Sharing business models and institutional entrepreneurship : the Uber case

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MASTER THESIS

BUSINESS ADMINISTRATION INTENATIONAL MANAGEMENT UNIVERSITY OF AMSTERDAM

Sharing Business Models and Institutional

Entrepreneurship

The Uber Case

Xandra Koelemeijer

University of Amsterdam 10159975 Supervisor

Ms. F. Ciulli

Second supervisor

Ms. M. Westermann-Behaylo

Amsterdam, June 24, 2016

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Statement of Originality

This document is written by Xandra Koelemeijer, 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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Acknowledgements

Firstly, I would like to thank my supervisor, Ms. Francesca Ciulli, for her advice, feedback and her flexibility during my master thesis. Especially within the first period of the thesis I had some difficulties in developing my topic and developing the research purpose. The encouragements of Ms. Ciulli have been very helpful. Furthermore, I would also like to thank my family and friends for their understanding and support during the stressful period of writing my thesis. The many cups of tea and coffee with friends during my long hours at the university were very welcome and helped me to finish this thesis successfully.

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Abstract

The notion of sharing changed significantly with the rise of technological developments towards the creation of online platforms. Sharing economy start-ups have developed innovative business models, and by attracting investors many have grown into sizeable multinational enterprises (MNEs). These start-ups are shrewdly using the lack of regulation for technological services and thereby push for institutional change. In doing so, sharing economy MNEs have become disruptors that change the rules of the game in many industries. Relative to other studies in the field, this research takes the first step to investigate the link between institutional entrepreneurship and business model innovation. This study aims to investigate MNEs adopting innovative business models that engage processes of institutional change in multiple national environments. To analyze these institutional changes a multiple embedded case study is conducted on Uber, a sharing economy MNE active in the taxi and mobility industry. The Netherlands, the United States, the United Kingdom, and Australia provide the context of this study. Ultimately, the results show that business model innovations are effective mechanisms in trying to change institutions. The mechanisms that are examined – creating a divergent vision, mobilizing allies, users, and financial resources – can be used as instruments to mould an institutional environment into one that suits their business. Finally, this paper investigates how sharing economy MNEs tend to leverage their social position and use persuasive argumentation and negotiations, thus appealing to a diverse set of stakeholders and gaining legitimacy.

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1. Introduction

Society’s perception of ‘sharing’ has changed significantly in the past few years – sharing bikes, cars, and tools, is gaining popularity (Cohen & Kietzmann, 2014). On an average day, approximately 247,000 items are sold via Etsy and 140,000 accommodations are rented via Airbnb (Marshall, 2015). According to Cohen and Kietzmann (2014), the sharing economy – in which peer-to-peer transactions between customers and service providers are conducted via Internet applications – is booming. Attracting investors, a number of start-ups in the sharing economy have become multinational enterprises (MNEs); many of these MNEs have developed very innovative business models that disrupt traditional businesses. Regular hotels and taxi companies are losing market share to these MNEs that provide the same services, such as Airbnb and Uber.

The rapid growth of these businesses brings with it several other implications. First, sharing economy MNEs are operating in so-called legal gray areas. Regulation is often not sufficient and does not apply to these non-traditional business models (Cannon & Summers, 2014). Thus, policy makers and governments are having difficulty dealing with the companies, as laws and regulations often predate the digital revolution. Moreover, sharing economy MNEs are using the mazes of the law to drive commerce; their innovative business models seek ways in which they can operate, and thereby bypass laws and regulations. Ultimately, the business models start where regulations end; they change the rules of the game and are pushing for institutional change. Because of this type of behavior, sharing economy MNEs can be defined as institutional entrepreneurs, described as “actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones” (Maguire, Hardy & Lawrence, 2004, p. 657). Institutions themselves can be defined as the “cognitive, normative and regulative structures

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and activities that provide stability and meaning to social behavior” (Scott, 2013, p. 132), and may transform due to pressures and challenges of new businesses. Regulations and business-related norms and values should be reviewed and updated to the digital era.

As sharing economy MNEs are active in multiple countries, they have to deal with multiple institutional environments. The capability of MNEs to influence various institutional environments depends on activities the companies engage. Institutional change is complex and involves different types of actors and forces (Cantwell, Dunning, & Lundan, 2010); thus, MNEs must carefully consider their actions and strategies coping with these different forces. A set of mechanisms for institutional entrepreneurs has been identified in various studies such as Battilana, Leca and Boxenbaum (2009); their work posits that institutional entrepreneurs should articulate a divergent vision in order to gain legitimacy for their business and initiate institutional changes. But a divergent vision alone is not enough in order to succeed – support has to be built by mobilizing partners, resources, and allies. These activities are often intertwined; a divergent vision may evolve over time with the process of mobilizing allies and resources. However, this set of mechanisms, which have been developed by Battilana et al. (2009) without reference to a specific type of organization, has not yet been tested in empirical studies. A study of institutional entrepreneurship’s mechanisms adopted by MNEs is needed. Indeed, while different types of organizations can engage in these practices, extant literature has argued that MNEs are particularly likely to engage in institutional entrepreneurship (Kostova, Roth & Dacin, 2008, Regner & Edman, 2013). And Kostova et al. (2008) state that MNEs are more actively engaged in changing institutions as MNEs face multiple and conflicting institutional environments. Despite the rising interest in the role of MNEs as active agents in institutional change processes, relevant literature has given it little attention.

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Most related studies focus on the complex relationship between MNEs and institutions (Bruton, Ashlstrom, Li, 2010; Dacin, Goodstein, Scott, 2002; Scott, 2013; Garud, Hardy & Maguire, 2007). But limited attention has been given to the discussion of how institutional theory constructs can be applied to the context of international business and, more specifically, to MNEs (Regner & Edman, 2013; Kostova et al., 2008). Previous studies on institutional entrepreneurship (e.g. Regnér & Edman, 2013; Vachani & Smith, 2004) have focused on new and innovative products, services, and practices, but miss the notion of the emergence of completely new business models such as those introduced by MNEs. Sharing economy MNEs shed new light on the relationship between MNEs and institutions. Thus, there is a need to explore how MNEs adopting sharing business models engage in institutional entrepreneurship.

The focus of this study will lie on the sharing economy business models, and the proactive attitude of MNEs in the institutional change process. Taking into account the limited attention of extant literature on MNEs as active agents of institutional entrepreneurship, the following research question has been developed:

How do MNEs adopting sharing economy business models try to change institutions in the multiple national environments in which they operate?

