were millennials and are expected to be consistent with 75% millennials and generation Z by 2022 (Airbnb, 2019).

What accounts for these differences by generation in participation in the sharing economy? To shed light on this question, my thesis will investigate the characteristics of the sharing economy, as well as generational differences across consumers.

4 Chapter 2

The Sharing Economy

The sharing economy brings together consumers and producers, allowing collaboration through an intermediary platform. Access-based consumption, on-demand economy, platform economy, and collaborative consumption are all synonyms of the term commonly used in literature (Calo & Rosenblat, 2017). Within the sharing economy, both tangible goods and intangible services are shared from producers to consumers. The act of owning (i.e., purchasing a car) is replaced by exchanging, sharing, or renting. For example, consumers receive a driving service from another when using Uber, whereas consumers personally drive another’s car when using Turo (Eckhardt et al. 2019). This shift from ownership to access allows typical consumers to act as sellers (and vice versa) for everything from cars, to office and parking spaces, to clothes.

Sharing versus Traditional Market Economy

In relation to the traditional market economy, the sharing economy increases the benefits received by both parties involved. Through participation in the sharing economy, producers (the consumer who is offering the service) have the ability to leverage unused or underused assets.

Producers become more efficient in maximizing utility by sharing with consumers what would have been ‘excess capacity’ (Eckhardt et al., 2019). Due to the nature of their operations, sharing economy firms often thrive by avoiding regulations imposed on traditional market economy firms, such as restrictions on labor. Those who are typically excluded from mainstream jobs in the workforce, such as those who demonstrate lower levels of education or criminal records, are 5 given various opportunities to generate an income. Being self-employed, they are granted much more flexibility in their schedules (Eckhardt et al., 2019).

Offsetting these advantages, however, are several legal concerns. Take, for example, arguably the most prominent example of the sharing economy: Uber. Uber is an “on-demand” ride-hailing service that connects riders with nearby drivers with the tap of a finger on its smartphone app (Uber, 2019). Uber relies on its independent contractors to run the business, none of whom require a license like in the taxi business. Some critics argue that sharing economy firms operate unfairly: independent contractors can avoid labor laws, such as minimum wages or liability issues (Arthurs, 2018). Another legal concern relates to discrimination.

Providers such as Airbnb, an online marketplace used to coordinate lodging and other related experiences (Airbnb, 2019), require information about their customers (during booking) similar to that of a hotel chain, such as any type of government-issued identification. Doing so allows hosts to choose who they rent their home to and can often result in discrimination practices (Calo

& Rosenblat, 2017). While many firms within the sharing economy, like Airbnb, do have nondiscrimination practices in effect, it is not illegal to discriminate (i.e., to prohibit a user from completing a booking, due to reasons such as race or ethnicity). In a more traditional commercial environment, these practices would be illegal, outlawed by Title VII of the Civil Rights Act of

1964, prohibiting discrimination in the workplace.

Additional concerns arise regarding the trust and privacy issues associated with the sharing economy. Platforms within the sharing economy rely on ‘feedback systems’ that involve participation from both the user and facilitator. Critics cite that reciprocity problems emerge, resulting in inflated (positive) reviews of the facilitator and consequently diminishing the trustworthiness of such ratings systems (Bolton et al., 2013). 6 Key Characteristics of the Sharing Economy

Despite these differences, both the sharing economy and traditional market share similarities in that they involve a transfer of economic value. Such transactions can be referred to as ‘quid-pro-quo,’ a New Latin term to mean ‘something for something’ (Merriam-Webster,

2020). The transfer of goods or services from one party (the producer, in the context of the sharing economy) is dependent upon the other party’s actions (the consumer or user). In offering a good or service, producers within the sharing economy gain profit (Palgan et al., 2017).

To truly distinguish the sharing economy from a traditional market economy, it is necessary to establish key differentiating characteristics. The remainder of this chapter lays out defining characteristics that will serve as a framework for the rest of my thesis.

1. Temporary Access

First, the sharing economy represents temporary access. As opposed to a transfer of ownership within a traditional market, in the sharing economy, a transfer of access exists between two individuals. As previously noted, the sharing economy acts on resources which are often under-utilized, connecting the supply side of such resources to the demand of consumers.

These resources are temporarily utilized. Whereas the market economy typically focuses on a transfer of ownership, such as purchasing a car at a dealership, a transaction within the sharing economy focuses on a transfer of access (Eckhardt et al., 2019). This transfer of access leads to the permanent recirculation of goods/services from one consumer to another [1].

1 Rental and secondhand markets also contribute to the recirculation of goods but differ from the sharing economy on key characteristics. See Table 1 for a comparison. 7 2. Reliance on a Platform

Second, the sharing economy involves reliance on a platform, which is often the internet or a technology-based system. Websites or mobile applications help facilitate the matching of producers to consumers who want access to the shared good or service. These intermediary platforms (sometimes known as two-sided networks) have existed for many years prior to the emergence of the sharing economy (Eckhardt et al., 2019). For example, eBay has been centered on exchanging goods between individuals (consumer-to-consumer and business-to-consumer) since 1995. Technology allows consumers to have access to services in the sharing economy just about anywhere (Perren & Kozinets, 2018), and the intermediary platform decreases transaction costs associated with the exchange between consumers (Calo & Rosenblat, 2017). For instance, search costs, such as the time and energy spent by a consumer while seeking a product or service, are minimized. The online platform also expands the scope of the search for both producers and consumers. Perhaps the sharing economy did exist before the term became apparent in society but was confined to immediate friends and families.

3. Expanded Consumer Roles

Third, the sharing economy demonstrates expanded consumer roles. In traditional markets, the supply and demand side are separate from each other. Consumers and producers are distinct entities; the consumer’s role is typically independent from that of the producer. Rather, in the sharing economy, individuals can be classified as both providers (also known as a facilitator) and consumers (also known as a user), introducing a term called ‘prosumer.’ For instance, an Uber driver has the ability to be the ‘producer,’ by providing a service one day (as 8 an Uber driver), as well as the ability to be the ‘consumer’ the next (as an Uber passenger).

Similarly, someone acting as a host for a site such as Airbnb can also be a guest.

