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A Better Look at the Sharing Economy of the Transportation Industry in the US

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A Better Look at the Sharing Economy of the Transportation Industry in the US Faculty of Behavioral, Management and Social sciences How do firms react to the growing averse towards ownership? A better look at the sharing economy of the transportation industry in the US. Lex van Beurden (s1368206) [email protected] Master Thesis 19 December 2017 Supervisor University of Twente: Dr. K. Zalewska-Kurek Dr. R.P.A. Loohuis i Summary This research has the aim to uncover how incumbent and entrepreneurial firms have influenced the evolution of business models. This is done by using secondary data in a qualitative research, whereby a distinction is made between three sectors: B2C, P2P, and for-hire service. In short, the sharing economy has ushered in a new age where underutilized assets become P2P services for hire, enabled by the Internet and smartphones. Especially Uber is already very big and probably here to stay. They are likely to become bigger, better, and more varied in the services they offer. Traditional companies in these markets are not likely to go out of business, but they cannot stand still. They must adapt and compete based on their own unique advantages—or they will become much-diminished versions of what they used to be. The main objective is to seek for what customers value, and this study has shown that it has grown towards an S-D view, in which intangibility, exchange processes, and relationships are central themes. This research also provides sufficient evidence that the servitization has not only a B2B character, but that B2C and P2P also get a foot on the ground. This is showed by taking into consideration the new wat of thinking: a car is still a good, but the automotive manufacturers are no core suppliers rather suppliers of personal transportation: the focus is on the service they deliver. Also, the shared economy has proven itself as a good example of a circular economy by taking into consideration the value-in-use. However, if the sharing economy follows the pathway of corporate co- option it appears unlikely to drive a transition to sustainability, firms like Uber and Lyft strive others out of the market. Co-option in the shared economy means that it develops mainly with a commercial focus. With this co-option strategy, the shared economy will not become the sustainable economy as it could be, which results in unfair competition, whereby other organizations are doomed to fail. It is the time that the governmental institution starts making more laws and do not underestimate the influence of the new shared economy. Tracking further developments in business models within the shared economy is worth follow-up investigation, research might investigate how digital technologies has enabled firms like Uber to rapidly establish a presence in hundreds of cities across the globe, to an extent outpacing regime resistance. Next, looking beyond the field of sustainability transitions, there is a considerable need to develop the nascent sharing economy literature. In particular, the priority should be empirical research which critically analyses the nature and impacts of the sharing and collaborative economies in their many and varied forms. Even though the sharing economy alone cannot bring about a sustainable society, it should be explored in detail. Especially the co-option like mentioned in the discussion should be more investigated. As for last, quantifying the net impact of P2P platforms remains an interesting direction for future research. Keywords: Shared economy, collaborative consumption, servitization, value-in-use, business model, car industry 2 Table of Contents Summary................................................................................................................................... 2 Table of Contents ..................................................................................................................... 3 1 Introduction ...................................................................................................................... 5 2 Literature ........................................................................................................................... 7 2.1 Business model .......................................................................................................... 7 2.2 Sharing Economy .................................................................................................... 10 2.3 Service-dominant Logic ......................................................................................... 13 3 Method ............................................................................................................................. 18 3.1.1 Data sample ...................................................................................................... 18 3.1.2 Data gathering ................................................................................................. 19 3.1.3 Data Analysis ................................................................................................... 20 3.2 Business-to-Consumer ........................................................................................... 21 3.3 Peer-to-peer ............................................................................................................. 22 3.4 For-hire service models .......................................................................................... 23 4 Findings ........................................................................................................................... 24 4.1 B2C ............................................................................................................................ 24 4.1.1 ZipCar ............................................................................................................... 24 4.1.2 Car2Go .............................................................................................................. 25 4.1.3 Private Lease .................................................................................................... 26 4.2 P2P ............................................................................................................................ 29 4.2.1 Turo ................................................................................................................... 29 4.2.2 Getaround ......................................................................................................... 32 4.2.3 Zimride ............................................................................................................. 33 4.3 For-hire service ........................................................................................................ 36 4.3.1 Uber ................................................................................................................... 36 4.3.2 Lyft ..................................................................................................................... 38 4.3.3 Flywheel ............................................................................................................ 39 5 Discussion ....................................................................................................................... 44 6 Conclusion....................................................................................................................... 48 6.1 Implications ............................................................................................................. 48 6.1.1 Scientific Implications ..................................................................................... 48 6.1.2 Practical Implications ...................................................................................... 49 3 6.2 Limitations ............................................................................................................... 50 6.3 Further Research ..................................................................................................... 50 7 References ........................................................................................................................ 52 4 1 Introduction The urban challenges are huge in the US. The need for answers to America’s traffic gridlock problem becomes acuter each year. In much of the nation, traffic congestion has increased to alarming levels, with associated costs estimated at $121 billion, equivalent to slightly more than 1 percent of all annual US personal consumption. The average American spends about 34 hours every year sitting in traffic. That is a whopping 5.5 billion hours for all commuters (Viechnicki, Khuparkar, Fishman, & Eggers, 2013). The economic opportunity cost is staggering: $330 million daily, or about $124 billion every year. If nothing changes, this cost could grow to $186 billion by 2030. Moreover, that is just the cost to individuals. Every mile we drive costs governments 7.5 cents, and at almost 3 trillion vehicle-miles traveled per year; those miles add up. If the cost of congestion, air pollution, or even lost property value near roadways is added, the total estimated external cost of driving runs between 27 cents and 55 cents per mile (Inrix, 2014). A solution which could solve the urban challenges in the United States is carsharing. Though aspects of carsharing have existed since 1948 in Switzerland, it was only in the last 15 years that the concept has evolved into a mobility solution in the United States. In that time, the carsharing market has grown from a largely subsidized, university research-driven experiment into a full-fledged for-profit enterprise,
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