BUSHOR-1339; No. of Pages 9

Business Horizons (2016) xxx, xxx—xxx

Available online at www.sciencedirect.com ScienceDirect

www.elsevier.com/locate/bushor

What managers should know about the sharing economy

a b b,

Mohammad Reza Habibi , Alexander Davidson , Michel Laroche *

a

Mihaylo College of Business & Economics, California State University, Fullerton, 800 N. State College

Blvd., Fullerton, CA 92831, U.S.A.

b

John Molson School of Business, Concordia University, 1455 de Maisonneuve Boulevard W., Montreal, QC

H3G 1M8, Canada

KEYWORDS Abstract The phrase ‘sharing economy’ has grown to become an umbrella term for

Sharing economy; a wide range of nonownership forms of consumption activities such as swapping,

Economic continuum; bartering, trading, renting, sharing, and exchanging. In spite of such a wide spectrum

Reciprocal business; of behaviors, there is limited practical knowledge about how individual sharing

Sharing economy economy practices should be managed. Building on a framework that categorizes

examples; sharing economy practices based on their detailed characteristics, this article

Airbnb business model; provides extensive recommendations to managers and practitioners. The article

Collaborative argues that each practice is a hybrid of sharing and exchange, and provides several

consumption; recommendations based on the nature of each practice’s offering.

#

Peer-to-peer economy 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All

rights reserved.

1. The paradox of sharing in a sharing has experienced an annual growth of 100%. It

economy currently serves approximately 900,000 members

with more than 10,000 vehicles in urban areas

and colleges across countries such as the U.S.,

Zipcar, a sharing company that brands itself as an

U.K., Canada, and Turkey (Zipcar, n.d.). It contrasts

alternative to the costly, consuming, and environ-

itself from established and traditional car rental

mentally degrading of car ownership, is

agencies by matching many of the criteria of a

perhaps one of the prime symbols of what has grown

sharing economy practice. Specifically, it offers

to become the sharing economy (Bardhi & Eckhardt,

consumption through pooled resources and social

2012; Botsman & Rogers, 2010). Since its inception,

collaboration, and promotes community building

while alleviating environmental concerns by offer-

ing car sharing as a more sustainable practice.

* Corresponding author

Ironically, consumers do not regard Zipcar as the

E-mail addresses: [email protected] (M.R. Habibi),

alternative it claims to be. Research shows that

[email protected] (A. Davidson),

[email protected] (M. Laroche) Zipcar members neither look for community bonds

0007-6813/$ — see front matter # 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.bushor.2016.09.007

BUSHOR-1339; No. of Pages 9

2 M.R. Habibi et al.

nor have the desire to share communal links with communal links and socialization. Below we elab-

other members. Environmental and political con- orate on the framework and provide detailed sug-

cerns and socialization were also not among the gestions for managers.

priorities of consumers using Zipcar’s services

(Bardhi & Eckhardt, 2012). In short, Zipcar customers

were solely interested in the accessibility offered by 2. Nonownership consumption:

this ‘sharing’ practice. Moreover, cost savings are Is it really about sharing?

revealed to be the main motivation for consumers

who joined sharing economy practices such as Zipcar As the sharing economy continues to grow, many

(Lamberton & Rose, 2012). These findings indicate different market practices are trying to capitalize

that either Zipcar’s efforts in promoting the business on the values intrinsically connected with the term

as a sharing economy practice are not effective or sharing. Notably, a careful analysis of many of

consumers simply have difficulty perceiving it as a these practices leads to the conclusion that they

sharing alternative. are actually far from the concept of sharing. A more

Since the boom of the sharing economy that appropriate descriptor for them is what Belk (2014,

followed the financial collapse of 2008, the neces- p. 7) refers to as ‘pseudo-sharing,’ which he defines

sity to reduce customer costs combined with tech- more specifically as a ‘‘phenomenon whereby

nological advances created a synergy prompting commodity exchange and potential exploitation of

firms and consumers to find creative ways to con- consumer co-creators present themselves in the

sume through pooling and sharing resources that guise of sharing.’’ Consider two sharing economy

would otherwise be left idle. As such, numerous practices that assist passengers travelling short or

practices coined under the umbrella term ‘sharing’ long distances. The first, , is a Canadian-

began to emerge. As of 2015, the sharing economy is based ridesharing network platform that pairs

worth about $15 billion and it is estimated to grow to drivers with passengers and currently serves over

