GSSE

Sharing Economy Basics

These days, seems that any platform that uses the
internet´s power to efficiently match people’s wants with
people’s haves is labelled as ‘sharing economy’.
It’s tricky to find the right definitions because people
apply different lenses & language when thinking about
similar ideas and examples. There are multiple focuses:
on the benefit, behaviour, business model or even a
market structure.
This is a starter list of commonly used terms, and it´s not
likely to arrive at precise terms, but this is an effort to
make the distinctions clearer and to shine a light on the
mechanisms and principles behind the terms.

Definitions by Rachel Botsman

 Sharing Economy
• Systems that facilitate the sharing of
underused assets or services, for free or
for a fee, directly between individuals or
organizations.
• Unlocks the value of an underused asset
be it space, skills or stuff, and whether
the user behaviour involves sharing.
Idling Capacity
• Term used to
describe the
untapped social,
economic and
environmental value
of underused assets.
 Terms used to apply to a group of ideas or
companies with commonalities.

UMBRELLA TERMS:
 Access Economy
• Systems that enable people to pay for access to the
benefit of goods rather than needing to own them
outright.
• Focuses on delivering the benefit of access over
ownership. For example, people are able to access
media content easily from Netflix or Spotify, or
access a car from a car club like Zipcar.
 Circular Economy
• Systems that generate the most efficient use of
resources by extracting maximum value from
products and materials while in use, and extending
longevity through reuse at the end of a lifecycle.
• Considers the benefit of maximizing the efficiency
of use of a product or material. For example,
people are able to buy used Patagonia items
through Yerdle, or recycle and repurpose their trash
with Terracycle and Preserve.
 Collaborative
Consumption (1)
• Systems that reinvent traditional market
behaviours — renting, lending, swapping,
sharing, bartering, gifting — in ways and on a
scale not possible before the internet.
• Behaviour around exchanging assets changes
and becomes more efficient through technology.
 Collaborative
Consumption (2)
• For example, Airbnb enables people to rent out
their homes and unused spare rooms to guests.
Zopa allows people to borrow money from not just
their family or friends but from beyond their social
circle. And eBay elevates the “garage sale” allowing
people to sell their unwanted things to people not
just in their locality but to people with access to the
internet.
 Collaborative
Economy (1)
• Systems that unlock value from underused
assets by matching ‘needs’ and ‘haves’ in
ways that bypass traditional intermediaries
and distribution channels.
• Focuses on circumventing the traditional
intermediaries to change the dynamics of
supply and demand.
 Collaborative
Economy (2)
• For example, Vandebron enables people to buy
their power directly from independent energy
producers. Food Assembly allows people to buy
their fresh produce from local farmers. Upcounsel
allows people to select and hire an attorney
directly from a marketplace. Uber enables people
to get car rides directly from Uber drivers in the
vicinity.
 Gift Economy
• Systems that enable goods or services to be given
without any immediate payment or expectation of
future quid pro quo.
• Facilitates true gifting of a product or service. For
example, Freecycle enables networks of people
who want to give and get stuff for free, Impossible
enables people to give away their time, skills and
objects within the social network, and Couchsurfing
enables people to connect with locals to stay on
their couch for free.
 Gig Economy
• Systems that break up a traditional company ‘job’
into individual ‘gigs’ that independent workers are
paid to do for a defined time.
• Changes the nature of work, and the worker
relationship between the provider, customer and
intermediary platform. For example, TaskRabbit
pays task runners for every singular task they fulfil.
Uber pays drivers per ride they give passengers.
Postmates pays workers per delivery they are able
to take.
 On-Demand Economy
• Systems that instantly match buyers and sellers
to deliver goods and services immediately when
people need them.
• focuses on time-based benefits such as
immediate convenience or instant gratification.
Instacart allows people to get their groceries
delivered in an hour as Drizly does with liquor.
Amazon Prime membership expedites shipping.
 Peer Economy
• Systems that connect buyers and sellers facilitating
the exchange of assets directly between individuals.
• Uses a genuine peer-to-peer mechanism. For
example, Transferwise matches people based on
the currency they have and require in order to
make a currency swap. Etsy connects makers of
crafts with buyers looking for unique or handmade
products. Lyft connects people looking for a car ride
with everyday drivers offering services.
 Rental Economy
• Systems that enable people to rent assets for a
fee rather than needing to own them outright.
• Asks for a fee in exchange for rental of a good.
For example, Rent The Runway allows people to
rent designer clothes, Chegg allows people to
rent textbooks, and Getable allows companies to
rent construction equipment.
 The model that describes the ownership of an
asset and how it is distributed from provider to
customer.

