Growth strategies of Sharing Economy Platforms: A multiple case study

Abstract

Sharing Economy has gained increasing importance in both academia and the managerial world, as some of the field’s pioneers have delivered on earlier expectations of success. During the past decade, a handful of Sharing Economy start-ups have grown into well-established businesses with true market power in their respective industries, massive financial valuations and large user bases. Despite the popularity of the field in public discussion, previous research still lacks theoretical understanding and empirical evidence on how Sharing Economy Platforms evolve from a start-up to a competitive, sustainable business in the long-term. The gap in research is addresses by conducting a detailed case study on evolution of two Sharing Economy Platforms which both have a successful business track-record during the past ten years. The case companies are ride-sharing platform Lyft and errand-service TaskRabbit. As a result of studying their evolution, common patterns in successful strategic decisions during the evolution of a Sharing Economy Platform are identified. The study builds on findings of an earlier research on evolution of Airbnb, an apartment-sharing platform, with an aim to validate and extend the existing research framework of Sharing Economy Platform evolution. After a review of earlier scientific literature from the fields of Sharing Economy, Platform Economics, Information Infrastructure theory and Platform Strategy, a new research framework with a holistic view on Sharing Platform growth from initiation until long-term business sustainability is proposed. In conjunction with building the framework, a grounded case study analysis of the two case companies is conducted using over a thousand public technology blog entries as secondary- and tertiary research data. From studying the blogs, a timeline of strategic actions made by both case platforms is created and the effect of these actions to company growth is analysed, in terms of amounts of users and robust financial metrics. Findings of the thesis indicate strong support for the proposed framework. Three steps of Sharing Economy Platform evolution are identified: successful Sharing Platforms first create a two-sided network of users, then augment the platform with value-added services, and finally sustain the platform business by integrating with platform complements and successfully competing with rivals. Findings from both case studies support this view but provide different narratives when it comes to the exact timing or content of some key strategic actions. The findings contribute to existing research by providing an extended framework for Sharing Platform evolution, and empirical evidence to support its claims.