4. Crowd-sourced Supply

Fourth, the sharing economy is characterized by a crowd-sourced supply. Crowdsourcing refers to obtaining work and/or information from a large group of individuals, usually via the internet or other media sources. In the context of the sharing economy, both the supply of workers as well as product is crowd-sourced. For example, any individual can volunteer to be an

Airbnb host, choosing to share a vacation home, an apartment, etc. with other individuals demanding that product offering. The growth of Airbnb over the past decade is partly attributed to its immense success in crowdsourcing, allowing their supply to extend much further than that of the hotel industry.

9 Table 1. Comparison of Characteristics of Sharing Economy and Traditional Market Economy

Characteristic Sharing Traditional Market Economy Economy Purchasing Rentala Second-handb

Access Temporary Ownership Temporary Ownership

Transaction Reliance on Same-side Same-side or Same-side or Facilitation intermediary network two-sided two-sided (two-sided network network network)

Consumer Roles Expanded Independent Independent Independent

Supply Crowd-sourced Insourced Insourced Crowd-sourced

Note: a Rental provides temporary access without a transfer of ownership; in contrast to the sharing economy, however, supply is insourced and consumers do not adopt expanded roles. For example, consumers rent cars (temporary access without ownership) from a rental car agency that has its own vehicle fleet (insourced). b The second-hand market relies on crowdsourcing but involve the transfer of ownership rather than access. For example, eBay and Craigslist are early ecommerce websites that facilitate selling of used items (and other services); more recently, ThredUp and Poshmark are specialty websites for secondhand clothing, shoes, and accessories.

To understand the popularity of the sharing economy, we need to understand how its key characteristics appeal to consumers. This thesis adopts a generational perspective to understand the key differences between generations that affect their participation in the sharing economy.

Chapter 3 analyzes both the baby boomer and millennial generation and the characteristics which set them apart from each other.

10 Chapter 3

Generations

A generation is formally defined as a group of individuals born and living contemporaneously (Merriam-webster, 2020). Generational cohorts emerge about every 15 years, and in 2019, Pew Research defines 5 distinct generational cohorts: The silent generation

(born 1928-1945), baby boomers (known more informally as ‘boomers’; born 1946-1964), generation X (born 1965-1980), millennials (born 1981-1996), and generation Z (born 1997-

2012) (Pew Research Center, 2018). Born around the same time period, individuals within the same generational cohort experience the same life events. Specific birth year defines the splits between generational cohorts, though generational similarities are more characterizing. These characteristics are often shaped by situational environments including social, historical, economic, or political events. Other influencing forces include family and peers and popular culture (Smola & Sutton, 2002). This thesis focuses on two generations: baby boomers and millennials.

Baby Boomers

Following the silent generation, the baby boomer generation emerged at the end of World

War II. The baby boomer generation, who are aged 55 to 75 in 2019, comprise about 72 million and are the second-largest generation (Fry, 2019). At a time when birth rates experienced exponential growth, these individuals constituted the ‘baby boom’ of the 1940s, hence the boomer generation’s name (Greenwood et al., 2005). Significant societal events during their coming of age period, which shaped the way they view the world, included the Civil Rights 11 Movement, women’s movements and equal rights movements, and the Vietnam War. For a majority of history, the baby boomer generation was the largest generational cohort.

Millennials

Millennials, born between 1981 and 1996, have recently surpassed the boomer generation’s population size. The millennial generation, who are aged 23 to 38 in 2019, comprise about 73 million and are currently the largest generation (one in three) in the U.S. labor force

(Cilluffo & Cohn, 2019). Some of the significant themes that have shaped the world view of millennials include the drastic increase in women’s employment opportunities, dual-income households and diverse family types as standard, and sophisticated technologies in homes, schools and workplaces (Williams & Page, 2011).

To be able to discuss differences between generations, it is necessary to identify a framework of characteristics to explain how generations come to be as well as how they can be distinguished from each other. The remainder of this chapter lays out defining characteristics of baby boomers and millennials, as summarized in Table 2, based on extensive literature on generational cohorts.

Technology Usage

In 2018, 95% of American adults use a cellphone (77% using a smartphone), 89% use the internet, and 73% use a desktop computer and/or laptop (Hitlin, 2018). However, there are key differences among baby boomers and millennials' acceptance and views of technology. For example, more than 90% of millennials own a smartphone, compared to only 68% of boomers 12 (Vogels, 2019). These statistics should not come as a surprise: key events in millennials’ formative years include the invention of the first cell phone, first laptop, and standardization of the internet in the late 1980s (Dennis & Kahn, 2020). Indeed, the youngest millennials are 23 years old today and have grown up in an electronic environment. Millennials have been ‘wired’ every step of their lives and, as the most tech-savvy generation, have been adept at learning and embracing technology. On the other hand, the youngest of baby boomers were already in their late 20s when technological advancements like the cell phone emerged. Broad forces such as technology influence an individual’s development and are strongest during childhood and adolescence (Twenge et al., 2010). For this reason, using modern technology does not come as easily to baby boomers and they are not reliant on technology.

Work Values

An individual’s personal values influence his or her attitudes towards work, shaping what he or she values while working. Work values can be defined as “desired end-states that a person thinks he or she should be able to realize through working and desired modes of behavior at work” (George & Jones, 1997). A generation’s work values can be characterized as either intrinsic or extrinsic. An intrinsic value focuses on the outcomes occurring through work, and are dependent on the work itself, such as a process of learning or an innate interest (Bourne, 2015;

George & Jones, 1997). In contrast, an extrinsic value is the consequence of work and the tangible aspects independent of the individual, such as income (Bourne, 2015).

Millennials seem to be more intrinsically motivated than boomers, favoring work that has meaning and placing less importance on its materialistic value. They take pride in the 13 craftsmanship of their work, and money is a less important characteristic of the ‘ideal’ job. For example, 58% of millennials planned to switch jobs not because of compensation but rather for learning, growth opportunities, and a better work-life balance (Fox, 2019). Their “work-to-live” mindset makes them view work as temporary (Bourne, 2015) and lifestyle (like time away from the office) as extremely important. On the other hand, boomers have a “live-to-work” mindset.

They have always been quite loyal to their employers and career, leading lives focused on work.