$335 billion within 10 years (PricewaterhouseCoopers, 350,000 members (Vachon, 2016). Kangaride follows

2015). Today, a large number of businesses operate a peer-to-peer sharing model in which ordinary

by pooling many different kinds of resources such drivers share their extra seats while going on a trip.

as time, skills, jewelry, and even wi-fi networks. The Kangaride platform allows drivers to post infor-

Almost all of them build on the positive aspects mation about their trips such as date and time,

of the sharing economy and aim to exploit consumer destination, and other relevant information, and

co-creation in order to create value for the firm then allows would-be passengers to read the infor-

as well as consumers (Belk, 2014). Despite their mation and request to share rides. Although the

attempts to label themselves as sharing models, platform supervises the whole matchmaking pro-

these enterprises vary widely as to the nature of cess, the informal aspects of ridesharing can guide

their ability to offer a sharing alternative. Thus, it cooperative behavior and establish friendships

is important for managers and marketers to under- among members. The second practice, the afore-

stand how and when a practice falling under the mentioned Zipcar, acts directly as a third-party

veil of the sharing economy should promote values, mediator between members who never come into

such as community building and social collabora- contact with one another. Members share the

tion, and when it should focus on less sharing- vehicles but not at the same time and therefore

related attributes. lack any sense of community or collaboration with

This article provides a practical framework to one another.

answer these questions and helps resolve these While both practices share similarities–—such as

inconsistencies. The framework provides a - the use of pooled resources and the use of online

map for what to do and what to avoid based on the platforms to arrange payments, place reservations,

specificities of each type of sharing economy prac- and implement rating systems–—they can reasonably

tice. Our main argument is this: even though most be distinguished by the actual degree of sharing

practices are called sharing or are promoted as involved in the customer’s experience. The Kangar-

sharing, they have varying degrees of true sharing ide experience consists of communal bonding among

characteristics in their nature. Those with a low members, with barely any profit-seeking motivation

degree of sharing (pseudo-sharing) are more simi- (i.e., drivers typically ask for compensation to pay

lar to exchange practices and should mainly follow for gas) and no explicit expectations of reciprocity.

the market norms of supply, demand, and efficien- In contrast, Zipcar offers a private experience with

cy. Those with a high degree of sharing, on the selective pricing schemes and nonexistent interac-

other hand, are better able to build on consumer tions among members. It is worth asking if Zipcar

co-creation and positive sharing values such as should even fall under the sharing economy lexicon

BUSHOR-1339; No. of Pages 9

What managers should know about the sharing economy 3

when it better fits the category of practices that can continuum that helps distinguish the degree to

be described as a ‘‘business relationship masquerad- which actual sharing is being offered.

ing as communal sharing’’ (Belk, 2014, p.11).

This misuse of the sharing concept has resulted in

confusion over semantics that can result in detri- 3. The sharing-exchange continuum

mental outcomes for managers and practitioners as

they might misallocate firm resources (Habibi, Kim, The sharing-exchange continuum was developed for

& Laroche, 2016). For instance, Zipcar allocates the purpose of mapping any sharing economy prac-

many of its precious marketing resources to build tice in order to determine how much nonownership

a sharing community with the hope that the com- forms of consumption consist of sharing-related

munity will help sustain and grow the business. attributes (Figure 1). To implement the continuum,

Zipcar sends newsletters with the aim of community a practice is rated based on a number of sharing- and

building and hosts events to encourage members to exchange-related characteristics extracted from

get closer to each other, attempting to build some Belk (2007, 2010), descriptions of which are provid-

sort of culture and traditions that will provide con- ed in Table 1. A sharing score is then calculated,

sumers with a sense of common identity. All of these enabling practitioners to observe exactly where

efforts require large marketing resources and, ac- their practice falls on the continuum among other

cording to research and consumer statements, these enterprises. Habibi et al. (2016) used these charac-

efforts are not effective (Bardhi & Eckhardt, 2012). teristics to measure the sharing scores of various

