Examining the critical success factors of sharing economy-based business models in the Netherlands : a multiple case study approach

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A thesis submitted in partial fulfillment of the requirements for the degree of MSc. in Business Administration – Entrepreneurship & Innovation

Examining the Critical Success Factors of Sharing

Economy-based Business Models in the Netherlands:

A Multiple Case Study Approach

Author

Jim Colin (11147458)

Supervisor Dr. Roel van der Voort

Date of Submission Wednesday, January 11, 2017

Disclaimer

This document is written by Jim Colin who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

The concept of sharing has been around for decades. Currently, it is being reframed as a disruptive trend which is transforming legacy business models. However, there is a dearth of research on how these sharing economy business models actually work. Thus, this research focuses on this major gap in existing academic literature. In addition to providing a

descriptive analysis of these business models, this research contributes to existing literature as the critical success factors (CSFs) of sharing economy-based business models were explored. Such factors are often essential for the success of a firm in a particular industry.

To identify the CSFs, a multiple case study of three companies, which are all maintaining an online P2P-platform, was conducted. Data was collected through semi-structured interviews and secondary data to ensure data triangulation. The Business Model Ontology was used to collect, analyze and compare the data between the case companies through either approving or refuting working propositions.

In conclusion, a cross-case analysis has led to themes which were consistent across all cases. On the one hand, a critical mass, two compelling value propositions, the community, co-creation, the right mix of (in)direct channels, trust, the platform, human resources, partnerships, platform activities and cost efficiency were found to be crucial. On the other hand, a self-service relationship, automated services and maximizing the quantity of

transactions were only partially supported. In addition, unexpected insights, such as personal assistance, dedicated personal assistance, financial resources, proprietary knowledge, a loyal customer base and physical assets, did emerge during the analysis of the data. However, only personal assistance was found to be pivotal in all cases.

In spite of having practical implications and theoretical relevance, there are some limitations and avenues for future research. For instance, research must include a larger sample to increase generalizability. In addition, it might be interesting to include six to ten other cases, which do not thrive a successful business model to pursue two different patterns of theoretical replications.

Key words: Sharing Economy, Shared Mobility, P2P, Business Model Canvas, Critical Success Factors, CSF

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Acknowledgements

This thesis was provoked by the Academy of Management’s “Call for Papers: Business Models, Ecosystems, and Society in the Sharing Economy” and as a suggestion by my classmates. However, it has become a reality with the kind support and help of many individuals. I want to extend my gratitude to all of them.

Foremost, I would like to express my sincere gratitude to my advisor Prof. van der Voort at the University of Amsterdam for the continuous support and patience for my Master thesis. He allowed my study to be my own work, but steered me in the right direction.

I would also like to thank all the people from the case companies who were involved in the interviews for this research project. Without their participation and valuable input, the case studies would not have been successfully conducted. I must also express my deepest gratitude to my mother, friends and classmates for providing me with unfailing support and encouragement throughout writing the thesis and my life in general. Especially the sleepless nights and endless discussions will be missed. This accomplishment would not have been possible without them.

Last but not least, conducting this research was sometimes a slow and steady process. However, I always managed to move forward and, overall, I really found the process of moving closer rewarding. As the wise Confucius once said: “It does not matter how slowly you go as long as you do not stop.”

Jim Colin

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3.5 Data Analysis 54 3.6 Validity 56 3.7 Reliability 56 4 Results 57 4.1 Within-case Analysis 57 4.1.1 Mustang 57 4.1.2 Beetle 67 4.1.3 Ram 75 4.2 Cross-case Analysis 84 5 Discussion 92 5.1 Customer Segments 92 5.2 Value Proposition 93 5.3 Customer Relationships 94 5.4 Customer Channels 98 5.5 Revenue Streams 98 5.6 Key Resources 100 5.7 Key Partnerships 104 5.8 Key Activities 105 5.9 Cost Structure 106 6 Conclusions 108 6.1 Main Findings 108

6.2 Theoretical Relevance and Practical Implications 109

6.3 Limitations and Suggestions for Future Research 110

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8 Appendices 121

8.1 Appendix A: Definitions Sharing Economy 121

8.2 Appendix B: Definitions Business Model 122

8.3 Appendix C: Interview Protocol 123

8.4 Appendix D: Coding Scheme 127

8.5 Appendix E: Interview Mustang 132

8.6 Appendix F: Interview Beetle 142

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List of Figures

FIGURE 1. The business model canvas of Mustang. 58

FIGURE 2. The business model canvas of Beetle. 67

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List of Tables

TABLE 1. Overview of the motivations for participating in the sharing economy. ... 27

TABLE 2. An overview of the case companies. ... 52

TABLE 3. An overview of the working propositions of Mustang. ... 66

TABLE 4. An overview of the working propositions of Beetle. ... 75

TABLE 5. An overview of the working propositions of Ram. ... 84

TABLE 6. An overview of the working propositions of all case companies. ... 86

TABLE 7. Conclusion of WP1. ... 93

TABLE 9. Conclusion of WP3a. ... 95

TABLE 10. Conclusion of WP3b. ... 95

TABLE 11. Conclusion of WP3c. ... 96

TABLE 12. Conclusion of WP3d. ... 97

TABLE 13. Conclusion of WP3e. ... 97

TABLE 14. Conclusion of WP3f. ... 98

TABLE 17. Conclusion of WP6a. ... 100

TABLE 18. Conclusion of WP6b. ... 101

TABLE 19. Conclusion of WP6c. ... 102

TABLE 20. Conclusion of WP6d. ... 102

TABLE 21. Conclusion of WP6e. ... 103

TABLE 22. Conclusion of WP6f. ... 103

TABLE 23. Conclusion of WP6g. ... 104

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1 Introduction

Despite the fact that startups can make the world a better place, it is well-known that many fail. According to Patel (2015), 90% of all startups fail due to various reasons, such as no market need for the product or service, the shortage of cash and not having the right team. What is more is that 17% cited to have a lack of a solid business model design (Griffith, 2015). Be that as it may, as a result of the financial recession, many of startups like Airbnb and Uber were born despite the failure rate (Marshall, 2015). These business models have in common that they operate in the so-called sharing economies of collaborative consumption or access-based consumption (Bardhi & Eckhardt, 2012; Botsman & Rogers, 2010). Instead of owning things, consumers prefer to pay for the access to goods (Bardhi & Eckhardt, 2012). For instance, car sharing has expended at an exponential rate and it is expected that 12 million people will participate in such programs by 2020. Similar growth rates have been found in ridesharing (Martin, 2016). This trend of sharing consists of competitive business models that need to be analyzed as it presents a challenge for traditional service providers, which need to rethink their business models (Möhlmann, 2015).