Their workaholic nature contributes to their belief that work is one of the most important parts of a person’s life (Smola & Sutton, 2002). This generation is much more extrinsically motivated than younger generations, placing more importance on receiving high incomes. Boomers are also becoming more active in retirement than older generations, planning to continue working past retirement (Williams & Page, 2011). Overall, baby boomers and millennials have vastly different work values: respectively, workaholic and live-to-work versus meaningful, work-to-live, and work-life balance.

Personal Values

An individual’s personal values shape his or her decisions on a daily basis. Abraham

Maslow, an American psychologist, proposes that people are most motivated when the outcome is associated with something aligned with that individual’s values (Cullen, 1997). Indeed, work values often reflect an individual’s personal values. As work values tend to shift with generational cohorts, so do personal values.

Baby boomers were born into a time of economic security following World War II. Baby boomers’ parents set the precedent for what would become the American Dream: having high- 14 paying jobs, buying a home and a car, getting married and starting a family. Baby boomers grew up chasing the American Dream and valuing achievement as a determinant of success in life.

Consequently, they have grown to value self-perfection and personal gratification. Valuing self- fulfillment and status, they use their career to define their life. In contrast, technology has shaped what is important to millennials: their personal values of independence and self-reliance stem from always having information at their fingertips. Similarly, a growing diversity in employment opportunities has shown this generation that both equality and individuality is important (Williams & Page, 2011). Overall, baby boomers and millennials differ in their personal values of self-perfection, personal gratification, and status; and independence, self- reliance, and individuality; respectively.

Lifestyle Preferences

Looking across generations, shifts in lifestyle preferences have gradually emerged.

Overall, millennials tend to reach milestones in their lives later than boomers in many aspects, including post-undergraduate education, marriage and home ownership. For example, almost half of baby boomers were married at ages 18-32, compared to only a quarter of millennials

(Pew Research Center, 2014). In turn, marital status relates to other lifestyles differences, such as the higher share of married individuals in suburban than urban counties (Livingston, 2018).

Indeed, baby boomers prefer suburban-style living whereas millennials prefer more urban centers and are happier in larger cities (characterized by populations greater than 250,000; Okulicz-

Kozaryn & Valente, 2018). Millennials are more frequently choosing to live in high-density locations characterized by smaller housing units (Moos, 2015). Youthification has emerged as a 15 result, occurring when young adults increase the share of total population in a specific neighborhood.

Each generation’s personal and work values (as previously discussed) also influence their lifestyle preferences. Of particular importance to the sharing economy are generational attitudes toward travel. Millennials’ desire for a balance between their work and personal life is reflected in their desire for travel. In 2019, millennials prioritized travel (specifically international) more frequently than any previous generation (Fox, 2019). Older generations, too, enjoy the luxury of travel but do so less often than millennials.

Consumption Patterns

There are notable differences in the consumption patterns of baby boomers and millennials. Each generation spends disposable income differently, has differing attitudes towards price and brand, and different channel preferences as follows.

Type of Consumption

Millennials have shown a growing shift towards the consumption of experiences.

Millennials have begun to spend more of their discretionary income on entertainment than those in the baby boomer generation (Deloitte, 2019). Spending also differs by industry: spending on education and healthcare industries has gradually risen in subsequent generations, but comparatively millennials tend to spend more on education while boomers tend to spend on health-related goods and services. Millennials also spend more on clothing than any generation prior (Williams et al., 2010). Alongside these differences, it is also important to note that 16 purchasing power differs between the two generations. Millennials are under more financial constraints than older generations (Deloitte, 2019): for example, unemployment rates rose from

2007-2010 (due to the Great Recession), hitting millennials hardest at 18% compared to 8% for older generations. Income levels are also lower for younger generations at the same ages (Paulin,

2019).

Attitudes Towards Price and Brand

Boomers focus more on the quality of a purchase and are likely to spend more per purchase; however, they are still price-conscious, valuing everyday-low prices (Parment, 2013;

Williams et al., 2011). Boomers also typically demonstrate higher levels of brand loyalty than millennials, likely due to their skepticism toward new or unfamiliar products (Williams et al.,

2011). In comparison, millennials are also price-conscious, perhaps partly driven by their lower spending power. However, millennials also demonstrate higher levels of ‘prestige sensitivity,’ which refers to “favorable perceptions of the price cue based on the feelings of prominence and status that higher prices signal to other people about the purchaser” (Lichtenstein et al., 1993).

Channels

Traditionally, baby boomers have shown an aversion to making purchases online. Despite their willingness to browse online first, over 80% would prefer to complete a purchase in-store.

They are more inclined to put effort into finding a local retailer, even when the product is available online (LoyaltyOne, 2016). Millennials differ from baby boomers in having a stronger 17 preference for both immediacy and convenience when shopping (Drenik, 2019), which is why online purchasing sites such as Amazon are extremely popular among millennials.

Overall, baby boomers can be characterized as in-store, price-conscious shoppers with high brand loyal preferences on entertainment and health spending. Millennials are less brand loyal, prestige-sensitive online shoppers who prefer to spend on experiential activities and education.

Attitude Towards Change

Shifts in generations’ work and personal values, lifestyle preferences, and consumption patterns reveal that change is inevitable. Each generation tends to have slightly differing attitudes towards change and reacts differently when presented with change. Baby boomers are thought to embrace the status quo and resist change more than millennials (Bourne, 2015). A 2016 study revealed that over 40% of baby boomers resist change; in contrast, millennials are more accepting of change, with only 8.2% agreeing they prefer to resist change (Ludviga &

Sennikova, 2016). This is not to say that the millennial generation wants, or prefers change, but rather they are able to adapt to change and are conscious of how a certain change can affect them in the long-run. For example, millennials have experienced the most workplace-related change, as organizations have changed drastically to implement technologies and new work practices

(Dawson & Andriopoulos, 2017). Millennials’ confidence and independence lead them to question ‘what’s next’ and have an open mindset in regards to change and new experiences.