Community building efforts are perhaps strategic practices on a five point Likert scale. That is, after

mistakes caused by trying to identify the business as reading a description of a nonownership consump-

a sharing practice rather than understanding it more tion practice, a sample of participants rated each

as a collaborative service. characteristic. A sharing score was then calculated

The term sharing has become so ubiquitous on by extracting the mean score for each practice.

social media websites and especially with services Referring to the continuum and the table gives us

offered through the sharing economy that it has a powerful tool to distinguish between sharing

arguably lost its meaning (John, 2013). It is almost economy practices. For practical purposes, three

impossible to go online and not share something, categories are designated within the continuum

whether it be a video, an image, or a random (see Figure 1). Zipcar falls close to the exchange

thought. The thin line between online presence dominant side of the spectrum; it possesses more

and the act of sharing facilitates the blurring of exchange-related attributes than sharing-related

services offered by different sharing economy characteristics. Specifically, Zipcar is profit-

practices. While this may seem trivial, distorted oriented, does not produce social links or relation-

views of the various sharing economy practices can ships, and requires the calculation of everything

lead to detrimental outcomes for managers who from mileage to prices. These are all main charac-

promote themselves as anti-commerce sharing, teristics of exchange. On the other hand, there is

but in reality are simply profit-seeking enterprises some dependency among members when using the

(Wittel, 2011). as they have to keep them in a good condition

Distinguishing pseudo-sharing from pure sharing and bring them back in time for the next member.

tackles the problem of semantic confusion along the Hence, Zipcar does not exemplify a purely

lines of profit motives, community bonds, and rec- exchange-based service and this small degree of

iprocity expectations (Belk, 2014). This dichotomi- ‘sharing’ is what enables it to be classified as a part

zation falls short, however, of capturing all the of the sharing economy. This analysis helps to clarify

varying differences between practices labeled un- why Zipcar has not been effective in persuading its

der the sharing economy. A number of practices members that they are part of a real sharing com-

encompass traits of each category and should be munity. On the other hand, Couchsurfing Interna-

recognized as a combination of both sharing and tional, a free peer-to-peer hosting community, is

exchange systems. For example, Airbnb providers located more toward the sharing dominant side of

are concerned with profit motives while they simul- the continuum. Money is irrelevant in this commu-

taneously take advantage of the communal bonding nity, expectations of reciprocation are minimal,

aspects afforded to them when they offer their members display communal bonding behaviors,

services. Both guests and providers engage with and there is no calculation of exchanges.

one another and, aside from financial compensa- Between the two ends of this continuum lie

tion, other forms of reciprocation often emerge. To numerous sharing economy practices that simulta-

better differentiate sharing economy practices, neously carry varying degrees of sharing and ex-

Habibi et al. (2016) suggest a sharing-exchange change characteristics. Those with a fairly

BUSHOR-1339; No. of Pages 9

4 M.R. Habibi et al.

a b

Figure 1. The sharing/exchange continuum with scores

a

Adapted from Belk (2007, 2010)

b

From Habibi et al. (2016)

Table 1. Characteristics of sharing versus exchange

Sharing Exchange Description

Nonreciprocal Reciprocal Reciprocation is not expected in sharing but it

is an important element of exchange

Social bonds No social bonds Sharing creates some sort of social bonds but

this is not necessarily the case in exchange

Joint ownership No joint ownership In sharing both parties feel responsible toward

the object being used (feelings of joint

ownership) but this is not the case in exchange

Money irrelevant Money relevant Sharing does not require transfer of money but

exchange does

Dependent Independent Consumption through sharing depends on other

people involved but exchange is independent

Similarity to real sharing Similarity to exchange

Social reproduction Lack of social reproduction Sharing produces social capital and links,

exchange usually does not

Singular Nonsingular Objects are singular in sharing but not in

exchange

Money not important Money important Money is important in exchange but there is a

lack of money exchange in sharing

Lack of calculation Calculation Precise calculation is a property of exchange

BUSHOR-1339; No. of Pages 9

What managers should know about the sharing economy 5

balanced proportion of each can be referred to as prevent common mistakes, hopefully acting as

dual-mode practices (Habibi et al., 2016). Airbnb a suitable guide for practitioners and scholars

is a good example of a dualistic practice as it interested in better conceptualizing the sharing

contains mixed characteristics. It is profit- economy.