The example of car sharing above illustrates how the sharing economy is changing the rules of how business is conducted and opening a wealth of novel opportunities for

entrepreneurs around the world. According to Botsman & Rogers (2010), collaborative consumption is not a niche trend anymore. For instance, the sharing economy has already changed how people arrange car rides, find lodging and more. On a typical day, 140,000 people rent lodging through Airbnb and 1 million people ride with Uber. However, unlike general belief, the term “collaborative economy” is not new and was given a rebirth (van de Glind & van Sprang, 2016). The reason for this is that, in early 1995, Newman started an email distribution list to inform the community of internet developers about local events (Marshall, 2015). Thus, this concept of sharing has been conducted for decades as, for instance, the sharing economy can be seen as the re-imagination of the original peer-to-peer marketplace model, which were introduced during the 1990s (Olson & Connor, 2013). Rather, it is the current framing of these forms of sharing as radical and disruptive, which makes this trend remarkable (Martin, 2016).

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Despite the fact that the term is not novel, every year the sharing economy continues to disrupt existing markets. According to PriceWaterhouseCoopers (2014), the sharing economy currently generates $15bn in global revenues. It is even expected to rise to $335bn by 2025 worldwide. For example, it is expected that car ownership will decline as consumer are starting to rely more on services, such as Zipcar. One possible explanation for the success of the sharing economy is the fact that rating a driver on Uber is both empowering and more transparent (Marshall, 2015). This co-called trust is an important determinant of the

satisfaction with a sharing option (Möhlmann, 2015). Other reasons for the emergence of sharing economy business models includes the need for frugal spending after the global recession and the growing concern for the environment combined with the ubiquity of the Internet (Cohen & Kietzmann, 2014). Especially the Internet has fueled this trend as it facilitates online-based communities for little transaction costs (Möhlmann, 2015).

On the other hand, the expanding sharing economy has its downfalls as well. Their associated business models are not without their problems (Cohen & Kietzmann, 2014). For instance, according to Kroes (2014), the sharing economy has led to the elimination of jobs in several traditional sectors. These traditional companies are complaining that the newcomers are gaining an unfair advantage by ducking regulations (Marshall, 2015). Moreover,

according to Cohen & Kietzmann (2014), the common interest in sustainability does not always lead to harmony among the different kinds of agents as agency conflicts may arise. Yet, the disruptive effects of digital technologies are here to stay (Kroes, 2014).

Despite the widespread strikes and attempts to ban companies, such as Uber, Europe needs more entrepreneurs who are willing to create more jobs in the future (Kroes, 2014). Some argue that these companies will move jobs in existing industries to new companies (Marshall, 2015). It is apparent that there is a demand for the provision of services offering non-ownership modes of consumption (Moeller & Wittkowski, 2010). Entrepreneurs should, therefore, adapt to new business models in the sharing economy to avoid losing out on the new way of doing business.

1.1 Research Goal

Current academic research still has not addressed the relationship between the emergence of the sharing economy and the successful associated business models, which could be used by

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startups to start earning their slice of the action. In fact, the only thing we know is that the sharing economy companies have one thing in common, i.e. that the customers access the platform through the Internet. Even so, many of the sharing economy companies are not publicly traded, thus it is difficult to assess whether they are profitable (Marshall, 2015). Moreover, due to its newness, research on the relationship between business and sustainability in context of the sharing economy is scarce (Botsman, 2013). On top of that, Cohen &

Kietzmann (2014) have indicated that there is a dearth of research on how sharing economy business models work, their impacts in terms of sustainability and how key stakeholders must be aligned to ensure the longevity of their business models. According to Belk (2014),

collaborative consumption is leading to the creative destruction of old business models. On the other hand, business models have received considerable attention in existing literature in the last decade. For instance, the term business model has often been referred to as a unit of analysis, which spans traditional units of analysis, can considered to be holistic and includes activities which are recurrent (Zott, Amit, & Massa, 2011). A business model can be defined as how an organization creates, delivers, and captures value (Osterwalder & Pigneur, 2010). Therefore, to address this shortcoming, the following research question will serve as the common theme throughout this thesis: How do emerging business models in the sharing economy look like and why do some succeed and others do not? To answer the research question, it is imperative to include the following sub-question within the scope of this thesis: (1) What are the definitions of the sharing economy? (2) What are the motivations for choosing a sharing option? (3) What are the definitions, typologies and ontologies of a business model? (4) How can a sharing economy business model be conceptualized? (5) What are the critical success factors (CSFs) of sharing economy-based business models?

Thus, the overall objective of this study is to develop a business model template for startups in the sharing economy including the critical success factors, which will be of great use for practitioners and expand the overall knowledge of business models. These critical success factors can, when properly sustained and maintained, have a significant effect on the success of a firm in a particular industry (Leidecker & Bruno, 1984).

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The current state of the academic literature concerning the sharing economy is either focused on the regulations or the perspective of the consumer. Instead of jumping on the bandwagon, this thesis will emphasize on the entrepreneurial point of view. The business model has

already become a unit of analysis as the number of peer-reviewed journals in which the notion of a business model is addressed has experienced tremendous growth. It has also been a subject of a growing number practice-orientated studies (Zott et al., 2011). Despite its

fundamental significance, an understanding of the sharing economy business models is weak (Cohen & Kietzmann, 2014). Thus, this research will expand existing literature by addressing the gap, namely the identification of success factors.

In addition, this thesis is also interesting from a practical point of view. Driven by the advent of the Internet, the sharing economy is a source of new business models which can successfully be implemented by startups, which usually have limited resources, and will lead to new ways of participating on more efficient platforms (Belk, 2014b; Richter, Kraus, & Syrjä, 2015). However, it is a competitive model presenting a lot of challenges for

conventional service providers, which needs to be analyzed (Möhlmann, 2015). Through identifying the success factors of sharing economy business models, entrepreneurs are enabled to make well-informed decisions when developing successful sharing economy startups.

1.3 Outline

The remainder of this thesis is as follows. At first, an extensive literature will be performed to establish a theoretical framework, define key terms and identify the gaps in existing literature. It is important to provide a demarcation in terms of the variety of definitions of both sharing and business models. Moreover, concerning the business model, a multitude of ontologies and typologies exist which need to be elaborated upon how the business model of the various case companies may look like. Ultimately, the two streams in the business literature will converge into a conceptual model, which consists of a set of well-defined working propositions. Second, the methodology of this research will entail the data collection method, data analysis method and sample overview. Third, an analysis will be conducted via a multiple case study method including within-case- and cross-case analyses. Finally, a discussion, conclusions, limitations and suggestions for future work will be provided.

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2 Literature Review

This section provides a thorough analysis of existing literature. First, the characteristics and the ambiguities surrounding the definition of the sharing economy will be elaborated upon. Second, the state of research concerning the concept of a business model will be examined. Third, the antecedents of business models in the sharing economy will be identified. Last but not least, an initial set of working propositions will be constructed which will lay the

foundation for further research.