18 Table 2. Characteristics by Generation

Characteristic Baby boomers Millennials Technology Usage Limited Tech-savvy, reliant

Work Values Live-to-work, workaholic Meaningful, work-to-live, work- life balance

Personal Values Self-perfection, personal Independence, self-reliance, gratification, status individuality

Lifestyle Preferences Suburban, leisurely travel Urban, prioritize travel

Consumption Patterns Type: entertainment, health Type: experiential, education Attitudes towards price: conscious Attitudes towards price: prestige Attitudes towards brand loyalty: sensitive high Attitudes towards brand loyalty: Method: in-store low Method: online

Attitude Towards Resistant Accepting Change

The six previously discussed characteristics provide a framework for understanding the characteristics of baby boomer and millennial generations. The next chapter discusses how each characteristic plays an influential role in whether or not an individual is likely to participate in the sharing economy.

19 Chapter 4

Generational Analysis of the Sharing Economy

My thesis proposes that an individual’s participation in the sharing economy is partly determined by his or her generation. Table 3 summarizes these influences, examining how generational differences influence consumer reactions to each defining characteristic of the sharing economy (i.e., merging the frameworks from chapters 2 and 3). Together, this analysis provides an account for why millennials have greater participation in the sharing economy than baby boomers. As will be seen, not all generational differences favor participation in the sharing economy by millennials over boomers, providing a more nuanced understanding of the drivers of participation.

Table 3. How Generational Differences Affect Consumer Reactions to Key Characteristics of the Sharing Economy

Sharing Economy Baby boomers Millennials Characteristic

Expanded Consumer Roles (+) Work Values (-) Work Values (-) Personal Values (+) Personal Values (-) Consumption Patterns (+/-) Consumption Patterns

Temporary Access (+) Work Values (-) Work Values (-) Lifestyle Preferences (+) Lifestyle Preferences (-) Consumption Patterns (+) Consumption Patterns

Transaction Facilitation: Reliance on Intermediary (-) Technology Usage (+) Technology Usage (-) Consumption Patterns (+) Consumption Patterns (-) Attitude Toward Change (+) Attitude Toward Change

Crowd-sourced Supply (+) Work Values (-) Work Values (+) Personal Values (+) Personal Values

20 Expanded Consumer Roles

The concept of participation within the sharing economy encompasses either being a facilitator or a user. The facilitator is an expanded role for consumers beyond traditional markets: the facilitator in the sharing economy provides the good or service to the user, receiving an economic benefit from the user for doing so. Hence, facilitators must own underused assets that are of value to others (e.g., renting out a summer home during the off-season), and sharing these assets provides a source of income (whether primary or secondary) (e.g., earning money after regular work hours as an Uber driver) (Eckhardt et al., 2019).

Baby boomers are expected to react positively to the facilitator role in the sharing economy due to their work values. One reason individuals choose to act as a facilitator within the sharing economy is to generate a second source of income (Dillahunt & Malone, 2015).

Generally speaking, baby boomers are more extrinsically motivated through work than millennials. Keen on the idea of an additional source of income, they are likely to participate in the sharing economy as a facilitator of temporary access of goods and services. Because older cohorts have begun retiring later (in 2019, one-third of baby boomers say they plan to retire in their 70s or “never” [Dolliver, 2019]), their feeling of wanting an ‘active retirement’ may be satisfied by using the sharing economy. Boomers may also be more likely to own the assets (e.g., homes, vehicles) necessary to participate in the sharing economy (Tabcum, 2019). One cautionary note, however, is that status is an important personal value of baby boomers and may influence their level of participation (as facilitators) within the sharing economy. For instance, baby boomers have traditionally viewed cars as a symbol of style, freedom, and prestige

(Williams, 2017). In cases such as Uber, facilitation by baby boomers is likely to be deterred to 21 maintain the symbol of status they desire. Providing an Uber ride places facilitators in a subordinate position to their customers.

In contrast, millennials prefer meaningful work and care less about the monetary benefits

(Leonhardt, 2019); in that case, they may be less likely to choose to facilitate within the sharing economy. However, the sharing economy does align with the personal values of independence and individuality of millennials. For example, the sharing economy provides flexibility: facilitators can determine their own levels of contribution at a time and place of their choosing.

For example, Uber drivers can choose when and where they operate and who they serve, while

Airbnb facilitators do not have to be present in order to facilitate the service. This flexibility should appeal to millennials because it provides them with a means to express their individuality and to be independent.

And ironically, while millennials place less importance on monetary benefits of work, they are still more financially constrained than baby boomers. The aspect of expanded roles may appeal to millennials who wish to have more financial security than their primary job and income can currently provide.

Temporary Access

Users participate in the sharing economy for several reasons: a) when they do not regularly have access to the desired good or service (e.g., an individual traveling for the weekend, looking for an apartment or condo to stay in); b) when they cannot purchase the good or service and thus rely on the sharing economy as a cheaper alternative (e.g., using ride-sharing services in the absence of owning a car); or c) out of personal preference, such as when the sharing economy 22 good or service offers more convenience (e.g., hiring a qualified individual to complete a task in the comfort of one’s home). The first two of these reasons align particularly well with the temporary access characteristic of the sharing economy.

As users, millennials should react more positively to temporary access than baby boomers due to their lifestyle preferences. A key differentiator between the two generations is that millennials are more inclined to live in densely populated urban areas. The average monthly rent tends to be cheaper in suburban neighborhoods compared to urban neighborhoods

(Whitaker, 2016). Generally, those living in urban neighborhoods are also more constrained by spatial needs. Consequently, millennials could be more inclined to use the sharing economy because of the practicality of accessing rather than owning. Similarly, those living in high-dense areas often share transportation expenses more so than in suburban spaces (Whitaker, 2016), giving millennials a reason to use ride-hailing services like Uber and Lyft with more frequency than baby boomers.

Likewise, millennials may be more receptive to temporary access than millennials because of their consumption patterns. Having access to a good or service temporarily is of benefit to those who have an inability to purchase it. In some cases, using the sharing economy may be more economically practical than owning. Millennials seem to be under more financial constraints than boomers were at the same age; indeed, many young millennials have recently graduated college and do not yet have a stable income, or savings allocated for the purchase of large assets such as a car (Elliot, 2019). Participating in the sharing economy (e.g., using Uber rather than purchasing or leasing a car) allows them to avoid these financial burdens until a later stage in life. 23 Higher financial constraints on millennials than boomers also contribute to a higher willingness to participate in the sharing economy. The sharing economy alternative to a hotel room is a house, condo, or apartment booked through Airbnb. In 2018, using Airbnb rather than booking a traditional hotel room in cities like New York was 1.5x cheaper per night (McCarthy,

2018). Furthermore, despite higher financial constraints, millennials not only travel more but also spend while traveling than baby boomers. On the average trip in 2018, millennials spent almost 60% more than boomers (Mueller, 2019). Because traveling presents more opportunities for participation within the sharing economy (i.e., having to use Uber in an unfamiliar place or rent an Airbnb during vacation), millennials will understandably demonstrate stronger participation. The combination of millennials’ lifestyle preferences and consumption patterns generate more of a need to participate in the sharing economy, a need stronger than that of baby boomers.