oriented but it also creates social bonds. It is

reciprocal while at the same time dependent on

members and their collaboration. It requires that 4. What to do? Implementing the

providers and guests calculate their length of stay sharing-exchange continuum

and their financial compensation, but it is not

as rigid as other more exchange-based practices The main use of the sharing-exchange continuum is

(e.g., Zipcar). Uber is also similar to Airbnb even to measure where a business model falls and then to

though it is in a different industry, specifically, adjust strategies and propositions accordingly. This

transportation. Using Uber, ordinary drivers provide can be accomplished by calculating the sharing

a ride to passengers through the Uber app and in score as described above (for more details see

return receive a monetary compensation. The whole Habibi et al., 2016). Note that most practices are

process of passengers finding and paying for a ride is dualistic. That is, they carry characteristics of both

done through the app. Uber also ensures the security sharing and exchange at the same time but to

of the passengers by checking the background different degrees. The sharing score helps identify

of the drivers. Although monetary exchange is the location of the business model on the continu-

salient and interactions are short, Uber has some um. Below we provide separate managerial recom-

characteristics of sharing as it requires peers to pool mendations for practices falling into one of the

and share resources and facilitates social interac- three sections on the continuum as shown in

tions among drivers and passengers. Also, each car Table 2 and illustrated in Figure 1.

and driver is unique, which makes for a unique

experience for the passenger. Uniqueness is a char- 4.1. Recommendations for practices close

acteristic of sharing rather than exchange practices to the sharing side

(Belk, 2010).

Airbnb, Uber, and similar practices strengthen If your practice falls closer to the sharing side of the

the argument that dichotomization of the sharing continuum (sharing score approximately between

economy into pseudo-sharing and sharing is incom- 3.5 and 5), the characteristics of the service you

plete as many practices are dualistic in nature and offer encompass greater sharing-related attributes

do not completely fall on either side of the continu- similar to Couchsurfing, which has a sharing score of

um. The sharing-exchange continuum clearly helps 3.95/5 (Habibi et al., 2016). In this context, not only

practitioners and researchers capture the true na- is the usage of the term ‘sharing’ legitimate but

ture of each specific practice within the sharing members also feel that they are in a real sharing

economy domain. Current research, however, is environment. Practices that fall in this range should

limited in regards to use of the continuum in pro- endeavor to promote the sharing-related attributes

viding relevant and practical advice for managers. that distinguish them from more traditional

In this article, we provide some advice that can exchange-based services. This context is ideal for

Table 2. Summary of recommendations to managers in the sharing economy

If you fall toward the If you fall in-between If you fall toward the exchange side

sharing side

Sharing score* 3.5 — 5 2.5 — 3.5 1 — 2.5

‘Sharing-practice’ ‘Dual-mode practice’ ‘Pseudo-sharing practice’

Recommendation 1 Do not stop community Encourage community Deprioritize community

growth building building

Recommendation 2 Emphasize socialization Improve efficiency and Emphasize efficiency and

utilitarian value utilitarian benefits

Recommendation 3 Emphasize sustainability Emphasize anti-industry Do not focus on sustainability

motivations and political concerns

Recommendation 4 Avoid calculations and Minimize the degree of Emphasize calculated benefits

references to money calculations

Note: These numbers are approximate; there are no definitive boundaries distinguishing these practices (see Belk, 2010, for more

details on prototype-based definitions).