To explore this question, this study adopts a qualitative research design. A multiple embedded case study is conducted to analyze the institutional change process driven by sharing economy MNEs with innovative business models. Uber, a sharing economy MNE active in the taxi and mobility industry, is selected as a case to analyze the institutional change process. Uber can be seen as a disruptive MNE, meaning that their innovative business model creates new institutional values and displace established companies. Furthermore, Uber is active in multiple institutional environments; this study focuses on the company’s presence in The Netherlands, the United States (US), the United Kingdom (UK),

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and Australia. Multiple sources of archival data are used for the analysis: two national newspapers from each country, as well as corporate documentation.

Relative to extant literature, this research takes the first step in investigating the link between institutional entrepreneurship and business model innovation. To thoroughly understand the process of institutional change, an analysis of MNEs adopting new business models is necessary (Barry & Pollman, 2016). MNEs can be seen as active change agents that are remaking the institutional landscape into one that supports their business (Barry & Pollman, 2016). This study contributes to a deeper theoretical understanding of institutional entrepreneurship by examining different actions adopted by MNEs to change institutions. It develops an understanding of new business models in the sharing economy and how they change the rules of the institutional game. Additionally, the study identifies challenges and opportunities for institutional frameworks associated with those business models. Identifying these challenges and opportunities has important policy implications, as it offers policymakers an understanding of how institutional change can be initiated by sharing economy MNEs. Since regulators have the ultimate responsibility of adopting new legal frameworks, it is useful for them to be prepared for the rise of the sharing economy business model.

In the following chapter, an overview of the existing literature is given. The concepts of institutions, institutional entrepreneurship, and the sharing economy are discussed, and a research question and propositions are developed. The next chapter covers the methodology of this thesis, explaining the choice of qualitative research design and research method. Thereafter, the findings of the data analysis are presented. In the conclusion and discussion section, the findings are summarized and the limitations of the study are discussed. Lastly, the recommendations for future research are given.

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2. Literature Review

This chapter provides a theoretical background so as to better understand the interplay between MNEs and institutions. The key concepts in this field of research are explored, starting with the notion of institutions. Afterwards, an overview of the concept of institutional entrepreneurship is given; sharing economy business models are also explained in the context of institutional entrepreneurship. Lastly, the research question is presented and a set of propositions are developed.

2.1 Institutions and Institutional Change

Organizations base their strategic choices on their institutional environment, industry conditions, and firm-specific resources (Peng, 2000). An institutional environment generates a path guidance, which, due to conformity to rules, norms and constraints, leads to ways of thinking and acting that are desirable for organizations (North, 1990). Overall, institutions can be seen as the rules and structures that guide individuals and organizations in a particular environment; they are socially sanctioned norms of behavior embedded in culture and ideology (North, 1990). The most widely used definition of institutions is the one developed by North (1990, p. 351): “[…] the rules of the game in a society or, more formally, […] the humanly devised constraints that shape human interaction.”

Another definition presented by Scott (2013, p. 132) states that institutions are “cognitive, normative and regulative structures and activities that provide stability and meaning to social behavior.” Scott defines three pillars that together form the institutional profile of a specific environment: cognitive pressures are symbols and shared meanings; normative pressures are the norms and values of a society; and regulative pressures are seen as rules, regulations or laws (Scott, 2013). It is possible that institutional environments differ per country or region (Kostova & Roth, 2003); thus, organizations are sometimes involved in

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multiple change processes across countries. Companies have to deal with all differences and accordingly adapt their business strategy per institutional environment (Kostova & Roth, 2003). The challenge for organizations is to achieve a fit between their activities and the multiple institutional environments in which they operate (DiMaggio, 1988), creating a continuous interaction between institutions, organizations and their strategic choices (Peng, 2000).

Because organizations are embedded in a specific institutional environment, their activities are influenced by several social structures and are guided by the institutions around them (Scott, 2013). However, in order to survive and succeed, organizations need credibility and social acceptability (Scott, 2013). They require legitimacy, which can be defined as “a generalized perception or assumption that the actions of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs, and definitions” (Suchman, 1995, p. 574). Suchman (1995) refers to institutional framework a “socially constructed systems of norms.” The institutional framework interacts with organizations by indicating which types of organizational behavior are desirable and acceptable in society (Scott, 2013). Organizational action may be guided by the need to gain legitimacy. In this case, organizations can be viewed as agents working to legitimize their activities.

However, organizations do not only allow themselves to be guided by institutions. When agents believe in more efficient outcomes or seek higher institutional quality, they will put institutions under pressure. Initially, institutions were seen as stable and unchanging, but recent scholarship in institutional theory has acknowledged the possibility of institutional change (Scott, 2013). Institutions may drive change but are also subjected to change themselves over time (Dacin et al., 2002; Hardy & Maguire, 2008); thus, companies can affect the maintenance and development of institutions. Institutional change is related to all

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companies that serve various societal functions, such as business and government (North, 1990). Underlying institutional norms and regulations emphasizes those societal functions. As firms may thus be active in the process of institutional change, they often encounter a great deal of resistance. Initiatives to change the institutional environment can create confusion as they shift strongly held norms, values, and regulations that are deeply embedded in society (Scott, 2013). Overall, institutional change is seen as a political process that reflects the power and interests of several actors (Greenwood, Suddaby & Hinings, 2002). As noted, institutions can guide companies and actors, but these organizations and other actors are also capable of bringing about institutional changes (Battilana et al., 2009).

2.2 Institutional Entrepreneurship

As previously discussed, companies are capable of bringing about institutional change; institutional entrepreneurship places emphasis on the active role of field constituents in this process. Institutional entrepreneurship can be defined as “activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones” (Maguire et al., 2004, p. 657). Battilana et al. (2009) explain the concept of institutional entrepreneurship by showing how actors try to change institutions despite the external pressures to maintain the status quo. Institutional entrepreneurs can be organizations, individuals, as well as groups of organizations or individuals, who tend to break with existing rules and practices while institutionalizing new ones (Garud et al., 2002). DiMaggio (1998, p. 14) states that “new institutions arise when organized actors with sufficient resources see in them an opportunity to realize interests that they value highly”.

Moreover, institutional entrepreneurs are different from regular entrepreneurs because the former aim to change and regulate institutions. Their mission is to establish new norms, rules, and types of behavior that will help to achieve their business goals (Dacin et al., 2002).

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Those business goals can be both profit- and non-profit-based, and institutional entrepreneurs may link their market view with larger societal perspectives (Greenwood et al., 2002). However, change agents are only seen as institutional entrepreneurs when they initiate divergent changes that interrupt conventional institutions, and when they are actively involved in the implementation of those changes (Battilana et al., 2009). Divergent changes refer to alternatives that challenge a given institutional context (Battilana et al., 2009), and can occur within an organization or the wider context in which an actor operates. Hence, initiating and developing those divergent changes is a core duty of institutional entrepreneurs.