Transaction Facilitation: Reliance on Intermediary

The sharing economy is facilitated through some form of technology and millennials should be more receptive to this characteristic than baby boomers given their overall technology usage. Millennials are the first generation to believe technology is a “given” and that everything they do involves some aspect of technology, whereas boomers have not developed the same sense of reliance on technology (Williams et al., 2011). Moreover, those who participate in the sharing economy must trust that the technology itself will safely facilitate the financial transaction, without exploiting personal data or private information. Compared to millennials, baby boomers’ views regarding technology as an intermediary for transactions is skewed slightly 24 negative (eMarketer, 2019), and their fears of technological privacy (or lack thereof) may limit their participation. In 2019, only 40% of baby boomers agreed to trusting the sharing economy, compared to almost 70% of millennials (Allianz, 2019).

Consumption patterns should likewise lead millennials to favor the intermediaries used in the sharing economy over baby boomers. In 2019, more than 80% of millennials made at least one purchase online, compared to less than 60% of boomers (eMarketer, 2019). While baby boomers are increasingly purchasing online over the last decade, they still have a strong preference for in-store shopping (LoyaltyOne, 2016). For example, baby boomers are not as inclined to shop using a smartphone, which may be a deterrent to participating in the sharing economy.

Finally, attitudes toward change will also affect acceptance of technology-based intermediaries. Older generations tend to be more resistant to change, including the use of an intermediary platform for purchases due to its technological nature. 77% of baby boomers need assistance in learning how to use new technologies and thus are less likely to be familiar with the nature of the intermediary and will remain loyal to traditional channels (i.e.: offline transactions)

(Jone, 2016).

Crowd-sourced Supply

Work values may undermine the interest of millennials, compared to boomers, in serving as facilitators in the sharing economy. The supply of workers within the sharing economy is crowd-sourced, and facilitators in the sharing economy work independently without the presence of co-workers. For example, those who identify themselves as an ‘Uber driver’ or ‘Airbnb host’ 25 may certainly share common interests, but they often do not work alongside each other and do not collaborate. The close-knit work environment that evolves from co-workers' interactions in traditional firms (e.g., consultants consistently working as a team to deliver solutions to their client) is not present within the sharing economy. In 2018, 70% of millennials said they wanted to feel connected to the people they work with (Landrum, 2018). In this regard, millennials’ work values negatively affect their participation as facilitators in the sharing economy. Baby boomers, on the other hand, tend to be more distant while they work, and don’t necessarily engage with others while working (Hastwell, 2019). This could positively affect their participation in the sharing economy, having freedom to work independently.

In contrast to their work values, however, each generation’s personal values also positively affect their participation within the sharing economy. The crowd-sourced supply within the sharing economy is often accompanied by online rating systems and review mechanisms. Users evaluate their experience with the facilitator by providing a rating. In the case of Airbnb, hosts (facilitators) can become ‘Superhosts,’ provided they meet the requirements, including maintaining a 4.8/5 rating or above. ‘Superhosts’ generate more revenue and exclusive rewards not eligible to ‘hosts’ (Airbnb, 2020). Baby boomers participating as

Airbnb hosts can use such rating systems as a signal of both status and self-gratification.

Likewise, millennials’ self-reliance can lead them to prefer the crowd-sourced supply within the sharing economy. This aspect of the sharing economy allows millennials to work independently; to their liking, as they are less-than-likely to ask for help when needed (Williams & Page, 2011).

Overall, participation within the sharing economy has been predominantly comprised of millennials. This is due in part to their generational characteristics that are vastly different than 26 baby boomers. The next chapter will look into the marketing tactics of Uber and provide recommendations for how to successfully garner participation from baby boomers in the future. 27

Chapter 5

Uber Case Study

Uber has monopolized the sharing economy in the last decade. Its marketing strategies has allowed its success in the sharing economy, and it is necessary to understand the ways in which Uber has marketed themselves to become a top competitor. While their primary consumers have been those of younger generations, it is also crucial to understand the ways in which to attract older generations. Firms like Uber are losing a large segment of the market with marketing strategies directed towards younger generations.

Uber’s Brand Positioning

While Uber initially began as “tap a button, get a ride” (Khosrowshahi, 2019), it has now positioned itself as a global company “igniting opportunity by setting the world in motion”

(Uber, 2020). Uber realized from the onset that a diversified product offering would amplify their brand just as effectively as any marketing tactic. It has found a niche in an otherwise traditional industry, and captured many audiences in its product offerings of various vehicle types including cars, bikes, and helicopters (Table 4) (Majaski, 2019). Furthermore, Uber has built a brand around valuing individuals’ varied preferences towards convenience and price

(Table 5) (Uber, 2020).

28 Table 4. Uber's Product Offerings

Vehicle Type Description

UberX • Catch-line: Affordable, everyday rides • Private rides for 1 to 4 people; comfortable sedans; affordable prices UberPool • Catch-line: Together, we save • Affordable door-to-door rides; carpool with others in comfortable sedans; maximum 2 seats per request UberXL • Catch-line: Affordable rides for groups up to 6 • Fits your group of 6 riders (or extra luggage) comfortably; everyday prices; comfortable vans and SUVs Select • Catch-line: Premium rides in high-end cars • Stylish rides for 1 to 4 people; highly rated drivers; affordable prices UberBLACK • Catch-line: Our original ride option, UberBLACK offers a luxury experience • High-end black cars, professional drivers, great for business or date night WAV • Catch-line: Affordable rides in wheelchair-accessible vehicles where available • Fast, flexible rides; trips that fit your budget; specialized drivers to assist you Bikes & • Catch-line: Your ride – electrified Scooters • On-demand e-bikes and scooters; available on Uber Lux • Catch-line: Top-rated drivers in luxury vehicles • Luxury cars; professional drivers; our most stylish ride option Black SUV • Catch-line: Luxury rides for 6 with professional drivers • High-end rides for groups; professional drivers; luxury SUVs Taxi • Catch-line: Local taxis at the tap of a button • No cash necessary; track your ride Flash • Catch-line: One tap for 2 options: UberX and Taxis