BUSHOR-1339; No. of Pages 9

6 M.R. Habibi et al.

building and developing a community. In this 4.1.3. Emphasize sustainability

section, we provide more details on our recommen- Practices possessing sharing-related attributes are

dations. perceived as part of a cluster of businesses that

promote ethical standards and advocate politically

4.1.1. Do not stop community growth correct consumption behaviors. Consumers who

Managers should be careful not to engage in business consider participating in sharing practices likely

activities that inhibit the community from growing demonstrate and engage in pro-recycling behavior,

and instead should largely focus their efforts on energy-saving habits, organic product shopping, and

strengthening bonds among members. Specifically, promotion of local businesses (Hellwig et al., 2015).

they should avoid strategies that distinctly monetize Participants of sharing-based practices are known to

their services or change the peer-to-peer nature of reveal strong intentions for sustainable consump-

the practice. Monetizing services can damage the tion (Bardhi & Eckhardt, 2012). Sharing and sustain-

legitimacy of a nonreciprocal relationship, which in able consumption are inseparable objectives for

turn weakens the sense of community. Couchsurfing such types of members, which indicates that these

made this mistake when in 2010 it began charging aspects should go hand-in-hand when promoting a

providers as well as guests a verification fee and, as practice’s offerings. Managers should emphasize the

a result, many devoted members with strong and environmental benefits being offered by the prac-

established community bonds reacted negatively tice as well as the contribution each member is

(Belk, 2014). Sharing-based practices should with- likely to make toward sustainable outcomes if they

draw as third-party mediators and decrease their choose to participate.

level of intrusion so that communities grow organi-

cally, therefore enabling members to create authen- 4.1.4. Avoid calculations and references to

tic social bonds and connections (Belk, 2010). It money

should be noted that since the majority of commu- One of the characteristics of sharing is the lack of

nity building occurs online and on social media, calculation of the product and/or services being

the unique aspects of such communities should be exchanged. That is, participants do not record

carefully considered (Habibi, Laroche, & Richard, transactions or directly calculate what is given

2014a). and what is received. After participation, if mem-

bers feel indebted to one another, they are likely to

4.1.2. Emphasize socialization continue the act of sharing (Belk, 2010). Although

Practices falling closer to the sharing side of the Couchsurfing suggests that guests prepare a meal or

continuum can be attractive to consumers for many bring small gifts for their hosts, it does not keep a

reasons but inherent to most is the experience they record of transactions or calculate exchanges. While

offer. Peer-to-peer sharing (e.g., couch surfing, managers may feel that member participation is

clothes lending) involves an experience with a large motivated by opportunities to reduce costs and save

social component. Research indicates that experi- money, there is no indication that this is the case.

ential consumption is inherently more social than Actually, the degree to which an individual is gen-

material consumption, resulting in greater affec- erous indicates a greater likelihood that they will

tive value (e.g., Nicolao, Irwin, & Goodman, 2009; participate in sharing activities. Moreover, the goal

Van Boven, 2005; Boven & Gilovich, 2003). of saving money is an extrinsic motivation that has

Sharing engenders positive emotions because it little or no bearing on the consumer’s desire to share

makes people feel like they are doing a good deed (Hellwig et al., 2015). For sharing practices with few

(Hellwig, Morhart, Girardin, & Hauser, 2015). Mem- or no expenses, managers are advised not to pro-

bers participating in sharing practices are likely to mote the parsimonious aspects of their offering but

expect a large degree of socialization. Further- rather to emphasize the communal and ethical

more, they expect to derive happiness from this facets in order to attract more members.

socialization and communal bonding. Positive social

experiences would further motivate consumers to 4.2. Recommendations for practices close

engage in additional experiences as they seek to to the exchange side

further consume this ‘conceptual commodity’

(Ariely & Norton, 2009). Through indirect involve- Exchange characteristics are in many cases just the

ment, managers can facilitate the ways members opposite of sharing characteristics. Practices with

convene as demonstrated by the Couchsurfing plat- low sharing scores (approximately between 1 and

form, which allows members to create events and 2.5) strongly exhibit exchange characteristics

invite both locals and travelers so that they can such as balanced transactions, the importance of

meet and socialize. money, and the lack of social and communal bonds.