The implementation of a change process can be distinguished by three activities: developing a vision, mobilizing allies and resources, and motivating others to contribute to and develop the vision (Greenwood et al., 2002; Battilana et al., 2009). Institutional entrepreneurs supporting the implementation of institutional changes should articulate a vision for the change to mobilizing allies and resources. These activities are often intertwined: a divergent vision may evolve over time in the process of mobilizing allies and resources. An explanation of each activity is given below.

Developing a vision comprises the building of a case to show what an institutional change includes and why change is needed. As the changes promoted in the vision tend to break with behavior and rules people take for granted, the vision has to be framed in such a way that people understand the need for it (Battilana et al., 2009). Previous research about framing a vision highlights several issues that institutional entrepreneurs face while developing and presenting their vision. They have to explain the problem they intend to solve, what their preferred solutions are, and how these solutions are better than the incumbent practices (Misangyi, Weaver & Elms, 2008). These aspects correspond to the three forms of framing processes that are used to legitimize a change project and are defined as diagnostic framing, prognostic framing, and motivational framing (Misangyi et al., 2008). Diagnostic

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framing relates to identifying problems and the need for improvements. Through this framing, organizations seek to uncover failing institutions and expose the problem with current institutional practices (Misangyi et al., 2008). Prognostic framing is more action-oriented, consisting of showing what types of actions need to be adopted in order to solve the stated problems. In this type of framing, the goal is to portray the change project in such a way that it lines up with the interests, values, and problems of the potential implementers (Battilana et al., 2009). Motivational framing, lastly, provides reasons why potential allies should engage in the project. To achieve a successful motivational frame, organizations have to be able to provide compelling reasons, related to the interest of the target group, to support their vision (Misangyi et al., 2008).

As a divergent vision can seldom be executed without support, institutional entrepreneurs must be active in the process of mobilizing allies (Battilana et al., 2009). The aim of this process is to define and redefine the entrepreneur’s own identity in order to attract others to join the change project (Battilana et al., 2009). Institutional entrepreneurs have to cooperate with potential partners, meanwhile emphasizing the shortcomings of current institutionalized practices, values, and norms. Allies can be mobilized through the use discourse and the mobilization of resources (Battilana et al., 2009). Using discourse may consist of various elements, such as rhetorical strategies, using symbolic stories and past events, using analogies to help the legitimization of the divergent vision, or defining heroes and villains as key to the future of the institutional field (Greenwood et al., 2002). The discourse ultimately has to be built around the interests, values, and norms of the target group of allies.

Resources – whether they are financial or derived from social positions like authority and social capital – need to be mobilized to support the implementation of an entrepreneur’s vision (Misangyi et al., 2008). Authority can support institutional entrepreneurs in the

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legitimization process and promote the discourse created among other stakeholders (Maguire et al., 2004). In order to establish support, a company’s social position has to be in line with the divergent vision they want to execute. Social capital refers to the institutional entrepreneur’s network of organizations and position within the network of social relations. Such a network or position can leverage access to information and political support (Maguire et al., 2004). Moreover, a company’s social position can be used for promotion and helps institutional entrepreneurs in seeking allies. One option for new institutional entrepreneurs without a valued social position is to seek a partner that is higher up on the social ladder. Endorsement by a partner may ensure legitimacy of the change project (Battilana et al., 2009). Social capital can also serve as a link between different stakeholder groups (Battilana et al., 2009). Creating similarities between groups based on their interests, values, and norms can have a positive effect on the persuasive power of the entrepreneurs’ vision. Common ground between stakeholder groups can also increase the discourse around the change project.

2.3 MNEs and Institutional Entrepreneurship

Previous institutional literature has paid limited attention to MNEs as a unit of analysis, often studying domestic firms instead (Kostova et al., 2008; Regner & Edman, 2013). MNEs are different from domestic firms, as they operate in multiple international contexts and often have a more complex internal structure. As MNEs have a range of different business activities, these enterprises face multiple institutional environments that they may transform (Hardy & Maguire, 2008; Regner & Edman, 2013). It is particularly relevant to study MNEs as institutional entrepreneurs for two main reasons. First, as argued by Kostova et al. (2008), MNEs are more actively engaged in changing institutions than domestic firms. Second, due to their presence in multiple countries, MNEs face multiple, conflicting institutional environments (Kostova et al., 2008). Thus, studying the relationship between MNEs and

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MNEs acting as institutional entrepreneurs are active in multiple institutional fields, and thus have to deal with institutions and institutional change processes idiosyncratic to each national environment (Hardy & Maguire, 2008). MNEs are exposed to a wide scale of institutionalized practices internationally: in both their home and host countries, MNEs have to deal with several practices that put pressure on organizations and guide their business behavior. Dealing with such various institutional environments might facilitate an active attitude towards changing institutions. In order to deal with various institutional environments – i.e. different sets of norms and values across different countries – MNEs envision alternative solutions and activities while seeking overall efficiency (Hardy & Maguire, 2008; Kostova et al., 2008).

Since MNEs are globally active, they strive to institutionalize their practices or business models on a wider scale. Thus, MNEs that are active as institutional entrepreneurs must be skilled institutional players in order to achieve a successful change (Dahan, Doh & Guay, 2006). MNEs and institutions are strongly interdependent (Cantwell et al., 2010), yet few studies have focused on MNEs’ commitment to changing institutions. Instead of being merely reactive, MNEs can be seen as active agents of institutional change (Regner & Edman, 2013). Although carrying out change is challenging, MNEs acting as institutional entrepreneurs are capable of bringing about or at least initiating such transformations (Maguire et al., 2004).

2.4 The Sharing Economy

Thanks to the internet, the last years have seen the emergence of new firms disrupting the business models that have been dominant in a set of industries for decades. The innovation of these firms has consisted in the adoption and promotion of sharing or collaborative business models. Firms like Airbnb and Uber adopting these new business models have expanded internationally at a rapid pace, becoming MNEs that today are present in a wide range of

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countries. Due to the newness of the sharing economy, it has no straightforward definition. Overall, sharing can be defined as “the act and process of distributing what is ours to others for their use as well as the act and process of receiving something from others for our use” (Belk, 2007, p. 27). Botsman and Rogers (2010) describe the collaborative consumption trend as an emerging socioeconomic groundswell. The broadest definition of the sharing economy is “an economic model based on sharing underutilized assets from spaces to skills to stuff for monetary or non-monetary benefits” (Botsman & Rogers, 2010). Collaborative consumption is based on what people need and the availability of those needs throughout society. The terms collaborative consumption and sharing economy have been used synonymously in past studies (Bardhi & Eckhardt, 2012).

