Business Information Technology- Assignment
AJ-773
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Information Systems: A Manager’s Guide to Harnessing Technology V 3.0
By John Gallaugher
Chapter 9
The sharing economy, collaborative consumption, and creating more efficient markets through technology
Learning Objectives
Recognize firms often categorized as part of the “sharing economy” or participating in “collaborative consumption.”
Gain a sense of market size, impact, investment, and business valuation in these sectors.
The sharing economy
Technology allows product and service providers to connect with consumers.
Offers far greater reach and efficiency than traditional markets.
Generation of ‘citizen suppliers.’
Product owners become renters.
New class of micro-entrepreneurs providing personal services.
Categories of products are collaboratively consumed.
An individual takes possession of an item for a period of time and then returns it for use by others.
Internet-enabled market makers.
Roots in eBay and CraigsList.
Collaborative consumption
Examples of firms:
eBay, CraigsList
Zilok, RentTheRunway, Chegg
Etsy, CustomMade
oDesk, eLance, Crowdspring
Angie’s List, TaskRabbit
Drizly
Uber, Lyft, ZipCar
LiquidSpace, ShareDesk
HomeAway
LendingClub, KickStarter, GoFundMe
Learning Objectives
Identify the factors that have contributed to the rise of the sharing economy.
Understand the competitive factors that influence success in marketplaces that support collaborative consumption.
the rise of collaborative consumption
Prolonged worldwide economic recession and stagnant wages boost consumer interest in low-cost alternatives and encourage people to offer services for hire.
Early players gain scale, brand, and financial resources.
Technology allows for peer-to-peer supply without need for inventory.
Some services do oversee inventory to gain more control and offer higher quality.
In fragmented markets, marketplaces extend the value chain by connecting suppliers and customers with search and discovery, scheduling, payment, reputation management and more.
Word of mouth through social media accelerates the growth of the sharing economy.
Some concerns include trust and safety issues, insurance, taxes and regulatory fees.
Learning objectives
Identify and give examples of how large firms are investing in, partnering with, and building their own collaborative consumption efforts.
Gain insight into the advantages of collaborative consumption firms for traditional industry players, and enhance brainstorming skills for identifying possibilities for other firms.
Large firm involvement
Google: Substantial investor in UberLink
Conde Nast: Invested in Rent the Runway
Walgreens: Task Rabbit partnership
IBM: Delivery deal with Deliv
General Motors: Canceled its partnership with RelayRides through OnStar
Avis: Acquired ZipCar
Learning objectives
Understand how Airbnb has built a multi-billion dollar sharing economy firm.
Recognize the appeal the firm has for suppliers and consumers.
Identify sources of competitive advantage and additional challenges as the firm continues to grow.
Understand how technology can build trust, even in an area as sensitive as selling stays in private homes.
airbnb
Multi-billion dollar hospitality industry empire.
Over 11 million guests have stayed with Airbnb during its first five years with listings in 34,000 cities and 192 countries.
Listings include:
Castles
Yurts
Caves
Water towers
Private islands
Igloos
Glass houses
Tree houses
Unique properties
Some of the more unique properties available on Airbnb:
Airbnb challenges
Trust is essential for the sharing economy to work.
Negative incidents involving theft and unwanted visitors have attracted plenty of unwanted press.
The firm offers a $1 million guarantee for hosts, secure payment guarantees, and 24/7 support phone service.
Airbnb monitors transactions and communication at a deep level:
Reservations
Host/Guess communication
Subsequent reviewers
Technology hunts for scams
Competition looms, including HomeAway.
Learning objectives
Understand the appeal of Uber both to drivers and consumers.
Discuss how Uber leverages technology to radically improve on the service and cost structure of traditional and cab and limo services.
Recognize how technology also empowers a data-driven enterprise that crafts strong and deepening competitive advantage over time.
Uber growth
Operating in 128 cities and 37 countries worldwide.
Reportedly processed over $1 billion in rides in 2013, keeping about 20 percent of each transaction.
Google incorporated Uber into Google Maps.
Investors valued the firm in spring 2014 at $18 billion.
Uber claims to create over 20,000 new jobs a month.
Uber drivers in NYC make an average of $90K a year.
Customers complain of surge pricing:
Uber raises prices where supply doesn’t meet demand.
Driven by data
Employs mathematicians with PhDs in nuclear physics, astrophysics and computational biology.
The staff optimizes algorithms to determine number of drivers, where demand is, dynamic pricing.
Software system shows maps, cars, locations of customers.
Uber worth and future
Analysts differ on current valuation.
Regulatory concerns and maintenance of quality service are challenges to be faced.
Business Insider claims it could grow to a $100 billion company.
Doubling in size every six months.
Looking to expand into shipping and logistics.