Transaction Models
• Business-to-business: Models where
businesses monetize the idling capacity of
their existing assets and transact the value
with other businesses. For example, Cohealo
and Storefront

• Business-to-consumer: Models where

businesses own assets and facilitate
transactions among users who share the asset.
For example, Zipcar and Chegg
• Peer-to-peer: Models where assets are owned
and transacted directly between individuals or
a group of individuals. For
example, Peerby and BlaBlaCar

• Peer-to-business-to-peer: Models where

assets owned by individuals are provided to
existing business providers who offer directly
to individuals as part of a broader offering. For
example, BeMate and EasyCarclub
 Models used to generate revenue in
collaborative-based networks and marketplaces.

Revenue Models
• Service fees: A company takes a percentage of
the total transaction for successfully matching
two sides of marketplace (e.g. hosts and
guests, buyers and sellers, drivers and
passengers).

• Flat membership/subscription: A company

charges a flat monthly or annual membership
fee regardless of usage.
• Tiered subscription: A company offers a range
of subscription plans at different price points
based on frequency of use or number of goods
desired.

• Membership plus usage: A company charges a

one-off or annual membership fee (sometimes
with different plans offered based on
frequency of use). Additional fees are charged
based on usage.
• White label: A company creates a back-end
platform that can be licensed and branded
by other companies.

• Freemium: A company offers basic services

or use of the platform/app for free. Users
then ‘trade up’ for additional benefits and
exclusive features.
 Ways in which the market contributes to the
creation, production or distribution of a service
or product.

Market Mechanisms
 Platforms
The network, marketplace or
other digitally-enabled
mechanism used to facilitate
an exchange.
• Co-Creation (or Co-Design): Companies ask
outside experts or customers to participate in
the design or production of goods or services.
For example, the T-shirt company Threadless

• Co-Housing: Private households who choose to

form a community that shares a home with
common facilities to facilitate social interaction
and share household responsibilities. For
example, Bowden House Community and LILAC
in the UK
• Co-operatives: Business or organizations that
are jointly owned by its members, with profits
and benefits shared among them. For example,
local community co-ops such as Park Slope Food
Coop in Brooklyn, New York.

• Co-Working: Groups of independent workers

who choose to share office spaces and
resources, to cut down on costs and to facilitate
social interaction. For example, the workspaces
of WeWork and the Hub.
• Commons-based peer production: People
band together, free of any hierarchy or
organizational structure, to collaborate on
projects in order to achieve a common
outcome. For example, Wikipedia and local
community gardens.

• Crowdfunding: A large and diverse group of

people contribute money to fund projects,
ideas or products that they believe in. For
example, Kickstarter and Indiegogo.
• Crowdsourcing: A large group of people
provide input into a particular task, idea or
problem for free or for a fee. For example,
Topcoder and MIT’s Climate CoLab

• Open Innovation: The use of purposive inflows

and outflows of knowledge to accelerate
internal innovation, and expand the markets for
external use of innovation, respectively. For
example, P&G Connect + Develop
• MOOCs (Massive Open Online Courses):
Learning programs delivered through online
platforms that enable a large number of
geographically dispersed and diverse range of
students to enrol in courses. For example,
Coursera and Udemy

• Crowdvesting: A large and diverse pool of

investors raise capital in exchange for equity in
a company. For example CrowdCube and
CircleUp. 
• Open Sourcing: The licensing of a product to
permit modifications and redistribution of its
source code. For example, Github and Linux.

• Social Lending (Also referred to as ‘Peer

Lending’): The lending and borrowing of money
between individuals, without going through a
traditional financial institution. For example,
Zopa and Lending Club
 People

Market Participants
 Customers
People on the demand side of a
marketplace wanting goods and
services.
 Providers
People on the supply side of
marketplaces providing goods
and services.
Providers are also commonly referred to as:
• Sellers: People who make the final sale of
goods and services and not necessarily need
to be the producers or makers of the goods
and services. For example, eBay sellers.
• Micro-earners: People who take on a range of
tasks or ‘gigs’ in order to make a additional
income. For example, Taskrabbit runners who
also may deliver groceries on Instacart or
goods on PostMates.
• Micro-entrepreneurs: People who are
empowered to make or save money by
offering their existing assets, or services to
other people. For example, Airbnb hosts and
consultants on HourlyNerd.

• Makers: People who independently create

products. They may use the internet to fund
and bring products to market. For example,
makers on Etsy and inventors on Kickstarter.
 Activity
• In this contingency time, think about how
enterprises have focused in this kind of economy.
• Find an example of an organization, different from
the ones used in this presentation, that has used
sharing economy nowadays, explain how, which
term would you apply to it and why, and the
transaction model used-
• Deliver in one ppt slide, including company logo.
• Upload to MEFI plarform