The focus of collaborative consumption is on peer-to-peer commerce, accessibility of goods and services instead of owning them, efficiency, and convenience. Value in the sharing economy is created through the means of access instead of ownership. Organizations active in the sharing industry often show one or more of the following four characteristics defined by Gansky (2010): first, the goods or services delivered by the company are something that actually can be shared within an industry; second, the focus is also on physical goods that can be shared; third, technology enables companies’ networks to provide information about the goods and services and also to connect consumers; and finally, much of the communication about the company is based on word of mouth and social media.

What sharing economy firms have in common is a focus on efficiency and practicality (Ganksy, 2010; Rauch & Schleicher, 2015). With the use of technology and web-based mobile networks, more data is accessible for organizations. Organizations can use this data to deliver highly targeted goods and services at the right time and location for customers (Bostman & Rogers, 2010). At this early development stage of the sharing economy, new business opportunities are still being created and consumers want to be part of it (Bardhi &

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Eckhardt, 2012). The available technology and data are able to reduce a transaction cost, which makes sharing goods and services cheap and is ultimately what creates convenience for both organizations and consumers (Rauch & Schleicher, 2015). Rauch and Schleicher (2015) note that this is the most important aspect of the new sharing economy.

The sharing economy can be seen as a social, economical, and technological shift. The social shift is based on the nature of the sharing economy, which, being based on peer-to-peer transactions, has an inherently social character (Botsman & Rogers, 2010). Sharing economy companies basically create new social networks, whereby they enable their users to do business with each other. Peer-to-peer commerce creates a specific culture of ‘whatever is mine, is yours’ (Botsman & Rogers, 2010). Additionally, sharing economy businesses are often based on consumer reviews (Koopman, Mitchell & Thierer, 2015). For example, on Airbnb, people are able to base their choice of housing on the ratings of others who stayed there before. Aggregating consumer reviews contributes to the sense of trust and community between users.

The rise of the sharing economy will also have economical impacts. As stated previously, sharing economy businesses aim for efficiency and practicality. By creating a marketplace in which users can exchange goods and services, sharing economy firms use underutilized assets (Rauch & Schleicher, 2015). Thus, accessible goods are replacing the ownership of goods (Bardhi & Eckhardt, 2012). This also reduces the overall transaction costs of goods and services, as the same physical assets and goods are deployed more intelligently and the middleman is cut out.

Lastly, the sharing economy shows a technological shift. Technological developments are the most important aspect in the sharing economy, as they have made possible its large scale of sharing and exchanging goods and services (Belk, 2007). Technology influences the acceleration of the sharing economy trend and enables companies to connect people as a first

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step of sharing, lending, trading, and swapping goods and services. According to a report launched by McKinsey (Dobbs, Manyika, & Woetzel, 2015), urbanization, accelerating technological change, responding to the challenges of an aging world, and greater global connections are the forces that will rewrite the global economy operating’s system. Today’s different social, economical, and technological shifts, of which sharing economy MNEs are a part, push governments to think about smarter ways of using resources (Dobbs et al., 2015).

2.5 Sharing Economy Business Models

The whole sharing economy is based upon accessibility of goods and services for consumers (Bardhi & Eckhardt, 2012). A greater number of people are appreciating the possibility of sharing instead of owning, as sharing is often a more optimal way of reaching the same goal. With the increase of customer awareness and positive evaluation of the sharing economy, new types of business models have emerged. Existing companies and start-ups have been transforming the traditional business models or designing completely new ones to compete in this emerging industry. The concept of business models is widely used in the management literature; however, different definitions have been developed. Teece (2010, p. 20) states that business models are “management’s hypothesis about what customers want, how they want it and what they will pay, and how an enterprise can organize to best meet customer needs, and get paid well for doing so.” Business models are also defined as “stories that explain how enterprises work” (Magretta, 2002, p. 97), a “statement of how a firm will make money and sustain its profit stream over time” (Stewart & Zhao, 2000, p. 290), and “logical, data, and other evidence that demonstrates how a business creates and delivers value to customers” (Chesbrough & Rosenbloom, 2002, p. 529).

Extant literature shows that business models are not only a facilitator of innovations, but they can become the subject of innovation themselves (Chesbrough & Rosenbloom, 2002;

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new, or modifying the [current], business model” (Amit & Zott, 2010, p. 2). Many firms are looking for new ways to develop their business by seeking pathways out of declining markets, shrinking profits and commoditization of its products (Kortmann & Piller, 2015). Business model innovation is yet another option; it can leverage resources as managerial and entrepreneurial skills, as well as knowledge underlying the value chain of the industry (Schaltegger, Lüdeke-Freund & Hansen, 2012). Business model innovation can be seen as a strategic move to improve the performance of an organization. In a mature industry, it may even be the case that business model innovation is the only option for organizations to develop. Business model innovation is ultimately a key to improve competitive advantage by commercializing new ideas (Chesbrough & Rosenbloom, 2002).

The sharing economy model is an example of successful business model innovation. There is a significant difference between the models of traditional businesses and those adopted by companies active in the sharing economy. Traditional business models cover two core aspects: the process of value creation, and value capture in the value chain resulting in the sale of a product to a costumer (Matzler, Bailom, Friedrich von den Eichen & Kohler, 2013). Value creation for customers is at the heart of business (Matzler et al., 2013), and can be defined as “the transformation of resources into customer value through innovation, manufacturing and distribution” (Kortmann & Piller, 2015, p. 90). Second, value capture describes how an organization delivers customer satisfaction and how it plans to make money as a result (Matzler et al., 2013). Value capture is defined as “the receipt of customer payments made in expectation of subjective benefits from acquiring value” (Kortmann & Piller, 2015, p. 90). Sharing economy business models also cover these two primary aspects, but they additionally increase the willingness and ability of stakeholders to participate in the business model and other firm activities (Kortmann & Piller, 2015). They offer a more open business model in which consumers become a central element. As previously noted, because

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of technological developments, sharing economy firms can open up their business model for consumers on a wide scale—including large consumer communities throughout a country. Kortmann and Piller (2015) define this type of business model as a ‘sharing-platform operator,’ namely, as a company coordinating a peer-to-peer market through which consumers can offer goods and services to other users of the platform. One example of such a business model is Lyft, an application for smartphones that matches the user seeking transportation with local drivers (Lyft, 2016).