Transit • Catch-line: Sometimes the fast lane is the bus lane • View transportation options; see the fastest public transit route; get public transit directions Copter • Catch-line: Fly past traffic • Time-saving; safe and seamless; reliable

29 Table 5. Price Differences Between Uber Vehicles

Type Description Base $/Minute + $/Mile Minimum Fare Fare

UberX Regular people or $2.55 $.035 per minute + $1.75 $7.00 professional drivers; per mile regular cars

UberXL Regular people or $3.85 $.50 per minute + $2.85 per $10.50 professional drivers; mile regular SUVs

UberBLACK Professional drivers; $7.00 $.65 per minute + $3.75 per $15.00 upscale cars mile

UberSUV Professional drivers; $14.00 $.80 per minute + $4.50 per $25.00 upscale SUVs mile

UberT Yellow taxicab $2.50 $.50 per ⅕ mile or $.50 per $2.50 requested through 60 seconds in slow traffic or Uber app when the vehicle is stopped

Uber’s Marketing Strategies

Inducing Trial

Uber capitalized on its geographic location during launch in San Francisco to induce trial of its services. It immediately targeted tech-based companies who frequently sought new products or services, and offered sponsorships for large gatherings (conferences for those in tech, etc.). In doing so, Uber not only spread awareness for their brand but also attracted many first time users by offering free rides and subsequent discounts (Hartmans & Leskin, 2019): some users received up to $20 for simply downloading the app (CB Insights, 2019). Some of its tactics to generate first-time drivers including advertising through conquest marketing (Figure 2). 30 Conquest marketing allows a company to pay to have their advertisement appear with competitors’ keywords (such as a competitor’s brand name) (Grinberg, 2016).

Figure 2. Example of Uber's Conquest Marketing

Referrals

Uber maintained its initial user base after its trial inducing tactics through its rider and driver referral programs (Uber, 2020). In general, many firms within the sharing economy rely heavily on such programs, which are forms of “stimulated WOM [word of mouth] that provide incentives to existing customers to bring in new customers” (Schmitt et al., 2011). WOM referrals significantly impact new customers acquisition (Trusov et al., 2009). Uber created its 31 referral program for both riders and drivers, accessible through its mobile application (Figure 3).

It can be assumed that Uber’s initial referral program has contributed to its significant growth in the ride-sharing industry, as 95% of users during Uber’s first few years learned of Uber through a friend (CB Insights, 2019). It's been just a decade since Uber’s launch, yet it has an average of

100 million users per month worldwide, and generated roughly $14 billion in net revenue in

2019 (Wagner, 2020).

Figure 3. Uber's Referral Program

Uber’s trial inducing and referral strategies both favor millennials more so than baby boomers. Millennials are more likely than boomers to be influenced by word-of-mouth advertising, and are also more likely to make a referral of a brand to someone of similar age or interests (Williams et al., 2011). 32 Social Media

Uber has heavily utilized media platforms to expand its user base. Because Uber is reliant upon technology to offer its services, it primarily targets tech-savvy individuals through digital media. It generates awareness through advertising on platforms such as Facebook (Figure 4).

While millennials are the most frequent users of social media platforms in general, baby boomers are still heavy Facebook users. In 2019, almost 70% of baby boomers have a Facebook account

(Clement, 2019). Accordingly, Facebook could be a promising channel to reach baby boomers.

Figure 4. Examples of Uber's Facebook Advertisements

Within social media platforms such as Instagram, Uber has further relied on influencer marketing to spread brand awareness (Figure 5). Influencer marketing uses individuals (known as opinion leaders, mavens, or influencers in marketing jargon) who shape the attitude and behavior of other groups of individuals around them (Galeotti & Goyal, 2009). 33 An overwhelming majority of younger generations (86%) have interests in becoming an influencer – getting paid to post sponsored content. Due to the nature of the platform,

Instagram’s influencers (and their respective posted content) are primarily of the millennial generation (Locke, 2019). Influencers traditionally post pictures or videos of themselves using the brand, product, or service. Uber partners with micro- and macro- influencers (categorized as having 10,000-50,000 followers, and 100,000-1M followers, respectively) (Ismail, 2018) to promote its brand. Likewise, the content is primarily promoted to those in the millennial generation who use Instagram. In 2020, Instagram’s users are predominantly of the millennial generation; and over half of its user base worldwide is aged 34 or younger (Clement, 2020). Only

23% of baby boomers say they either have an account or actively use Instagram (Clement, 2019).

Consequently, it can be assumed that through influencer marketing, Uber is not reaching those in the baby boomer generation. Advertising through Instagram favors those in the millennials generation because boomers are unlikely participants of Instagram. 34 Figure 5. Examples of Uber's Influencer Marketing

35 Traditional Marketing

Despite its heavy usage of digital marketing, Uber has also generated awareness through traditional marketing tactics with commercials and billboards. In various forms of traditional marketing, one of Uber’s primary selling points is the cost efficiency of its products compared to other offerings (Figure 6). Using the wording specifically to differentiate its services, Uber aims to capture the attention from those who traditionally use Taxi over Uber. It is interesting to note that in 2018, millennial U.S. adults used Taxi services (at least once in the past year) almost as frequently as baby boomers (8% and 11%, respectively) (Mazareanu, 2019). Uber is not only attracting baby boomers, but also millennials. The appeal to millennials is apparent in the aspect of cost-savings (with specific wording; i.e.: ‘cheaper’) while the appeal to boomers is more so in the advantage of using uber over taxis. In 2018, two-thirds of baby boomers say they had used

Taxis at least a few times in the past year (Mazareanu, 2019).

36 Figure 6. Examples of Uber's Traditional Marketing

Uber additionally relies on drip marketing to retain customers after initial acquisition.

Drip marketing is the umbrella term that describes marketing tactics in which a constant flow of material is distributed to customers, including the use of email and direct mail (Kenton, 2018)

(Figure 7).