2.1 The Rise of the Sharing Economy

During the last decade, the sharing economy has enabled a wide variety of Internet-based platforms. Airbnb and Uber can be regarded as the most explicit examples of the sharing economy (Henten & Windekilde, 2016). Thus, this indicates that we are entering a post-ownership economy, which can be considered as a result of the financial crisis. For instance, the sharing economy offers appealing alternatives due to its low costs and novel income opportunities. Traditional consumers are producing exchange value for companies, which is leading to a fundamental change in economic organizations (Humphreys & Grayson, 2008). However, the concept of collaborative consumption has been around for decades. The only difference is that sharing is happening at a scale never possible before (Botsman & Rogers, 2010). The rise of the Internet has simplified the process of connecting with others and has overcome multiple barriers, such as trust and reputation (Möhlmann, 2015).

2.1.1 Definitions of the Sharing Economy

There exists an array of definitions of the sharing economy in academic literature. Yet, these definitions are not contradictory in nature, but, the term is considered as evolutionary

(Daunorienė, Drakšaitė, Snieška, & Valodkienė, 2015). “Collaborative consumption” (Botsman & Rogers, 2010), “access-based consumption” (Bardhi & Eckhardt, 2012),

“commercial sharing systems” (Lamberton & Rose, 2012), “pseudo-sharing” (Belk, 2014a), “prosumption” (Humphreys & Grayson, 2008) and “peer-to-peer renting” (Philip, Ozanne, & Ballantine, 2015) are only a few examples of the trend towards a post-ownership economy.

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For starters, the sharing economy can be conceptualized as an umbrella that encompasses multiple ICT developments and technologies, which endorses the sharing of goods and services through online platforms (Hamari, Sjöklint, & Ukkonen, 2015). Even though the term “sharing economy” is the most known, there are also definitions that can be positioned as a category of the technology-driven sharing economy (Hamari et al., 2015). These definitions are often interchangeably used with the term “sharing economy”. An overview of these terms can be found in Appendix A, which are chronically ordered as, like said before, the term is considered as evolutionary (Daunorienė et al., 2015). For starters, Botsman & Rogers (2010) have defined collaborative consumption as sharing, bartering, trading, renting, swapping, and collectives to get the same pleasures of ownership against reduced costs and lower environmental impact. In contrast, according to Bardhi & Eckhardt (2012), the term access-based consumption is more appropriate, which is defined as

transactions that can be market mediated but where no transfer of ownership occurs. The reason for this disagreement is that instead of buying and owning products or services, consumers receive access or pay for the experience. In other words, customers have the opportunity to enjoy the benefits without owning the product (Lamberton & Rose, 2012). Similarly, a Mesh is based on network-enabled sharing, which emphasizes on access rather than ownership. A Mesh network has the capacity to reap more rewards than a company that sells something only once to one owner. It allows for more efficient and personalized access to goods and services. Simultaneously, companies do not need to push their offers and can make their goods and services available whenever they want (Gansky, 2014).

However, the term “sharing” differs from the definitions above and is as old as mankind. According to Belk (2007) sharing can be defined as “the act and process of distributing what is ours to other for their use and/or the act and process of receiving or taking something from other for our use.” Sharing is an alternative to ownership and includes voluntary lending, pooling, allocation of resources and use of public property. Although giving and receiving are a part of sharing, they differ from giving and receiving in commodity exchanges and gifting. For instance, there are some things which only can be shared such as a sunset, guilt and shame. A more succinct definition is provided by Benkler (2004) who considers sharing as nonreciprocal pro-social behavior. According to Frey & Meier (2002), this so-called reciprocity occurs when individuals act in a more cooperative manner as a

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response to friendly behavior of others and act hostile when treated unfriendly. However, pro-social behavior goes beyond reciprocity as people are prepared to act in a non-selfish way. The reason for this is that a significant amount of people, which were not aware of what others were doing, were prepared to donate a small amount of money.

There are two commonalities between sharing and collaborative consumption, namely the use of temporary access and the reliance of Internet (Belk, 2014b). Especially the Internet has brought new ways of sharing on a larger scale to combat hyper-consumption, pollution and alleviate other societal problems (Belk, 2014b; Botsman & Rogers, 2010; Hamari et al., 2015). However, concerning sharing as a concept, there is a clear distinction between non-ownership-based sharing, such as feeding your child, and transfer of ownership, e.g.

marketplace exchange. Also, some platforms offer sharing opportunities, but are considered to be short-term rental activities, which is also known as pseudo-sharing (Belk, 2014a). This form of sharing is not actually sharing, but is not entirely unwelcome either. Four types are common, namely long-term leasing, short-term rentals, sharing data online and

online-facilitated barter economies. Thus, within this maze of terms, it is difficult to determine where sharing ends and commerce begins. For these reasons, Belk (2014) has proposed a new

definition for collaborative consumption, namely that it involves people coordinating the acquisition and distribution of a resource for a fee. Similarly, Philip et al. (2015) consider peer-to-peer renting to be the process of making one’s physical assets temporarily available to another individual for a fee without losing the ownership.

Overall, it can be derived from existing literature that the definitions of the sharing economy are diverse and often intertwined. Whilst Hamari et al. (2015) have approached collaborative consumption as a technological phenomenon as most of the action takes place through online platforms, the lion’s share have viewed the sharing economy from a consumer-related perspective including sharing and access-based consumption (Belk 2007; Bardhi & Eckhardt 2012; Lamberton & Rose 2012; Belk 2014a; Belk 2014b). In addition, the definitions above can be classified according to either monetary- or non-monetary

transactions (Belk, 2007, 2014b). For these reasons, various scholars have emphasized on this so-called multiplicity of the term (Belk, 2014b; Hamari et al., 2015). Due to the variety of definitions in existing literature, it is necessary to mark the limits of the term. Therefore, any reference to the sharing economy includes people coordinating the acquisition and

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distribution of a resource for a fee through community-based online platforms in which no transfer of ownership takes place (Bardhi & Eckhardt, 2012; Belk, 2014b; Hamari et al., 2015).

2.1.2 Characteristics of the Sharing Economy

Based on the transitions theory, the sharing economy is considered to be a niche, which has the ability to transform the landscape and regime (Martin, 2016). Based on the exploratory methods of online ethnography, Martin (2016) identified three framings to empower the sharing economy niche, namely as (1) an economic opportunity, (2) a sustainable form of consumption and (3) a pathway to a sustainable economy. On the other hand, there were also three framings which rejected the collaborative economy: (1) unregulated market places, (2) reinforcing the neoliberal paradigm and (3) an incoherent field of innovation. Especially regime actors tend to frame the sharing economy as an economic opportunity and unregulated marketplaces, whereas niche actors emphasized on sustainable consumption, reinforcing neoliberalism and a decentralized economy. It is suggested that the current trend of the sharing economy will not be able to disrupt unsustainable practices across the regimes as the economic opportunity has the superior position within the sharing economy (Martin, 2016). The reason for this is that, according to Daunorienė et al. (2015), there is a lack of empirical studies based on the sharing economy’s sustainability. Despite the fact that the economic opportunity has the superior position, there is a dearth of understanding why people participate in collaborate consumption (Hamari et al., 2015; Philip et al., 2015).