Creating a reliable business model is very complex and time-consuming (Gansky, 2010). The sharing economy presents MNEs with challenges different than those of traditional and more structured economies; thus, for such companies it might be even more difficult to create an accepted business model. Most of the business models of firms active in the sharing economy are based on technological innovations. These firms have to develop their products, which can be commercialized, on a rapid pace since competition is fierce and technology develops very quickly. Similar to sharing economy firms, technology based start-ups are situated in a difficult, ever-changing environment (Trimi & Berbegal-Mirabent, 2012). Business model innovation can be noted as one of the most important elements of sharing industry ventures (Gansky, 2010). Since the life cycle of technological products is very short, the business model of such a venture should be continuously improved (Trimi & Berbegal-Mirabent, 2012). The continuous improvements of sharing economy firms also have important implications on the firm’s environment: when acting as institutional entrepreneurs, firms can be directly involved in contributing to their changing environment. Their business models should be adaptable and flexible, which allows for incorporating unforeseen changes and developments (Teece, 2010). Moreover, sharing economy firms are adopting new business models and engaging in activities that aim to influence regulations, norms and values in the industries in which they operate.

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By serving two user groups - users who are offering and users who demand - sharing economy platform business models are considered two-sided markets. Both user groups enjoy several benefits from the platform network, which enables direct interaction between groups (Kortmann & Piller, 2015). A sharing economy organization’s external relations with other stakeholders (and thus its users) may predict its success, since those organizations are active in an uncertain environment (Trimi & Berbegal-Mirabent, 2012). As previously noted, customers are an important determinant in gaining legitimacy as institutional entrepreneurs; a great deal of importance has to be placed on customer feedback and information. This includes knowing what customers want and understanding their needs (Kortmann & Piller, 2015). As a result, organizations can show that they truly know the customer and can address

their demands (Chesbrough & Rosenbloom, 2002). As the whole business model of sharing economy MNEs is developed around an online community of users, consumers can be considered a key role of such MNEs aiming to gain legitimacy.

2.6 Conclusions and Proposition Development

MNEs are subjected to their (institutional) environment, which is characterized by norms, rules, and other structures and practices (Kostova et al., 2008; Kostova & Zaheer, 1999). These enterprises experience multiple heterogeneous and conflicting environments worldwide, and can behave both passively and actively in dealing with those various environments. Passive in the sense that MNEs act according to established institutions, adopting the institutional environment’s rules and norms; but MNEs also may have a more active attitude to their environment by initiating change and challenging institutional frameworks (Kostova et al., 2008).

Previous studies have not thoroughly investigated institutional entrepreneurship in combination with MNEs; the notion of emerging new business models has been neglected. Being present in multiple countries, dealing with and driving change in different institutional

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contexts is nothing new for sharing economy MNEs. However, using business model innovation as a mechanism for institutional entrepreneurs to transform institutions is, and serves as the subject of this research. As noted above, MNEs can be actively involved in the process of institutional change. They engage in this type of behavior when convinced that changing practices and rules are more efficient and beneficial for the organization. The research gap in the existing literature will be addressed by attempting to answer the following research question:

How do MNEs adopting sharing economy business models try to change institutions in the multiple national environments in which they operate?

An MNE active in transforming its institutional environment into one that supports its business can be seen as an institutional entrepreneur (Battilana et al., 2009). MNEs acting as institutional entrepreneurs are more likely to adopt innovative business models in order to challenge the current institutional environment; these new business models and ideas can also lead to future benefits for consumers, society, and institutions. One such innovation that benefited society is the sharing economy business model. Sharing economy MNEs aim for convenience and employ convenient and efficient ways of doing business. While the notion of sharing products, resources, and services is already hundreds of years old, the sharing economy model is different in that participating firms make money from connecting consumers with each other and offering them a platform to communicate. These firms’ business models are dependent on consumers, as they do not have their own products or services that can be sold (Ganksy, 2010; Rauch & Schleicher, 2015). Facilitating collaborative consumption among consumers requires identifying what people need and making those needs easily available throughout society. Thus, sharing economy MNEs focus on the convenience of peer-to-peer commerce, with the help of technological developments.

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However, as sharing economy business models are very different from traditional business models, they must first be accepted before they can be successful. Developing these new business models and gaining market share has tremendous effects on society, as they transform not only people’s notions of sharing and collaborative consumption, but also the institutional environments in which they operate. The institutional change process is needed for such MNEs to gain legitimacy and support, thus the next proposition is developed:

Proposition 1: MNEs active in the sharing economy are likely to see institutional entrepreneurship as part of their business strategy.

There are a few mechanisms that can be performed by institutional entrepreneurs in order to drive institutional change. The MNE’s vision must be developed in such a way that other stakeholders are convinced and willing to support it. Support can be found through mobilizing allies and resources (Battilana et al., 2009) i.e., through partnerships, creating discourse, and seeking endorsers of the company. Allies may help with the legitimization of the MNE’s divergent vision, and may also contribute to a company’s social position, which relates to the company’s place in the eyes of the society (Battilana et al., 2009). A broad social network can also leverage access to different types of information and political support. Seeking partnerships is very important for sharing economy MNEs, as they offer unusual services and thus have to gain legitimacy. It is advisable for these companies to seek partners and emphasize the shortcomings of current institutional practices. Gaining legitimacy and creating support are critical activities in the institutional change process; as institutional entrepreneurs, sharing economy MNEs are likely to mobilize allies in order to transform the institutional environment. Therefore, the following proposition, which is in line with the three mechanisms developed by Battilana et al. (2009), is developed:

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Proposition 2: Sharing economy MNEs are likely to mobilize allies in order to try to change institutions.

The mobilization of resources is an additionally important aspect of the process of transforming institutions (Battilana et al., 2009). Acquiring legitimacy for a new business is challenging, even more so for an entirely new business model, thus, the legitimization process is costly. New ideas are hardly ever popular when first introduced, so sharing economy MNEs must prepare themselves to fight a long battle to gain acceptance. Financial assets are thus needed for sharing economy MNEs in order to succeed in their early stages of institutional entrepreneurship; such resources are also useful to encourage other stakeholders to back the MNE’s change project. According to this reasoning, sharing economy MNEs thus need additional resources to transform institutions, which results in the following proposition:

Proposition 3: Sharing economy MNEs are likely to mobilize resources in order to try to change institutions.

To develop an understanding of how MNEs adopt sharing economy business models, a set of propositions have been developed and presented. The stated propositions are deliberately broad. In this research, broad propositions leave room to investigate the actions of MNEs and thereby develop new, more specific propositions.