In 2017, U.S. millennial e-mail usage increased by more than 50% from previous years

(Clement, 2017), and almost all baby boomers (95%) use email and consider it an integral part of 37 their lives (Rutigliano, 2017). In this regard, email marketing appeals to both generations, though most likely favors those in the boomer generation.

Figure 7. Example of Uber's Drip Marketing

Future Appeal to Older Generations

In order to remain at the forefront of the sharing economy, Uber needs to continue working towards attracting older generations. Their current advertising strategies have been wildly successful, but are targeted more towards millennials than any other generation.

Brand Positioning

Uber’s emphasis on price and convenience may be a considerate factor in why it has lacked participation from boomers. Not only is the variation in prices of Uber’s services 38 appealing to millennials (due to their financial constraints), but also the convenience factor.

Millennials are likely to be attracted to a brand positioned on convenience (Fromm, 2019).

Uber’s overall positioning – “Igniting opportunity by setting the world in motion” – is a core component of its brand that should appeal to many generations because of its broad, rather ambiguous meaning. Uber should further consider the various ways in which it can maintain its positioning, while simultaneously targeting different segments of consumers through its differentiated advertising tactics.

It may be to Uber’s advantage to emphasize other characteristics that the brand excels in an attempt to attract older generations. Chapter 4 discussed that a reason for baby boomers' lack of participation within the sharing economy could be due to their lack of trust in the transaction facilitation. Uber states that it was “built with safety in mind” (Uber, 2020). In addition to requiring driver screenings, background checks, and individual-specific information[2], Uber has many other features within the app that promote safety (Table 6). Uber’s website includes some of the following taglines: “Your safety drives us”, “Designing a safer ride”, “Ride with confidence.”

Targeting boomers through its positioning around safety, security, and trust may help

Uber generate participation from older generations who are skeptical of its logistics.

[2] Uber requires drivers to provide a license plate number, a vehicle make and model, and a self- identification photo at all times; visible to the rider upon ride confirmation within the app (Uber, 2020).

39 Product Offering

Uber can appeal to boomers by addressing concerns about privacy and security in the use of its mobile application. For example, Uber could redesign its mobile application to increase user anonymity and to provide stronger assurance regarding tracking of personal information.

Furthermore, Uber’s most commonly offered services are the UberX and the UberXL, whereas others such as UberBLACK are less frequently offered and not available in certain cities within the U.S.[3] (Uber, 2020). Some of the features of its upscale vehicles, like the appearance of UberBLACK, may appeal to boomers with personal values of status. Uber could likely generate participation from these individuals by increasing the availability of its higher-end vehicle types.

Table 6. Uber's Safety Features

Feature Description Phone number “The app makes phone numbers anonymous, so your anonymization personal information stays private.”

Share My Trip “Set up your Trusted Contacts and create reminders to share your trip with friends and family in real time.”

2-way ratings “Your feedback matters. Low-rated trips are logged, and users may be removed.”

Emergency assistance button “You can use the in-app emergency button to call 911 to get help if you need it. The app displays your location and trip details, so you can quickly share them with the 911 dispatcher.”

On Trip Reporting “If you feel unsafe while on a trip, you can immediately and discreetly report it to Uber. A member of our Safety Team will reach out for support shortly after the trip.”

[3] See table 4 and 5 for a comparison between vehicle types. 40 24/7 incident support “Our customer support team is specially trained to respond to urgent safety issues.”

Safety Toolkit “Access the Uber app’s safety features all in one place whenever you’ve requested a ride with Uber.”

GPS tracking “All rides on the Uber platform are tracked by GPS.”

RideCheck “Using sensors and GPS data, RideCheck can help detect if a trip goes unusually off-course or a possible crash has occurred. If the app notices such events, we’ll check in on you and offer resources to get help.”

Increase Traditional Marketing Tactics

It would benefit Uber to increase its traditional advertising strategies. Television is the most effective advertising channel to reach boomers, at 75% effectiveness, compared to only

22% for smartphones. With the use of its current referral types and social media, Uber’s advertising is not reaching boomer demographics. Furthermore, in 2019, 43% of baby boomers view TV advertising as the most effective source of brand discovery, compared to only 11% through social media (Guttmann, 2019). Consequently, in order to attract older cohorts, it is critical for firms such as Uber to expand their marketing strategies to include more traditional forms of marketing that baby boomers are more receptive to.

Email marketing ranks significantly higher than social media marketing in its effectiveness: nearly 40 times more effective than both Facebook and Twitter combined

(Aufreiter et al., 2020). Increasing advertising through email may be effective in continuing to generate boomers’ awareness of Uber’s services. Particularly, the content of its email marketing should either be constructed to target boomers (as social media marketing is limited to reaching 41 younger generations), or be segmented for different generations. For example, a majority of boomers (70%) enjoy learning about new products or services through videos (Rutigliano, 2017).

Within its emails, Uber could include attachments of traditional commercials. Other content could include a visual, step-by-step process on how to download and use the Uber app; to make a smooth transition for older, first-time users. Here, it has the potential to emphasize the aspects of its security and trust features, making it more appealing to older generations.

Increase Partnerships

If older generations are not typically using technology as frequently as millennials, they are presumably less likely to use the Uber app. In order to increase participation from boomers,

Uber should increase its partnerships with firms that traditionally have an older consumer base.

For example, in 2015, Uber partnered with AARP’s Life Reimagined’s[4] program to attract Uber drivers (Uber, 2015).

Uber has taken similar steps to expand its product offerings to be of more appeal to older generations. In 2017, Uber launched UberHealth, partnering with healthcare organizations to increase accessibility to healthcare services, for both patients and providers. Working with patients through the app, healthcare providers book rides (on-demand or for a date in the future), and the patient receives multiple notifications (i.e.: when the ride is booked, when the driver is on the way, etc.) (Uber, 2020).

[4] Life Reimagined is a subsidiary of AARP that offers information, online services, and other resources to those in retirement, helping them navigate a new life stage and connect to others with similar experiences (Zimmerman, 2013).

42 In general, partnerships of this nature increase the ease of accessibility of Uber’s services for older generations. Partnerships allow Uber to capitalize on an unmet market of future riders and drivers without compromising its current participant base.