BUSHOR-1339; No. of Pages 9

What managers should know about the sharing economy 7

Regardless of whether or not such practices are value consumers receive (Bettencourt, Brown, &

labeled under the guise of sharing, consumers are Sirianni, 2013).

likely to expect more formal business transactions

unlike the nonreciprocal, community building as- 4.2.3. Do not focus on sustainability and

pects of those that are more sharing-based. Here, political concerns

traditional service values and service marketing For Zipcar, attempts to focus on the environmentally

(Fine, 2008)–—such as quality and satisfying consum- friendly aspects of the practice failed to obtain

er needs in an efficient way–—matter the most. For positive reactions from consumers. Customers who

example, Zipcar, with a sharing score of 2.32/5 do not seek sharing-related attributes such as com-

(Habibi et al., 2016), benefits more when they focus munal bonding or socialization are also not likely to

on service quality than on community building. be concerned with a practice’s efforts towards sus-

Similarly, more exchange-based practices should tainability or political orientation (Sheth, Sethia, &

avoid associations with the concept of sharing as Srinivas, 2011). Research shows that emphasizing

research shows that this can lead to detrimental such concerns has limited value for consumers in this

outcomes since consumers are aware that they are context (e.g., Bardhi & Eckhardt, 2012; Lamberton

not practicing real sharing (Chen, 2009). In this & Rose, 2012). Managers should not attempt to

section we provide more detailed managerial rec- improve the benefits of their practice though sus-

ommendations. tainability or socially responsible efforts, but in-

stead maintain their focus on the efficiency and

4.2.1. Deprioritize community building utilitarian benefits of their offering.

Zipcar is an example of an exchange-oriented shar-

ing economy practice that has tried to engage in 4.2.4. Emphasize the calculated benefits

community building among its members but has not In exchange-oriented contexts, the selection pro-

succeeded. Although the company invested greatly cess for most customers is guided by the core value

in trying to build a brand community, its members they receive from the offering. They would switch

are generally not interested in this type of engage- over to another competitor who offers better value

ment (Bardhi & Eckhardt, 2012). This is primarily for the money and other cost saving benefits (e.g.,

because Zipcar users do not feel a sense of attach- the time they have to spend to get the service, the

ment or identification with the car. Its value is amount of effort they have to exert to be part of the

ephemeral and once the service transaction is com- program). To enrich customer participation, man-

pleted there are no feelings or desires to maintain or agers should emphasize tangible values that cus-

build communal bonding with other members. No- tomers receive as well as the cost efficiency of

tably, Zipcar was unsuccessful when it encouraged involvement in their particular practice. As such,

its drivers to wave as they pass each other on the for more exchange-based practices, managers

road, demonstrating that members are not socially should promote the parsimonious aspects of their

motivated to use its services. offering as opposed to emphasizing those that are

more communal and ethical.

4.2.2. Emphasize efficiency and utilitarian

benefits 4.3. Recommendations for dual-mode

At the core of an exchange-based practice’s of- practices

fering is the solution it is providing to its custom-

ers and the job it gets done for them. Specifically, In the mid-range of the sharing-exchange continuum

consumers are seeking access to a product or (sharing score approximately between 2.5 and

service as efficiently as possible. In this context, 3.5), characteristics of each side can carry signifi-

customers calculate what they receive and their cant weight in the minds of consumers. While man-

goal is to gain more utility in satisfying their agers may feel this gives them freedom to promote

needs. Improved satisfaction is achieved through both the sharing- and exchange-related components

convenience, efficiency, and, most importantly, of the service, it is argued that such efforts should

access. It would be more efficient for firms such be carefully scrutinized. For example, Airbnb,

as Zipcar to spend their resources contributing to a practice falling in this range with a sharing

their efficiency and the values consumers receive score of 3.14/5 (Habibi et al., 2016), acts as a

from the service instead of focusing their efforts third-party mediator by charging guests and paying

on non-exchange-related aspects such as sociali- their hosts but it still offers services with strong

zation. By focusing on what consumers would like sharing-related attributes. Among Airbnb members,

to achieve and furthering service , firms there is a sense of community, and social connec-

can also develop improved solutions to expand the tions are often created and continue over time. It