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3. Method

3.1 Research Design

The purpose of this study is to investigate how sharing economy MNEs adopting new business models trying to drive institutional change. In order to answer the research question, the study will adopt a qualitative research design. A qualitative design is chosen since it enables the opportunity to make sense of the subjective and socially constructed meaning of the phenomena being studied (Saunders, Lewis & Thornhil, 2012). As the aim of the study is to further develop the theory of institutional entrepreneurship, while seeking new insights from the sharing economy literature, this research has an exploratory purpose. The topic of sharing economy is only recently investigated and the topic is not yet fully understood. Therefore, it is convenient if the research design is flexible and open for adjustments as the data analysis process can highlight new focus points. Considering the research question and the exploratory nature of the research, a case study is desirable (Saunders et al., 2012).

A case study research design helps to answer questions like ‘why?’ and ‘how?’ (Yin, 2013). In order to gain insight into the process of institutional change it is important to investigate the change process within its context, by considering the relationship between MNEs and institutions. A case study allows investigating the change process within its real-life context by using multiple data sources. Therefore, a case study is the most appropriate method in order to answer the research question (Yin, 2013). A main advantage of a case study method is that it creates the opportunity to challenge theoretical assumptions in the field (Saunders et al., 2012). Besides, the context of the phenomena is key and a case study takes this into account. However, with a case study research it is hard to draw cause-effect relationships (Saunders et al., 2012). The goal of this study is to seek a consistent pattern of actions of the same MNE across different countries; therefore this case will include multiple

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units of analysis (Yin, 2013). One company, active in multiple national institutional environments will be assessed. The main rationale for conducting a multiple case study is to achieve literal replication, to demonstrate international similarities between the institutional entrepreneurship activities adopted by the sharing economy MNE across a national institutional environment (Yin, 2013). Additionally, a multiple case study increases the generalizability in comparison to a single case study (Yin, 2013).

3.2 Case Selection

The sharing economy effects many established industries and is still in development. The new sharing economy business models have important implications on traditional industries. As sharing economy firms are active in the legal grey area, they have to pave their own way. This results in increased interactions with their institutional environments. Sharing economy MNEs deliver a valuable addition to the institutional change process and the relationship between politics, companies and society. Considering the characteristics and the nature of the sharing economy, this new phenomenon can add important insight to the theory of institutional entrepreneurship.

The sharing economy also has major consequences for the taxi industry. Uber, an American sharing economy MNE, is actively involved in the changes in the taxi industry. Uber is an Internet company that mediates between travelers and providers of passenger transport in different countries. The company connects via its mobile app customers in 445 cities around the world with official taxi drivers, but also with private chauffeurs (Uber, 2016). Uber can be seen as an international, disruptive entrepreneur as it offers a very innovative service in the taxi industry. Its business model is non-traditional, putting policymakers in a difficult position (Kist, 2014). As a consequence, in the last years Uber has been experiencing disputes with government and traditional taxi companies. Institutions and

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that using drivers without taxi-licenses is unsafe and illegal (Kist, 2014). This makes Uber an interesting case for analyzing the contribution of sharing economy business models to the institutional environment. The activities and behaviors that sharing economy MNEs show in trying to change institutions will deepen the understanding of the concept of institutional entrepreneurship.

Furthermore, Uber is present in various institutional contexts, with each their own sets of norms and values. In order to achieve literal replication four developed countries will be used for the multiple embedded case study. The selection of the countries is further based on whether data sources of the country are produced in the Dutch or English language, as national press- and news articles should be assessed. The selected countries are the US, the Netherlands, the UK and Australia. As the study aims to attain literal replication, choosing similar countries for the data analysis is advised. Cultural, economic and political characteristics are compared to assess whether countries are similar.

Moreover, the model of Hofstede (1991) is the most well-known and frequently used model when assessing cultural differences. Looking at the six Hofstede dimensions of culture, it can be acknowledged that those countries are highly similar in cultural terms (Hofstede, 1991). Furthermore, by comparing the gross domestic product (GDP) of the countries the economical differences between countries can be assessed. All four countries have a high and growing GDP. Although the law systems differ between the four, the US and Australia have a common law system while the UK and the Netherlands have a civil law system, all four countries have a stable institutional environment. Accordingly, there are thus no major country differences that matter in the context of this study.

Several databases have been checked to find company information about Uber. However, Uber does not release any corporate documentation or annual reports. Furthermore, beside the information about when they entered the country, no further information about

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their presence and market share in the Netherlands, the UK, the US or Australia is known. Uber seems to be very protective about exposing information. The collected company information is presented in Table 1.

Key facts about Uber

Ownership 100%

Operating Revenue 112,500,000 USD

Number of Employees 3,500

Number of Companies in Corporate Group 2 Number of Recorded Shareholders 24

Number of Recorded Branches 14

Category of Company Transportation

Origination United States (San Francisco)

Founder and CEO Travis Kalanick

Table 1: Company information of Uber

3.3 Data Collection

For this study multiple sources will be used to collect the data, which ensures construct validity (Saunders et al., 2012). Working with multiple sources serves as a control mechanism, which ensures a correct interpretation of the data. Besides, using a multiple case approach also guarantees external validity. Since the concepts are viewed and analyzed by using different sources among different companies, a deeper understanding is gained about the institutional process.

As institutional changes cannot be captured in a snapshot, this study will take a longitudinal approach. To get a deep understanding of the impact of Uber on the institutional environment, a specific timeframe will be used. Uber was launched in 2010 in the US, entered the world market in 2012 and by 2014 they started experimenting with other carpooling features (Uber, 2016). Uber has entered Australia, the UK and The Netherlands in 2012. This holds that the timeframe used will be adjusted for each country. As the process of institutional change driven by Uber is still ongoing and much debated in the news, the timeframe will run until 2015. The time period is sufficiently long to capture the development of the change

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process, which already occurred. The amount of documents and articles available in this timeframe will certainly be sufficient to provide an answer to the research question. See the below table (2) for the exact time periods

Country Timeframe

The Netherlands 2012 – 2015

United States 2010 – 2015

United Kingdom 2012 – 2015

Australia 2012 – 2015

Table 2: Time period per country

Since the interest of this study is to gain insights into the process of institutional change driven by MNEs, secondary data sources are used. Information about Uber is best gathered via the analysis of materials developed and formatted for society consumption. Newspaper articles are stable and exact sources (Yin, 1994). Such archival documents are publicly accessible and can be obtained easily. As Uber is much debated in the news, this resulted in a large quantity of documents and articles in the given time period. Furthermore, as noted by Saunders et al. (2012) focusing on archival data is appropriate when it has a viable contribution to the research. Besides, newspaper articles provide directly or indirectly the rationales for a company’s position during conflicts and controversies (Patriotta, Gond & Schultz, 2011). Additionally, documents released by the company will also be used as a data source, since they may provide insight in the norms and values of the company. The collected secondary data provides a rich data source.