Case Summary

Uber has dominated its competition within the sharing economy by optimizing on its mobile marketing as well as its multi-platform presence. Through its positioning and various marketing strategies through media, it has primarily received participation from the millennial generation. Uber’s continued success can be heightened in the future if it capitalizes on the apparent opportunities for expanding its consumer base to older generations. 43

Chapter 6

Conclusion

The sharing economy presents unique opportunities for strangers to share under-used resources with each other. Currently, participation within the sharing economy is primarily composed of those in the millennial generation. Generational characteristics, within categories such as technology usage, values, and consumption patterns, have separated millennials and boomers from each other, giving them significantly different preferences and behavior patterns.

Millennials overtook baby boomers as the largest population demographic in 2015 (United States

Census Bureau, 2015), yet boomers continue to follow closely behind as the second-largest cohort. As the sharing economy continues to expand, following its current projections for 2025 and beyond, it is likely that boomers’ participation in the sharing economy will eventually follow.

Future of the Sharing Economy

The sharing economy’s growth in the last decade presents a threat of disruption to traditional marketplaces. Uber and Airbnb are two firms that have completely transformed the traditional transportation and lodging industry, respectively. It is likely that future expansion within the sharing economy will be evident by the penetration into other industry sectors that are currently underrepresented in the sharing economy.

For instance, ‘non-traditional’ healthcare services have increased in popularity in the past decade, as technology now allows virtual health appointments and other on-demand services 44 through telecommunications technologies (Accenture, 2019). Included in the ‘non-traditional’ healthcare classification is Pager, a mobile application that brings together doctors and patients to deliver healthcare services; similar to how Uber brings together drivers and riders. While there are few healthcare firms within the sharing economy in 2020, healthcare represents a huge portion of the nation’s spending: in 2018, the nation spent just under $4 trillion, and this figure is projected to grow to $6 trillion by 2027, to represent almost 20% of the economy (Rosenberg,

2019).

Another example lies within the sector of freelance work. Launched in 2008, Taskrabbit is an online service that matches handymen with individuals seeking help with home projects and miscellaneous tasks such as furniture or appliance assembly (Taskrabbit, 2020). Such firms may naturally appeal to boomers from both the producer side (i.e., for those looking to stay active during retirement) as well as the consumer side (i.e., those looking for assistance with the completion of at-home tasks).

Marketing Implications

As the sharing economy becomes more saturated, with both competitive firms and more diversified consumer bases, it is imperative that marketers understand differentiated consumer behavior patterns of their targeted consumer segments. It is also critical for marketers to understand how to attract those who may be less inclined to switch from participating in traditional marketplaces to those within the sharing economy.

My thesis has focused on the sharing economy’s appeal to both the millennial and baby boomer generations. However, a more comprehensive understanding will evolve from an 45 analysis of all generations’ receptiveness to the sharing economy. For instance, born from 1997 onward, generation Z grew up during the sharing economy’s development. Succeeding generation Z is generation Alpha, born from 2012 onward. Understanding how such generations might react to the sharing economy is worthy of marketers’ consideration in the coming years.

46

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ACADEMIC VITA

SOPHIA P. KONTRA [email protected] EDUCATION The Pennsylvania State University | Schreyer Honors College University Park, PA Smeal College of Business | B.S. Marketing Graduation: May 2020 College of Liberal Arts | Minors in Economics & Spanish

The University of Seville, Spring 2019 Seville, Spain

WORK EXPERIENCE J.P. Morgan Chase & Co. New York, NY Retirement Insights Analyst May – Aug 2019 • Created interactive website compiling 800+ survey responses from key decision-makers of Defined Contribution plans • Edited and published Multi-Asset Solutions strategy reports from global investment writers sent to 1000+ employees • Analyzed competitors’ participant communications, conducting a SWOT analysis to provide recommendations to JPM DLL Financial Services Wayne, PA Portfolio Management Officer May – Aug 2018 • Handled daily financial communication and requests with customers while maintaining company profit targets • Increased company productivity by keeping delinquency rates under 2.5% for the first time in 2018 Penn State Economics Department University Park, PA Economics 102 Teaching and Grading Assistant Sep 2017 — May 2020 • Organize and grade assignments for over 650 students on a weekly basis with close attention to details and accuracy • Communicate with lead professor in order to identify objectives and goals within the subject material Sundae Best Ice Cream Parlor Avalon, NJ Summer Job Summer 2013 — Summer 2018 • Interacted with customers and employees on a daily basis to uphold company’s vision and culture • Created and managed time schedules to maximize employee satisfaction and minimize overutilization LEADERSHIP EXPERIENCE Schreyer for Women University Park, PA The Pennsylvania State University Fall 2017 – May 2020 • Leveraged network of peers by engaging in discussions & workshops purposed to better identify professional goals and align strengths as a woman in the honors college Leadership JumpStart University Park, PA The Pennsylvania State University Fall 2016 • Developed, advertised, and facilitated an entirely student-run 4-month service project raising $600 of charitable funds • Lead professional events and interacted with university and community leaders to identify professional interests Alpha Xi Delta, Academic Assistant; Composite Chair Coordinator University Park, PA Beta Lambda Chapter Fall 2017 – May 2020 • Managed academic records of 200 chapter members; created excel sheets to document the academic point system used to ensure the chapter met GPA requirements; engaged with members to develop professional study habits • Sustained communication with professional photographing services to retain composite service; collected and managed internal funds to establish a budget for use within the organization VOLUNTEER EXPERIENCE

Me to We Service, Participant Ecuador, Summer 2015 • Aided in design and construction of freshwater irrigation system; leveraging communication abilities in Spanish Bethel Academy, Volunteer Tutor Philadelphia, PA, 2012 – 2016 • Assisted elementary and middle school aged youth in applied Spanish, English, and Math classes SKILLS & AWARDS Honors: Dean’s list each semester, Schreyer Honors Scholar Academic Scholarship Athletics: Former 3-season varsity high school athlete, Co-Captain of both Varsity tennis and basketball, PIAA 2013 Girls’ Lacrosse State Champions, PIAA 2015 Girls’ Tennis Semifinalists Computer: Proficient in Adobe; Microsoft Office: Excel, PowerPoint, Word, iMovie