Eindhoven University of Technology MASTER Sharing is caring: a road towards a green, global and connected Sydney? a case study about the roles of business models in sustainability transitions Meijer, L.J. Award date: 2016 Link to publication Disclaimer This document contains a student thesis (bachelor's or master's), as authored by a student at Eindhoven University of Technology. Student theses are made available in the TU/e repository upon obtaining the required degree. The grade received is not published on the document as presented in the repository. The required complexity or quality of research of student theses may vary by program, and the required minimum study period may vary in duration. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain Eindhoven, February 2016 Sharing is Caring: A road towards a green, global and connected Sydney? - A case study about the roles of business models in sustainability transitions. by L.L.J. Meijer Identity number 0736537 In partial fulfilment of the requirements for the degree of Master of Science in Innovation Sciences Supervisors: Dr. F. (Frank) Schipper Faculty of Industrial Engineering and Innovation Sciences Dr. Ir. B. (Bram) Verhees Faculty of Industrial Engineering and Innovation Sciences 2016 Colophon Title: Sharing is Caring: A road towards a green, global and connected Sydney? Subtitle: A case study about the roles of business models in sustainability transitions Keywords: Sustainability transitions, Multi-level Perspective, Strategic Niche Management, Business Models, Sharing Economy, Car Sharing, Mobility, Traditional, Peer-to-peer, Sydney, Australia. Author Name: Lize-Lotte Joukje Meijer Identity Number: 0736537 Contact: [email protected] Phone no. +31630595000 Education In partial fulfilment of the requirements for the degree of Mater of science in Innovation Sciences Certificates: Technology & Sustainability Technology, Development & Globalization University: Eindhoven University of Technology Department: Faculty of Industrial Engineering & Innovation Sciences Graduation Date: February 23rd, 2016 Supervisors dr. F. (Frank) Schipper Faculty of Industrial Engineering & Innovation Sciences dr. ir. B. (Bram) Verhees Faculty of Industrial Engineering & Innovation Sciences 1 | P a g e Preface During my study ‘Innovation Sciences’, I developed an increasing interest in frameworks and literature on sustainability transitions. For a long time already, I have been intrigued by climate change problems and the (cultural) factors that are involved with it. The subject of this thesis is therefore based on this passion and is an exploration of a term that has become very popular in the past decades; the case study about car sharing. I hope to have sparked your interest and contributed to existing knowledge about business models, niche experimentations and regime shifts. I really enjoyed diving into the literature about transitions, business models and car sharing and conducting the research (the interviews) in Sydney was an amazing experience. I want to express my gratitude to all the people that inspired me and supported me to shape my research and my thesis to what it is now. First of all, I would like to thank my supervisors Frank Schipper and Bram Verhees, who were very supportive during my research. Without their trust, I probably would not have been able to conduct my graduation project and write my thesis in such an independent manner. Furthermore, I would like to thank my mentor Henny Romijn, for helping me with questions about the sustainability and globalization certificates and pointing me towards the direction of Australia as the perfect location for my research. The Institute for Sustainable Futures in Sydney, and in particular dr. Chris Riedy has been very enthusiast and welcoming from the very first day of contact. I want to express my gratitude to Suzanne Cronan, Tech-support, the receptionist, my new friends and my roommates (especially Rohit and Pankaj for making me familiar with the Indian culture and delicious foods and making me feel like home at the other side of the planet). Moreover, thanks to all the interviewees that were able to sacrifice a little bit of their time in order to provide me with interesting and relevant information about car sharing. They made me feel comfortable during the interviews and I really enjoyed spending time and drinking tea with those great souls. If it wasn’t for my external hard drive I took with me, I would have probably needed to stay a while longer in Australia. Therefore I would like to thank my dad, Tiemen, for buying me this hard drive and fixing my computer so that I could resume my research and finish this thesis. I also want to express my gratitude towards him and the rest of my family for their involvement, unconditional support and love at all times. I want to thank my mom, Joke, for always being there for me and I would like to dedicate this thesis to my sister, Rinske, who is an amazing person capable of changing your world perspective. Thanks to my friends and peers who were always willing to listen to my stories and Joost: thank you for being my partner in life, study and research. Enjoy reading, Lotte Meijer Eindhoven, February 2016 2 | P a g e Executive Summary Over the past ten years, new business models were launched by start-up entrepreneurs in order to tackle issues like economic recession, the depletion of natural resources and other environmental pressures, while still caring for community feeling. An entrepreneurial movement that is called the ‘sharing economy’ is an example that is trying to redefine the nature of today’s business models (Mouazan, 2013). Australia is interested in all sorts of new initiatives to make their immense cities more environmentally friendly. As discussed in this thesis, a big city like Sydney, with limited parking space and lots of heavy traffic, considers car sharing as a hopeful option for making the city ‘green, global and connected’ (City of Sydney, 2015). Because more and more collaborative interaction emerged in Sydney, this can be experienced as the beginning of a societal shift, leading to (a transition towards) an environment in which the sharing economy is a leading strategy. This addresses the aim of the research conducted for this thesis, which is to identify the transition towards a car sharing system in Sydney. Theory The Multi-level Perspective is a theory on analyzing socio-technical transitions (Geels, 2002). Unfortunately, according to Bidmon & Knab (2014), theory and research is scarce in terms of the roles of business models (BMs) in transitions. The authors identify three roles of business models that could possibly contribute to a socio-technical transition. The first is that the business model can function as a device in order to support and popularize radical innovation. It can also be rooted in the socio-technical regime and raise barriers for growing niches. Or it could be a non-technological niche by itself acting at a more stable level (due to its boundary spanning nature) than normal technological niches. This thesis investigated those three roles of business models in transitions, by applying it to the case study of car sharing in Sydney. Methodology A qualitative research is performed. This study builds upon a comparative case study in the city of Sydney between two different types of business models: peer-to-peer car sharing and the traditional car sharing form. The cases comprise an implemented car sharing system, already in the experimental phase. The research demanded an iterative process of study, including a desktop and literature study and interviews with main car sharing stakeholders. To enhance validity all information is triangulated. Information gained from interviews were checked in policy documents and among other interviewees. The research is conducted at Sydney’s Institute for Sustainable Futures, a reliable scientific research institute. This thesis is an elaboration on the role of business models in (sustainability) transitions and provides knowledge on the application of the MLP framework (an evolutionary minded framework that is very important within the school of innovation sciences). Results and conclusion The sub questions proposed in the introduction of this thesis, provide answers to the several ways in which mobility business models contribute(d) to a car sharing transition. One can see that the business models that co-evolve in the niches raise boundaries in order to focus on slightly different (customer) segments. The companies survive by not attacking each other, but complementing each other’s work and supporting each other’s growth by alleviating barriers. 3 | P a g e Regime barriers were raised by the current dominant business model logic in combination with the several streams comprising the regime. A strong network and close ties with partners (like the government) can assist in overcoming those barriers, under the condition that the expectations of those partners match the expectations of the company. Furthermore, in the situation that a partnership with universities or knowledge institutes is not possible, one could still benefit from their learning processes once there is an extensive knowledge and research base provided for the public. The boundary spanning nature of the business model is a significantly important characteristic that must not be ignored when considering a transition towards for instance a car sharing system. In the case of the niche, the boundary spanning nature of the business models allow the companies to co-evolve while not constraining each other.