In the given timeframe, secondary data is collected from several sources. For each country a selection of two national newspapers is made. For The US the New York Times and the Washington Post are selected, and for the UK The Guardian and the Financial Times. Furthermore, for the Netherlands De Volkskrant and NRC Handelsblad are selected and The Australian and the Financial Review are used for the data about Australia. The

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aforementioned newspapers are carefully selected. Firstly, all the newspapers have a high circulation. They all have a daily circulation, with weekends as exception, which makes it possible to follow the developments around the company on a day-to-day basis. Lastly, all the newspapers have a national focus and do not only report regional news. They reflect both national matters as international news. This is desirable since this study is focused on four different countries. Overall, they provide reliable insights in order to answer the research question. The newspaper articles are searched via the newspaper-database LexisNexis. First, there was searched in the newspapers for ‘Uber’ in general and for ‘Uber’ in the headline or first paragraphs. In this way all articles for the selected newspapers highlighting Uber were found. In total 3.449 articles were found. Then, all newspaper articles were briefly scanned and only the relevant ones were saved for analysis. Blogs, opinion articles and editorial letters were excluded, as they do not provide an objective statement about the behavior and actions of the company. This resulted in a total of 996 articles left for coding. In Table 3, the number or articles used for the data analysis per country and per newspaper is shown. Additionally, corporate documentation of Uber is used. This data is retrieved from the company’s ‘Newsroom’ website. The Uber ‘Newsroom’ publishes articles about their latest developments, but also about their (inter)national victories and drawbacks. The whole Newsroom website was scanned, and after deleting the irrelevant articles 23 articles of this website are used in total. Those 23 Newsroom articles provide information across the four countries.

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Country Newspaper Documents collected

Documents coded The Netherlands De Volkskrant 90 57

NRC Handelsblad 104 53

United Kingdom The Guardian 537 144

The Financial Times 412 179

United States New York Times 546 209

Washington Post 956 207

Australia The Australian 378 64

Australian Financial Review

252 83

Total: 3.275 Total: 996

Table 3: Data sources, newspapers

3.4 Data Analysis

Since the phenomena being studied is relatively new, this study will combine a deductive and inductive approach (Saunders et al., 2012). A deductive approach holds using data in order to test theories, whereas inductive theory reasoning develops new theories from the data (Saunders et al., 2012). The developed propositions are derived from extant literature and will be tested by the data of this study, which results in a deductive approach. The inductive approach is applied as the aim of the research is to develop the established theories and concepts, there must be room for the data to complement the developed propositions. The literature about the sharing economy, business model innovation and institutional entrepreneurship is used to develop themes and codes in order to analyze the data. Besides, the data is also used to develop new themes and patterns. The themes used to code the data can be found in Table 4. This table also presents the key words and indicators that are used to code the data. The key words and indicators present the main themes of the overall code.

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Theme Description Keywords and Indicators

Institutional Change Actual institutional change happened influencing a company’s businesses or caused by a company’s’ activities.

Law change, permit, allow, approval, regulations and legislation.

Mobilizing Users Activities and behavior of the company focused on the consumers in order to create a solid group of loyal users a company can build on. Part of the strategy of ‘growing too big to ban’.

Support, backed by,

petitions, fan base, user base, loyalty, customer satisfaction and user communications.

Mobilizing Allies Institutional entrepreneurs must be active in the process of mobilizing allies to define and redefine their own identity in order to attract others to join the change project (Battilana et al., 2009).

Mobilization, allies, partners, sponsors, endorsement, hiring executives, social capital and status.

Mobilizing Resources Institutional entrepreneurs have to get their hands around specific resources, mostly financial in order to bring about change

(Battilana et al., 2009).

Financial resources, investments, investment round, and resources regarding their social position.

Persuasive Argumentation and Negotiations

Actions undertaken by MNES to legitimize their business model, using persuasive argumentations and negotiation tactics to appeal a diverse set of stakeholders.

Persuasive arguments, negotiation tactics, gaining legitimacy or acceptance, appealing stakeholders, creating common ground between stakeholders.

Table 4: Developed themes from the literature

In contrast with construct and external validity, internal validity is not relevant in this study. As the aim of this study is to explore the relationship between MNEs and institutions

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data analysis process can be summarized in the following steps. First, the fundamental themes will be derived from the literature. Second, various codes are developed following the relevant themes. Hereafter, the themes will be used via Atlas to code all the data. The data analysis software, Atlas, helps to visualize and report the data in order to focus on the meaning of the collected data (Bazeley & Jackson, 2013). Lastly, a case study database is developed. This shall be in the form of an excel table with all the coded data. The tables, one for every country, will be presented in chronological order since the longitudinal nature of the study. Using case study databases also ensures reliability (Yin, 2013). It is clearly presented which method was used to analyze the data and how the results have been achieved. This makes it easy to repeat this study in another context.

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4. Results

Analyzing the data provided some key insights in Uber’s business model and business strategy by acting as institutional entrepreneurs. The different activities and behaviors of Uber in the US, Netherlands, UK, and Australia were examined. As Uber is a privately hold American company, the investments were all handled in the US causing that only the part of Uber US will include an overview of the activities Uber performed to get financial resources. However, the money raised by investors was also spent in other countries, so the results for the Netherlands, the UK, and Australia will also show the mobilization of resources. This chapter will present the findings following the data analysis. The presented results were derived from the sources among the ones illustrated in the method section. An overview of the obtained data per country will be given. Furthermore, the amount of quotes and the key quotes for each code per country are provided in the appendix (A, B, respectively).

4.1 Uber United States

Uber, founded in 2010 by Travis Kalanick, started their business in San Francisco. All companies founded in Silicon Valley had more or less the same attitude and goal, grow fast, be successful and deal with drawbacks later. Uber’s mentality in the US was nothing different, “we are here, deal with it” (Dougherty & Isaac, 2014). It had major plans to conquer the US and expand rapidly by serving the customer in the best way possible. They used technology to deliver people what and when they want it. At this moment, Uber is serving all major cities in the US offering a various spectrum of services.