Therefore, Richardson (2015) has proposed three so-called performances to illustrate its potentials and contradictions. At first, the enactment of a community involves the building of communities around causes and is contingent upon participation, which is achieved

through the cultivation of disposal. This means that strangers are becoming acceptable, which makes economies of trust vital. It is now possible to share with strangers, rather than within communities (Schor & Fitzmaurice, 2014). Yet, these platforms often fail to deliver the community-feeling (Philip et al., 2015). Nonetheless, high cultural capital consumers are also starting to share, not out of necessity, but rather by choice (Schor & Fitzmaurice, 2014).

According to Möhlmann (2015), based on a quantitative analysis of two cases,

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was found that Zipcar users do not feel like having communal links with the company or one other. They do not feel a sense of pride due to a lack of altruism (Bardhi & Eckhardt, 2012). Similarly, reputation gains in a community setting did not affect the attitude and behavior towards collaborative consumption and community belonging did not have an effect on the satisfaction or likelihood of choosing a sharing option again in a C2C marketplace (Hamari et al., 2015; Möhlmann, 2015). For instance, it was expected that active participants may expect intangible rewards in the form of higher status within the community (Hamari et al., 2015).

Second, sharing through access is both a practice and an ideal. This concerns the access to the commons in which collective ownership is preferred above commercialization (Richardson, 2015). Many people have criticized the market provision and act from a certain ideology (Philip et al., 2015; Schor & Fitzmaurice, 2014). In addition, according to Hamari et al. (2015), in case of intrinsic motivations, it seems that perceived sustainability of sharing has significant effect on the attitude towards collaborative consumption. However, it did not have an effect on the actual behavioral intention. For instance, it might be that sustainable consumption does not lead to economic gains (e.g. reducing search and coordination costs). Remarkably, other studies found that environmental impact did not have an effect on the satisfaction nor on the likelihood of choosing a sharing option again (Moeller & Wittkowski, 2010; Möhlmann, 2015).

On top of that, perceived enjoyment had a significant positive effect on the attitude and intention to participate in collaborative consumption (Hamari et al., 2015). According to Kim et al. (2015), epistemic benefits, which involves the search for new experiences and desires, relate to the relative advantage of participating in the sharing economy. To illustrate this point, Moeller & Wittkowski (2010) found that customers often want to consume the newest product, which they would be more likely to rent. However, access is not necessarily altruistic or prosocial. For instance, Zipcar users did not incorporate the car into their

extended self as their relationship with the shared car is only one of instrumental utility, such as reducing costs (Bardhi & Eckhardt, 2012). Principally, according to Lamberton & Rose (2012), transaction utilities of both ownership and sharing are important as well as the substitutability between ownership and sharing. This access-based consumption differs from traditional rentals by virtue of being enabled through digital technologies and self-service (Bardhi & Eckhardt, 2012). Moreover, customers are willing to participate when the costs of

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sharing are minimized and the benefits are maximized (Philip et al., 2015). Three types of costs can be identified in the sharing economy, namely the price (e.g. subscription fee), technical costs, such as coping with unfamiliar products, and search costs (Lamberton & Rose, 2012). For instance, familiarity with a sharing option lowers the transaction costs as prior knowledge reduces uncertainty (Lamberton & Rose, 2012; Möhlmann, 2015).

According to Möhlmann (2015), especially costs savings, familiarity, trust and utility were found to have a positive relationship with the satisfaction of a sharing option, whereas familiarity and utility also positively influenced the likelihood of choosing that option again. Thus, the respondents appear to be driven by rational decisions to serve their self-interest. Especially trust and reputation has become the central question of the sharing economy (Schor & Fitzmaurice, 2014). On the other hand, research found that the economic benefits did not have a significant positive effect on the attitude, but, it did have an effect on the behavioral intention (Hamari et al., 2015). This could be due to the crowding-out

phenomenon, which pertains to the shift from the initial intrinsic motivations toward extrinsic ones (Frey & Jegen, 2001). Overall, it appears that an attitude-behavior gap might exist due to the effect of attitude on the intentional behavior which is rather low (Hamari et al., 2015).

Third, sharing through collaborating involves people working together to produce value (Richardson, 2015). P2P rental sites offer a self-service model in which both users engage in co-creation (Humphreys & Grayson, 2008; Philip et al., 2015). On such platforms, both the renter and the provider preferred the rental product to be a costly and

high-involvement product. Whilst renters sought ways to trial high-high-involvement products, a motivation for providers was the gratification of their things being used due to an aversion to unused utility (Philip et al., 2015). This benevolence means greater trust (Kim et al., 2015). In addition, providers opted for durable products which were difficult to break (Philip et al., 2015). Moeller & Wittkowski (2010) found that especially renters are cautious with the products to avoid penalties. However, Bardhi & Eckhardt (2012) indicated that Zipcar users did not really care about damaging the car.

This so-called co-creation does not have to take place at the same time and place due to the current technologies. Yet, there is also a greater fragmentation as several activities are being outsourced, which imposes risk and uncertainty (Richardson, 2015). Especially negative reciprocity is strongly represented as the users are acting in self-interest, which is

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being caused by market mediation, limited duration of use and high level of self-service. For this reason, Zipcar has adopted a big-brother governance model to induce the users to behave according to the well-being of the entire group (Bardhi & Eckhardt, 2012).

Concerning the renters of shared goods, the high level of involvement was often considered to be a pitfall. For instance, users were too widely spread to ensure a smooth transaction. Especially smaller items were too much of a hassle due to a difference in

geographical location. Also, their demands seem to be need-driven and infrequent. Thus, the availability of access is relevant in this context as owning products is much more convenient (Lamberton & Rose, 2012; Philip et al., 2015). According to Lamberton & Rose (2012), the reason for this is that commercial sharing systems are characterized by a between-consumer rivalry for a limited supply of shared goods. These products can be exclusive, which means that access can be controlled. Thus, perceived product scarcity risk, which is defined as the likelihood of a product or service is unavailable when requesting access, is an important determinant of sharing propensity. Moreover, this so-called product scarcity risk is dependent on the user’s usage and the usage of potential sharing partners. Based on a quantitative study 123 US participants, consumers who have a low ability to predict their usage will have a higher propensity to share only when they experience a sense of control of the product usage of others. Moreover, similarity among sharing partners may facilitate trust and they are more likely to suspend negative expectations. This was especially the case for individuals with low usage. However, as expected, higher-usage users are more willingly to share with partners who are dissimilar. Similarly, Lamberton & Rose (2012) find that the degree of

substitutability in car sharing to have an impact on using the sharing option.

