Value creation in the sharing economy A multiple case study of how value is constructed in sharing economic P2P services Master Thesis Mie Lindberg Cand.merc. Strategy, Organization and Leadership Supervisor: Claus Varnes Department of Operations Management June 2, 2015 Copenhagen Business School 176,618 characters ≈ 78 pages Abstract This thesis sets out to investigate how value is constructed in the sharing economy as a network effect. The study is based on a multiple case study of two sharing econo- my services: GoMore who facilitates peer-to-peer ride sharing, and Airbnb who fa- cilitates peer-to-peer home rentals. Commonly, value creation is understood as linear process wherein value is embed- ded in a product or service and handed over linearly from a company to a consumer. This thesis reveals that such linear approach is not applicable to the sharing econo- my, in which multiple products are continuously shared in all directions in networks of peers facilitated by a company. Instead, a network perspective to value creation is proposed in which value is perceived as value constructions made up of networks of heterogeneous actors. Actor-network theory is applied as the analytical framework allowing for understanding the establishment of such value constructions as collec- tive processes of translation. Consequently, this thesis uncovers that value in the sharing economy is constructed by the simultaneous stabilization of distinct value constructions. The thesis succeeds in identifying four value constructions within each case and reveals that these are not only to be understood separately, but that they are highly related and connected to each other. In this regard, it is concluded that value in the sharing economy is con- structed in two levels that are mutually dependent. Firstly, by first level value con- struction facilitated by the company, ensuring the initial enrolment of actors and the construction of the network, whereby the qualities ‘cheap’ and ‘safe’ are attached as stable characteristics to the network. Secondly, by temporary second level value con- structions stabilized directly between peers in the process of sharing, whereby tem- porary and variable qualities are attached to the network, keeping the network attrac- tive and ensuring actors’ continuous enrolment in the network. Consequently, this thesis adds to existing literature on value by suggesting that one network may simultaneously withhold additional value constructions, and that differ- ent types of value are not only to be defined by their distinctiveness, but by how they interact and correlate with each other. Contents 1. Introduction 3! 1.1 A challenge to traditional consumption ........................................................................... 3! 1.2 Problem statement ........................................................................................................... 5! 1.3 Thesis structure ................................................................................................................ 5! 2. The Sharing Economy 8! 2.1 Towards a definition of the sharing economy ................................................................. 8! 2.2 The structure of sharing economic services .................................................................. 11! 2.3 Conclusion: The Sharing Economy ............................................................................... 12! 3. Value creation 13! 3.1 Boztepe’s five approaches to value ............................................................................... 13! 3.2 Value creation as a linear process ................................................................................. 14! 3.3 Value creation as a network process ............................................................................. 16! 3.4 Conclusion: A network perspective on value creation in the sharing economy ........... 17! 4. Analytical framework: Actor-network theory 18! 4.1 A constructivist point of departure ................................................................................ 18! 4.2 Actors, networks and actor-networks ............................................................................ 19! 4.3 The process of translation .............................................................................................. 21! 4.4 Human and non-human actors ....................................................................................... 22! 4.5 Structure and agency ..................................................................................................... 23! 4.6 Conclusion: ANT and its implications .......................................................................... 24! 5. An ANT perspective on value construction in the sharing economy 26! 5.1 The sharing economy through the lenses of ANT ......................................................... 26! 5.2 Value creation through the lenses of ANT .................................................................... 27! 5.2.1 Framing devices ................................................................................................... 28! 5.3 Conclusion: Value construction in the sharing economy as collective processes of translation ...................................................................................................................... 29! 6. Methodology 30! 6.1 ANT as a methodology .................................................................................................. 30! 6.1.1 Following the actors of the sharing economy ...................................................... 31! 6.2 A multiple case study .................................................................................................... 32! 6.2.1 Selecting cases ..................................................................................................... 33! 6.3 Data collection ............................................................................................................... 34! 6.3.1 Secondary data ..................................................................................................... 36! 6.4 Data analysis .................................................................................................................. 36! 7. GoMore 39! 7.1 Case description ............................................................................................................ 39! 7.1.1 How it works ........................................................................................................ 39! 7.2 Analysis of GoMore ...................................................................................................... 41! 7.2.1 Economic value construction ............................................................................... 41! 7.2.2 Safety value construction ..................................................................................... 44! 7.2.3 Hospitality value construction .............................................................................. 47! 7.2.4 Social value construction ..................................................................................... 50! 7.3 Conclusion: Value construction in the actor-world of GoMore .................................... 52! 8. Airbnb 54! 8.1 Case description ............................................................................................................ 54! 8.1.1 How it works ........................................................................................................ 54! 8.2 Analysis of Airbnb ........................................................................................................ 56! 8.2.1 Economic value construction ............................................................................... 56! 8.2.2 Safety value construction ..................................................................................... 59! 8.2.3 Hospitality value construction .............................................................................. 62! 8.2.4 Experience value construction ............................................................................. 66! 8.3 Conclusion: Value construction in the actor-world of Airbnb ...................................... 70! 9. Discussion 72! 9.1 Cross case results ........................................................................................................... 72! 9.2 First and second level value constructions .................................................................... 75! 9.2.1 First level value constructions .............................................................................. 75! 9.2.2 Second level value constructions ......................................................................... 76! 9.2.3 Interconnectivity of first and second level value constructions ........................... 77! 9.3 P2P versus B2C value construction ............................................................................... 78! 9.4 Adding to the understanding of value ........................................................................... 79! 10. Conclusion 82! 10.1 Limitations of this study .............................................................................................. 83! 11. Managerial implications 85! References 87! Appendix 92! Chapter 1. Introduction 3 1. Introduction 1.1 A challenge to traditional consumption For more than half a century economic wealth has been equated with consumption. Ownership and the right to consume have become symbols of status and expressions of economic freedom