BUSHOR-1339; No. of Pages 9

8 M.R. Habibi et al.

is not unusual for hosts to generate a friendly atmo- Airbnb encourages guests and hosts to keep the

sphere and engage with their guests in and outside transactions unbalanced by way of gift giving or

of their residence. In this section we recommend helpful acts such as providing guidance and sociali-

managers develop strategies that cater to both the zation. Calculations with the goal of extracting

sharing and exchange aspects of the dual-mode maximum consumer surplus are common from cor-

practice. porations when exchanging with consumers, a be-

havior against sharing values (Grover & Ramanlal,

4.3.1. Encourage community building 1999).

A strong sense of community is likely to encourage

member participation as dual-mode practices still 4.3.4. Emphasize anti-industry motivations

counter traditional business models. An emphasis on Uber provides an example of a dual-mode practice

community building may not yield results as strong that competes directly with a traditional business

as those with more sharing-related practices, but it model (i.e., taxis). As a result, Uber passengers are

can foster the pro-social benefits of participation known to reveal some anti-industry motivations

that many members seek to obtain. Can the Airbnb when participating (Habibi et al., 2016). For other

community emulate the connectivity of the practices in this context, managers should properly

Couchsurfing community? Not likely. But Airbnb distinguish their offering from traditional business

certainly encompasses greater social bonding in models which can be accomplished by avoiding play-

comparison to more exchange-related practices ing a large role in the exchange of transactions.

such as Zipcar. For dual-mode practices, an empha- Marketing communications should be guided by

sis on community building is likely to be effective as demonstrating that the practice provides an alter-

it will create more value for customers seeking not native to traditional industries and therefore par-

only a solution to their need but also an experience ticipation is detrimental to traditional competitors.

attached to it. A strong community will increase

consumers’ trust and loyalty (Habibi, Laroche, &

Richard, 2014b). 5. Conclusion

4.3.2. Improve efficiency and utilitarian Due to the burgeoning success of the sharing econo-

values my, nonownership forms of consumption have strong-

While customers are likely to be receptive toward ly increased. There persists a confusion that leads

aspects of socialization, such as getting to know and managers and academics to misuse the term ‘shar-

even becoming friends with providers of the service, ing’ and label all business models within the sharing

their main consumption goal is the actual product or economy as pure sharing practices. Based on recent

service being offered and not the experiential as- research, this article argues that managers should be

pects such as social bonding. If the main purpose of careful about promoting and assimilating sharing-

consumption is satisfied, the sharing-related attrib- related attributes as their practice may not be con-

utes of the practice will likely be more readily strued in the same manner as those that can be

adopted and can be employed to create additional defined more strictly as sharing. Managerial actions

value for customers. Therefore, it is important to should be congruent with the nature of the practice

prioritize making the practice efficient and improv- being managed. For instance, community building

ing the utilitarian value consumers receive before initiatives, which require significant time and re-

allocating resources toward socialization. source investments, are less likely to be effective

in business models that are less similar to sharing and

4.3.3. Minimize the degree of calculations exhibit more exchange characteristics.

It is interesting to realize that although dual-mode In order to best determine how to position a

practices are centered around calculations similar particular practice, and hence determine its nature,

to exchange practices, there should be an emphasis it is suggested that managers first calculate a shar-

on keeping calculations unbalanced. As opposed to ing score in order to define where the practice falls

stricter sharing practices, customers will expect on the sharing-exchange continuum. To do so, as

traditional forms of financial compensation and re- explained earlier, a set of sharing and exchange

ciprocation. More importantly, the third-party me- characteristics outlined by Belk (2010) should be

diators are expected to facilitate these transactions evaluated and the average score of those character-

without substantial involvement. For example, istics should be used as the sharing score. Based on

Airbnb will facilitate the exchange of payments where the practice falls, managers should strongly

between guests and hosts, but is not directly in- consider the recommendations highlighted in

volved in how the calculations are derived. Also, this article based on four attributes: community

BUSHOR-1339; No. of Pages 9

What managers should know about the sharing economy 9

Evidence from two exemplary brand communities. Interna-

building, socialization versus utilitarian benefits,

tional Journal of Information Management, 34(2), 123—132.

sustainability efforts and political concerns, and

Habibi, M. R., Laroche, M., & Richard, M. O. (2014b). The roles of

the emphasis on transactions, calculations, and

brand community and community engagement in building

the exchange of money. brand trust on social media. Computers in Human Behavior,

37, 152—161.

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