In conclusion, as can be seen in table 1, there appears to be no consensus about the specific characteristics of participating in the sharing economy. Yet, for instance, in spite of one study indicating that economic gains did not have an effect on the attitude towards collaborative consumption, it appears that economic benefits are the determining factor when choosing for a sharing option (Hamari et al., 2015; Lamberton & Rose, 2012; Möhlmann, 2015; Philip et al., 2015; Schor & Fitzmaurice, 2014). In addition, it appears that intrinsic motivations, such sustainability and community belonging, do not have a positive effect on the satisfaction and the likelihood of using a sharing option again (Hamari et al., 2015;

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Möhlmann, 2015). Although these motivations were a prominent topic of discussion, it seems like that these intrinsic motivations can be seen as an added bonus (Philip et al., 2015).

In spite of this, trust is considered to be an essential component of the sharing economy (Möhlmann, 2015; Richardson, 2015; Schor & Fitzmaurice, 2014). Users can rate each other through a rating- and commenting system based on the experience. This creates a so-called stickiness (Dubosson-Torbay, Osterwalder, & Pigneur, 2002). Based on an analysis of ratings collected for over 600,000 properties listed on Airbnb worldwide, it was found that nearly 95% of all user ratings boast an average of either 4.5 or 5 stars. However, this does not reflect true product quality due to herding behavior, under-reporting of negative reviews, self-selection and strategic manipulation. Trust is important as participants experience information asymmetry regarding each other’s quality. This often leads to bilateral reviewing, i.e.

incentivizing hosts to provide positive feedback to be positively judged in return (Zervas, Proserpio, & Byers, 2015). In addition, consumers appreciate the level of convenience as it can be a hassle to request access to shared goods (Lamberton & Rose, 2012; Philip et al., 2015). This might be due to rivalries among the users of shared goods (Lamberton & Rose, 2012). Also, familiarity and the perceived utility did have an effect on the decision to

participate in the sharing economy (Hamari et al., 2015; Möhlmann, 2015). Familiarity leads to lower transactions costs, whereas utility pertains the substitutability of the shared good (Lamberton & Rose, 2012; Möhlmann, 2015). As a concluding remark, it is interesting to note that these characteristics might be highly dependent on the type of industry. For instance, according to Bardhi & Eckhardt (2012), ownership of cars still remains the normative mode and it can even be embarrassing to not own a car.

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E co no mic Ut ility Co mm un it y Su st a ina bil it y F a mil ia rit y E njo y ment Reput a tio n T rus t Av a ila bil it y Ideo lo g y Co nv enience T re nd P o ss ess io n

Moeller & Wittkowski (2010) ✔ ✔ ✔ ✔ ✔ ✔

Lamberton & Rose (2012) ✔ ✔ ✔ ✔ ✔

Schor & Fitzmaurice (2014) ✔ ✔ ✔ ✔ Hamari et al. (2015) ✔ ✔ ✔ ✔ ✔

Kim et al. (2015) ✔ ✔ ✔ ✔ ✔

Möhlmann (2015) ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

Philip et al. (2015) ✔ ✔ ✔ ✔ ✔ ✔ ✔

TABLE1.Overview of the motivations for participating in the sharing economy.

2.2 The Rise of Internet-Based Business Models

Due to the diffusion of the Internet, different business models have emerged (Muzellec, Ronteau, & Lambkin, 2012). The current growth in these practices has implications for startups and traditional models as it can either entrench business-as-usual or disrupt a

divergent range of activities (Belk, 2014b; Richardson, 2015). Belk (2014b) claimed that this so-called creative destruction of old business models will lead to new ways of participating as the Internet has led to more efficiency. However, the term has been mentioned decades before as Schumpeter already distinguished between five types of innovation of which new ways to organize businesses closely resembles the term “business model innovation” of today (Croitoru, 2012).

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2.2.1 Definitions of a Business Model

In recent years, the term “business model” has received considerable attention in academic literature. Despite the fact that business models have become prevalent with the advent of the Internet, the knowledge economy and e-commerce, its lineage goes back to when societies began to engage in barter exchange (Teece, 2010; Zott et al., 2011). Nowadays customers have more choices, variegated customer needs, and alternatives are becoming more transparent. Thus, organizations must become customer-centric as technology has enabled lower cost provision of information. Without a well-developed business model, it will be difficult to create- and capture value, which is particularly true for Internet businesses. The reason for this is that customers often expect that some basic services on the Internet must be free of charge (Teece, 2010).

However, scholars do not agree on the exact definition and it is often difficult to reconcile these definitions with each other (see Appendix B for complete chronological overview of the definitions). What’s more is that the business model is often studied without an explicit definition and are often used interchangeably with other concepts, such as strategy and revenue model (Chesbrough & Rosenbloom, 2002; Morris, Schindehutte, & Allen, 2005; Shafer, Smith, & Linder, 2005; Zott et al., 2011). One reason for this may be due to the fact that the business model has not gained a prominence in a variety of functional and academic literature (Chesbrough & Rosenbloom, 2002; Morris et al., 2005; Shafer et al., 2005). There is a lack of theoretical grounding in economics or business studies and it is often being

neglected that it must be approached from an interdisciplinary perspective (Teece, 2010). For instance, according to Zott et al. (2011), there is a need for cross-theoretical perspective. Despite these differences, there are some emerging themes, namely (1) e-business and the use of technology in organization, (2) strategic issues such as value creation and firm performance and (3) innovation and technology management (Zott et al., 2011). On the other hand, Morris et al. (2005) identified other categories, namely economic-, operational- and strategic levels.

Good business models yield value propositions that are compelling, achieve cost- and risk structures and enable value capturing (Teece, 2010). Business models reflect the strategic choices of a firm (Shafer et al., 2005). Other functions include the market segment, structure of the value chain and the formulation of a competitive strategy (Chesbrough & Rosenbloom, 2002). In short, it is about the benefit the organization will deliver to its customers and how it

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will capture a portion of that value back (Osterwalder & Pigneur, 2010; Teece, 2010). Moreover, Chesbrough & Rosenbloom (2002) conceive the business model as a device that mediates between technology development and economic value creation. The chances of a good design are better if the entrepreneur has a better understanding of the customer needs, considers the alternatives, analyzes the value chain and is a fast learner (Teece, 2010).