Uber’s culture could be defined by its willingness to go up against the institutional landscape. With this mentality Uber received numerous complaints, threats and fines from regulators in their first active years in the US. However, none of this has stopped Uber in

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fulfilling their mission to transform the institutional framework. Uber has been fined multiple times and they ignored every regulation of the taxi industry. They paid all fines, and just continued with their services. Uber claimed that the landscape was shifting and they were just being innovative. Uber wanted to reduce regulation in the taxi industry in the US, since the by government created taxi medallions were not serving the market properly. Taxis were often late and the consumers were not satisfied with the quality of their services. Uber stated that they were not against regulation, but they only wanted regulations on things that really matter, such as safety and universal service. By making such statements Uber tried to appeal a larger group of people. They sought common interest among diverse stakeholders, both drivers and consumers, and tried to convince them to endorse Uber’s vision. Serving the interest of its stakeholders would motivate them to support Uber’s battles across the country. This was another way of seeking allies and helped Uber to achieve legitimacy. Uber stated that: “We are eager for smart and modern regulations. The taxi industry in the US is broken. It hasn't worked well for more than 40 years. It has refused to keep up with customer needs; it has refused to keep up with driver needs.” (Greenhouse, 2014). This statement was again made to serve the interest of a broad group of stakeholders, both consumers in need for transportation solutions and taxi drivers in general.

As many citizens in 2010 were very pleased with Uber’s services, Uber entered several cities before waiting for governmental permission. Dealing with regulation was only done when Uber already built a fan base. As cities tried to regulate Uber, they fought back using their users in their institutional change process. Consumers could be mobilized in the case of a threat or opportunity. In line with this tactic, Uber launched a policy blog called ‘Under the hood’. This blog showed articles about the company, driver stories, customer experiences and articles written by researchers and academics, all in favor of Uber. Uber’s customers have become their biggest asset in their process of transforming the institutional

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framework. Travis Kalanick even stated that in the US “Cities should simply let the customer decide” (Bilton, 2013). The Uber fan base proved to be a powerful addition to the company’s institutionalization practices. They integrated special features in the app whereby a text could be sent to all users or a petition could be signed with one push on a button. They thus used their fan base to transform institutions. When Uber made it clear to its users that a political threat could harm their services, the users were willing to sign a petition or send out e-mails. For example in 2012, the moment when Washington tried to ban Uber, Uber users bombarded the city council with thousands of e-mails.

However, Uber did not only use consumers to create support for their institutional change project. Uber itself also directly targeted the government with some provocative activities and persuasive arguments. In 2014 Uber engaged in multiple activities. They mailed over sixty thousand fliers to voters in legislative districts with the following message: “Don't let special interests leave you sitting on the curb” (Helderman, 2014) referencing to the overly regulated taxi industry. Another example was the use of television ads meant to undermine the mayor of New York, Bill de Blasio. He wanted to limit the number of Uber cars in New York city. This behavior was very remarkable sine Uber did not even use television ads in their regular marketing campaigns. After the mayor of New York approved the new taxi legislation they removed the ads. The new legislation granted an exception for Uber so they were allowed to operate legally. Furthermore, Uber paid lawyers and lobbyists to challenge the laws and to seek ways to try to kill the unfavorable laws for Uber. They were not afraid of challenging every unfavorable statement in court repeatedly. They started protesting after every legal decision. For example in 2014, they pushed for a new law, which allowed Uber to continue their operations as long as they complied with a number of rules including basic safety, reporting requirements and insurance.

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To improve their social image after the negative attention they received for those types of actions, they cooperated with other companies, including United Airlines (in 2014), Starbucks (in 2014), Facebook (in 2015) and Spotify (in 2015). Partnerships with such image-conscious companies were carried out to improve Uber’s reputation and social position within society. Furthermore, partnering with Spotify, Starbucks and Facebook was also focused on the consumers, by proving consumers a more pleasant ride with Uber. Customer satisfaction was determining for the social position of the company. A higher social position in society would ultimately lead to legitimization. Therefore, it could be stated that Uber was thus active in creating legitimization. The partnership of Uber with United Airlines was not a matter of improving the social position. This partnership was created as Uber wanted to benefit from a partner at and around the airport as Uber fought for permission to offer rides to major airports in the US. To achieve legitimacy Uber also needed to attract enough drivers, and satisfy the customers. In 2014 Uber partnered with several car manufacturers and lenders who supplied Uber drivers without a vehicle of a car for a favorable price. This not only showed some good will for their drivers, it also created options to recruit more people to become an Uber driver. By making it possible for everyone to become an Uber driver, Uber showed that they highly valued their users. Delivering and creating such additional options contributed to the acceptance of Uber in society. This type of behavior could thus be marked as activities regarding the creation of legitimacy.

Equally important to Uber as closing sponsorships to mobilize partners, was to change people’s view at the transportation systems in the US. Enthuse people about the sharing economy was important to Uber to maximize their user base. Creating a conversation or discussion around the company also contributed to their legitimization process. Uber also created discourse by opening up for cooperation with institutions. Uber aimed to work closely with regulators to advise and help them to deal with services they have never seen before and

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to build adequate regulations. In order to achieve a collaborative network, the company made some efforts throughout the years. Uber showed that they could reduce the driving under influence (DUI) numbers and they would be capable of creating jobs to help reduce the unemployment rate

Over the years Uber has been involved in disputes and regulative discussions. Cities have questioned how they should deal with this new innovative ride-hailing service. But Uber was getting close to put the regulatory woes to an end. In 2015 an important Governor, Andrew Cuomo, even stated “Uber is one of these great inventions, start-ups, of this new economy and its taking off like fire through dry grass” (McKinely & Fitzsimmons, 2015). In 2015 Uber celebrated many wins throughout the US. Lawmakers approved regulatory frameworks for the app-based car services and provide them a permanent legal status. In some states they even approved Uber to customers at airports as well, allowing the company to pick up and drop off customers.

To overcome hurdles on their way to initiate institutional changes, Uber raised several million dollars through various investment rounds. The investment withdrawn from the investments rounds were meant to expand globally but mostly to finance their lawsuits and pay off their outstanding penalties. While Uber was considered the fastest growing start-up around the world, it took actions to build new revenue streams and rising capital. Therefore it could be stated that Uber was actively mobilizing financial resources in order to try to transform institutions. For example in 2015, Microsoft agreed to make an investment in Uber. Additionally, Microsoft also agreed of letting go hundred engineers from their Microsoft's mapping team to join Uber. This was not the only agreement Uber made about hiring away personnel from other companies. To strengthen the company’s top levels they have done some remarkable hiring’s. One of them was the transfer from David Plouffe to Uber in 2014. Plouffe was the senior policy advisor of president Obama, at Uber he became the senior vice

Sharing business models and institutional entrepreneurship : the Uber case