However, business models are often eligible for a patent, thus, it is advisable to impede copycat behavior through create processes which are hard to replicate and to establish a level of opacity, i.e. making it difficult for outsiders to understand (Teece, 2010). This can be done through the proprietary level in which truly unique combinations are produced to create a sustainable competitive advantage (Morris et al., 2005). Furthermore, technological innovation by itself will not work; it should be coupled with the development of a full-fletched business model as a technology remains latent if it is not commercialized

(Chesbrough & Rosenbloom, 2002; Teece, 2010). Often a paradigm shift is involved in which knowledge is often cognitively limited due to being biased by the dominant logic of earlier successes. Thus, startups are likely to be less constrained in the evaluation of alternative business models (Chesbrough & Rosenbloom, 2002). Market failures are often the result of bundling inventions and complements into products without combining it with services. What is more is that the relationship between the business model and the firm performance is highly dependent on the context (Teece, 2010). Technical uncertainty is not just a product of

technology itself, but also a function of the external environment. Therefore, the value network, which consists of suppliers, partners, distribution channels and coalitions, must increase the supply of complementary goods on the supply side, which increases the network effect among consumers on the demand side (Chesbrough & Rosenbloom, 2002; Shafer et al., 2005). According to Amit & Zott (2001), these complementarities provide more value than having each of the goods separately. On top of that, these so-called network effects can lead to a so-called lock-in, which prevents customer from moving to competitors.

Overall, the academic literature lacks a consensus about the exact definition of a business model. This has hindered the progress of a number of issues, such as identifying taxonomies (Morris et al., 2005). However, most scholars agree that it is not a strategy and that it involves multiple theories from a variety of disciplines, such as the resource-based view (RBV) (Amit & Zott, 2001; Chesbrough & Rosenbloom, 2002; Morris et al., 2005;

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Shafer et al., 2005). Moreover, business models do not only involve value creation, but also the capturing of that value (Osterwalder & Pigneur, 2010). Last but not least, there is a clear link between business models and innovation management (Zott et al., 2011). One important role for a business model is to unlock the full potential embedded in new technology and convert it into outcomes. For instance, according to Chesbrough & Rosenbloom (2002), Xerox tried to make the best economic use of the powerful capabilities inherent in the

technology of electrophotography. In addition, business models can even shift the focus from a fossil fuel economy to a more sustainable clean-tech economy (Johnson & Suskewicz, 2009).

2.2.2 Typologies

For the last couple of years, academics have been calling for a general classification of e-business models. Due to the fact that e-business models tend to be abstract, it is fundamental to recognize the similarities and differences between business models to develop classes

(Lambert, 2006). Basically, a taxonomy is a mechanism to conceptualize different constructs and elements (Al-Debei & Avison, 2010). In spite of the appearance that no taxonomy of business models exist in existing literature, various scholars have endeavored to conceptualize the types that are relevant to research (Lambert, 2006). Defining and selecting these so-called typologies is an arbitrary process. In addition, the majority of the taxonomies has resulted from the need to simplify the research of scholars (Pateli & Giaglis, 2004).

To begin with, according to Timmers (1998), electronic commerce includes the trading of physical products and information. There exist a multitude of business models based on value-chain de-construction, interaction patterns, such as 1-to-1 and 1-to-many, and value-chain re-construction. Based on these criteria, there are eleven business models, namely e-shops, e-procurements, e-auctions, e-malls, third-party marketplaces, virtual communities, value-chain service providers, value-chain integrators, collaboration platforms and

information brokers. These business models can be classified along two dimensions. First, the degree of innovation ranges from doing traditional activities online to more innovative ways. Second, the degree of integration ranges from single function business models to fully integrated functionality, such as value-chain integrators.

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Similarly, whilst Rappa (2006) found nine business model categories including brokerage models, advertising models, infomediary models, merchant models, manufacturer (direct) models, affiliate models, community models, subscription models and utility models, Weill & Vitale (2001) found eight atomic e-business models, which includes content

providers, direct to consumer, full service provider, intermediary, shared infrastructure, value net integrator, virtual community and whole of enterprise/government. These typologies are both B2B and B2C except for content providers. These business models, which are often reinvented tried-and-true models, can easily be combined as, for instance, it is not uncommon to blend an advertising model with a subscription model (Rappa, 2006).

However, instead of classifying business models based on either the degree of innovation- and integration or architectures, Lam & Harrison-Walker (2003) suggested to classify them according to two key strategic objectives, namely relational and value-based objectives. Most companies either expand their businesses online to bypass the middlemen or to reach more customers with more offerings. The first objective is relational, which pertains to direct access, network development or corporate communications. The second objective is value-driven, i.e. how they can add value to companies. This can be achieved through

financial improvements or product/channel enrichment. Based on these objectives, six e-business models can be identified, namely (1) merchants and portals, (2) virtual product differentiation, (3) brokerage, purchase assistance, and retail networks (4) interactive networks, (5) internet promoters and (6) image building.

Last but not least, Internet business models are affected by specific shifts in the competitive and technological landscape and thus, business models need to frequently adapt to sustain a competitive advantage. Based on the 4C typology, which is considered to be holistic and exhaustive, Wirtz et al. (2010) were able to cover the majority of business

activities to derive a small number of categories while ensuring within-group differences. The four types are content, commerce, context and connection, which can all be applied in hybrid or integrated platforms. First, content-orientated business models are focused on delivering content, such as the Wall Street Journal, and are reliable on advertising revenues, premium content and direct revenue streams. Second, commerce-based platforms use online media to offer cost-efficient transactions for buyers and sellers. Their revenues consist of sales revenues and commissions. Third, context-orientated business models focus on the

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information already existing on the Internet to increase transparency and reduce complexity. Their business model relies on indirect revenue streams. Last, connection-orientated business models aim at providing the infrastructure to enable users to connect with each other. These business models are primarily based on indirect revenues or subscription-based fees.

Similarly, as most authors suggest two dimensions in order to rate the business models, Dubosson-Torbay et al. (2002) have also proposed a multi-category approach to ensure that a business model can be positioned with regard to multiple dimensions. Based on an extensive literature review, they came up with the principal dimensions, such as the user role, interaction pattern, nature of the offerings, pricing system, level of customization, economic control, level of security, level of value integration, value/cost offerings, scale of traffic, degree of innovation and the extent to which power is more on the buyer or seller side.

Overall, it appears that these typologies are not exhaustive or definitive. The reason for this is that business models are constantly evolving due to the Internet and a firm may combine several business models as part of its strategy to customize their offering for a narrow segment, bypass the middlemen or create a micro network to connect isolated users (Lam & Harrison-Walker, 2003; Rappa, 2006). All in all, Lambert (2006) suggested that the majority of typologies were designed to suit the needs of the researcher. Therefore, taxonomy has to be constructed from a large number of variables derived from the exiting business model typologies to serve as a general classification of business models. As business models are constantly evolving, it is necessary to re-perform the analysis to incorporate new business models in the taxonomy.

2.2.3 Ontologies

Progress in the field of business models has been hampered by a lack of consensus about the components (Morris et al., 2005). According to Lam & Harrison-Walker (2003), there is no single coherent framework that explains the rationale behind the business models in the virtual space. When discussing about business models, only parts of the business model, such as value flows and the business actors, are usually depicted (Osterwalder & Pigneur, 2002; Pateli & Giaglis, 2004). All of them are considering the same object, but from different angles (Dubosson-Torbay et al., 2002). Thus, it appears that the business domain knowledge is, indeed, fragmented (Al-Debei & Avison, 2010). Therefore, there is a need to integrate the

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existing views to create a unified framework as the business model can help companies understand, communicate, share, change, simulate, learn and measure the different aspects of the business model of their firms (Al-Debei & Avison, 2010; Osterwalder & Pigneur, 2002). Such a rigorously framework is also known as an ontology (Osterwalder & Pigneur, 2002).

The majority of the academic literature views the business model as a hierarchy of components and decomposing them to sub-components (Pateli & Giaglis, 2004). Osterwalder & Pigneur (2002) conceive the business model as the missing link between strategy and business procedures. Based on a building-block-like methodology, their framework consists of four pillars, which are product innovation, customer relationship, infrastructure

management and financial aspects. First, product innovation covers the value proposition, target customer, which can be either to businesses and/or individuals, and capabilities to underpin the value proposition (Dubosson-Torbay et al., 2002). Second, the infrastructure element describes the configuration necessary to deliver the value proposition. This comprises the value configuration, resources and assets, such as human assets and copyrights, and partner network to shrink transaction costs and focus on core competencies. Third, through the use of IT, firms can redefine their customer relationships. For instance, an information strategy outlines the collection of information to excel in customer relationships and the exploitation of that information to discover new opportunities. In addition, distribution channels and trust- and loyalty are vital to establish loyalty and relationship capital. Especially with the emergence of the Internet it is necessary to build trust in e-business environments. Last but not least, financial aspects, the last pillar of their framework, consist of the revenue model, cost structure and profit model (Osterwalder & Pigneur, 2002).

Following a similar approach, Gordijn & Akkermans (2001) have identified three levels of analysis: the strategic level, the value level and the operational level. Their research focuses on the creation of value to build an ontology called the e3-value ontology. Multiple actors typically create innovative objects of value that are created, exchanged and consumed. It is important to note that new parties can easily be added or replaced. For instance, brokers might easily appear or disappear if buyers might use a middleman to combine power to achieve a better negotiation position.

Yet, based on a content analysis of existing views, Al-Debei & Avison (2010) identified four dimensions, namely value proposition, value architecture, value finance and

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value network. Their analysis revealed that the business model is an intermediate layer that is positioned between the business strategy and business processes, which is considered to be versatile and dynamic in order to cope with the continuous changes in the environment (Al-Debei & Avison, 2010; Osterwalder & Pigneur, 2002). These so-called V4 BM Dimensions provide a holistic but abstract understanding of the underlying logic of a business model to assist decision-making practices, leverage technological artifacts, act as a distinct form of knowledge and fill the gap between strategy and business processes. These elements are substantially interrelated and independent. Designing a business model requires a balance of different and often conflicting design requirements (Al-Debei & Avison, 2010).

For this reason, Amit & Zott (2015) have elaborated upon their original framework consisting of novelty, lock-in, complementarities and efficiency to identify four antecedents of business model design. First of all, the goals to create and capture value refer to the

fulfillment of the perceived customer needs. On top of that, business model designers need to be concerned with creating value for other stakeholders as well as keeping the balance of competing demands among stakeholders. This increases the lock-in effect as opportunity costs are increased. Secondly, design theory suggests a trade-off between efficiency-centered design and novelty-centered design. For instance, mindfulness refers to an openness to new information to view context from different perspectives. It leads to more alternatives.

Mindless copying the business model design of an incumbent might even be costly. Thirdly, stakeholder’s activities involve collaboration with a variety of stakeholders across its

ecosystem. More specifically, if the business model relies on activities performed by reputable partners, this might enhance the lock-in component. Lastly, the last antecedent is anchored in environmental constraints. Especially external constraints, such as regulations, affect the feasibility of the business model design. Key to dealing with such situations is to create novelty rather than mimicking existing models. Constraints can act as stimuli and challenges. Especially startups are prevalent in altering their design attitude.

To conclude, there appears to be lack of consensus about the components of a solid business model (Lam & Harrison-Walker, 2003; Morris et al., 2005). Regardless, it appears that the following components are common among the variety of ontologies, namely mission, target market, value proposition, resources, key activities, cost structures and revenue models

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(Pateli & Giaglis, 2004). Thus, it appears that business models embrace a broad spectrum of organizational processes.

2.3 Theoretical Framework

2.3.1 Business Model Canvas

Based on an extensive literature review, it is apparent that sharing economy business models do not fit in the typologies described above. The reason for this is that it can be considered to be a blend of a brokerage- and community model as many firms are reliant on a P2P setting and offer the ability to connect to other individuals along common interests (Rappa, 2006). However, like previously stated, it appears that these typologies are not exhaustive or definitive due to the fact that business models are constantly evolving (Lam & Harrison-Walker, 2003). Especially the Internet has fueled this trend as it facilitates online-based communities and networks for little transaction costs (Möhlmann, 2015). For instance, if there are no transaction costs between agents in the sharing economy, the structure of multiple industries will only consist of individuals as larger companies are, in fact, established for the very reason of minimizing transaction costs (Henten & Windekilde, 2016). In addition,

progress in the field of business models seem to be hampered by a lack of consensus about the components and definitions of a business model (Möhlmann, 2015). According to Cohen & Kietzmann (2014), management scholars have barely scratched the surface on sharing economy business models and their implications. Thus, given the lack of academic research concerning the conductive P2P business models in the sharing economy, this thesis will explore the commonalities in terms of CSFs across business models in the sharing economy. Based on these commonalities, the critical success factors can be identified. For this reason, the business model canvas will be used to identify the critical components of a business model, summarize the data and act as a guiding tool during the interviews (Osterwalder & Pigneur, 2010).

Every organization has a business model as they make key choices to observe the main consequences derived from those choices. However, business models are often too complex to work with, thus, it must be simplified (Casadesus-Masanell & Ricart, 2010). Based on the four pillars of the Business Model Ontology (BMO), Osterwalder & Pigneur (2010) have

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designed a generic business model template, namely the Business Model Canvas (BMC), to facilitate a shared understanding and discussion. The BMC model has been widely applied and tested around the world as it has been downloaded more than 5 million times from the website (Strategyzer, 2015). The BMC is an intuitive and easy-to-use visual tool, which covers critical elements for a successful business model in a shared language (Wallin, Chirumalla, & Thompson, 2013). Such a pictorial design is often the best means to

communicate information, facilitate understanding and achieve in-depth insights (Pateli & Giaglis, 2004; Shafer et al., 2005). According to Strategyzer (2015), the main contributions of the BMC lies in creating a shared language, better conversations on strategy and better

collaboration. Moreover, a business model can serve as exemplar role models, which can be copied or adjusted by other startups. Also, business models can also serve as scale models, which offer representations of or short-end descriptions of things existing in the real world. Thus, scale models can be considered to be copies of real-life phenomenon; role models are models which are considered to be ideal (Baden-Fuller & Morgan, 2010). As mentioned by Osterwalder & Pigneur (2010), the value proposition lies at its heart as it solves the problem or the needs of the customer.

To evaluate the critical success factors of the sharing economy business model, the assessment of the criteria is dependable on the purpose of the evaluation (Pateli & Giaglis, 2004). According to Leidecker & Bruno (1984), CSFs are characteristics, conditions or variables which can have a significant impact on the success of a firm competing in a particular industry. Similarly, Amit & Zott (2015) have proffered that rather than outdoing competitors by imitating, firms might turn to mindfulness to derive new ways of doing business. Moreover, Hamel (2000) has identified four factors to measure the potential of a business model, namely efficiency, uniqueness, fit and profit boosters. Yet, according to Pateli & Giaglis (2004), the evolution of evaluating business models is among the less mature areas of business model research. The reason for this is that the majority draws from general theory and is driven by financial criteria (Leidecker & Bruno, 1984). Once the CSFs are identified, a sub-(meta)-model emerges based on the common characteristics of the business model of each real world company which apply to a specific industry (Osterwalder, Pigneur, & Tucci, 2005). However, these emerging critical success factors will be approached from an

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abductive approach, which means that they will be corroborated with critical success factors from existing literature to find evidence (Dubois & Gadde, 1999).

2.3.2 Working Propositions Development

In order to successfully answer the research questions stated in the previous chapter, descriptive and explorative studies are in need of working propositions. Based on existing literature, several speculations can be made with regard to the critical success factors of sharing economy-based business models. These research propositions will either be supported or refuted (Rowley, 2002). As the antecedents of sharing economy-based business models will be elaborated further using the business model canvas, the tool will be used to identify key working propositions.

For starters, a MSP has two features which set it apart from other models, namely the direct interaction between two or more parties and the affiliation of each party with the platform. There are various reasons to opt for a MSP. For instance, MSPs create and capture value through indirect network effects (Hagiu & Wright, 2015). According to Amit & Zott (2015), this could lead to a lock-in effect. According to Botsman & Rogers (2010), attaining a critical mass is a prerequisite for collaborative consumption systems. They define critical mass as “the existence of enough momentum in a system to make it become self-sustaining.” This so-called momentum is needed as network effects determine the platform’s value to any given user based on the number of users on the network’s other side (Eisenmann, Parker, & Alstyne, 2006; Piscicelli, Cooper, & Fisher, 2015). Especially internet ventures offer their services for free to attain a critical mass. After making enough investment, the other side will be targeted as well (Muzellec et al., 2012). Therefore, the following working proposition can be made:

Working proposition 1: Attaining a critical mass is considered to be essential for successful

sharing economy-based business models.

As noted by Osterwalder & Pigneur (2010), multi-sided platforms serve two or more independent customer segments. There is a growing interest in these so-called multi-sided platforms (MSP), which involves two or more parties on a platform in which the prices are

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often market-driven. Each side derives positive externalities from the participation of other parties. For example, the business sides can micro-target their audience based on private information which can be retrieved from the end-user side. On the other hand, consumers can receive something for free. In fact, value is being co-created within the distribution channel with the end-users. Sharing networks are often studied under the umbrella of product-service systems as a way to consume more sustainably by extending the intensity of product use (Philip et al., 2015). According to Muzellec et al. (2012), the value propositions of such PSSs are continuously evolving due to the fact that the value propositions in the early stages of development are geared towards the end-users. After attaining a critical mass, the venture usually starts to focus on business partners.

Furthermore, based on the literature review, it was found that economic benefits are the determining factor when choosing for a sharing option (Hamari et al., 2015; Lamberton & Rose, 2012; Möhlmann, 2015; Philip et al., 2015; Schor & Fitzmaurice, 2014). However, unlike economic benefits, sustainability does not have a significant effect on the satisfaction and the likelihood of using a sharing option again (Hamari et al., 2015; Möhlmann, 2015). Concerning the providers, a motivation for providers was the gratification of their things being used due to an aversion to unused utility (Philip et al., 2015). For instance, the lessor of a car might share to exploit idle assets, whereas the lessee pays for the experience of

temporary access (Bardhi & Eckhardt, 2012; Philip et al., 2015). However, according to Botsman (2013), research on the relationship between business and sustainability in the sharing economy is scarce. Thus, it is important to have two compelling value propositions (Hagiu & Wright, 2015; Muzellec et al., 2012).

Working proposition 2: Sharing economy-based business models are in need of two different

value propositions.

According to Philip et al. (2015), P2P renting is characterized through a self-service exchange in which extensive co-creation is required. The company provides all the necessary means for clients to help themselves (Osterwalder & Pigneur, 2010). Thus, the following working proposition can be made:

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Working proposition 3a: Sharing economy-based business models rely on a self-service

exchange.

Regarding the customer relationships, it appears that there is a shift from transaction-based to long-term relationship-based relationships (Wallin et al. 2013). These relationships lead to higher switching costs (Osterwalder & Pigneur, 2010). For instance, companies invite the community to co-create value in the form of ratings (Dubosson-Torbay et al. 2002). This is also known as user-generated content (Wirtz et al., 2010). Especially the Internet allows users to care about certain products and services through recommendations, requests, or complaints. They are also more powerful in shaping what a company offers (Gansky, 2014). The reason for this is that after making a purchase, a series of activities has to be undertaken to gain its intended value (Humphreys & Grayson, 2008). The majority of existing literature views both sides of the platform as co-creators (Muzellec et al., 2012).

Working proposition 3b: Co-creation is essential to create value within sharing

economy-based business models.

Due to the fact that consumer-object relationships are being transformed, some have argued that the clear distinctions between consumers and producers and customers and employees are fading away (Bardhi & Eckhardt, 2012; Humphreys & Grayson, 2008). The more a

relationship with a user is rewarding, proximal and continuous, the more an individual feels associated with a certain organization (Humphreys & Grayson, 2008). In other words, this so-called connected consumption is based on peer-to-peer relationships rather than existing market actors (Schor & Fitzmaurice, 2014). It is essential for sharing economy businesses to foster the community in which shared goods are being exchanged. Being part of a community can even convey a certain status or power (Belk, 2007). Users can directly get in touch with each other which eventually goes beyond economic exchanges (Humphreys & Grayson, 2008; Kim et al., 2015). For instance, Zipcar users do not only collaborate with the intermediary, but also with other community members (Bardhi & Eckhardt, 2012). Basically, participants are enticed to contribute to something larger than themselves (Richardson, 2015). According to Botsman & Rogers (2010), belief in the commons is necessary as people are able to

Examining the critical success factors of sharing economy-based business models in the Netherlands : a multiple case study approach