Research Proposal

Preliminary Online Research

In order to get deeper into analysing the shareconomy, primary research and observations have been done to get a general understanding about the industry and the trend. The main findings of this preliminary investigation about the trend are present in the section below.

SEARCH STRATEGIES

To begin the research we started with using different search strategies in order to get the general overview of the topic. The initial search key words used at the beginning included shareconomy trend, collaborative consumption, sharing economy, peer-to-peer business. These key words were mixed and matched with each other to find more resources. The picture presented below is an Infographic, which clearly identifies the main findings of our research and clearly explains in short what the Collaborative Economy is all about (Owyang, 2014).

collabo

The search engines advanced search (such as Google) and web search in general gave a lot of relevant information and sources for the research topic. After researching and reading articles and reports it became clear that the main issues around the topic are that it shareconomy “disrupts” the traditional economy.

As Tomio Geron in his article about the rise of shareconomy suggests – shareconomy is potentially very disruptive concept, “where asset owners use digital clearinghouses to capitalize the unused capacity of things they already have, and consumers rent from their peers rather than rent or buy from a company” (Geron, 2013).

In addition to that, some literature argues on what actually drives consumers to switch from traditional to sharing economy – “consumer motives”. This topic can be illustrated with a quote from one of the articles on Trendwatching.com about shareconomy: “There are four primary drivers behind the remarkable blossoming of the sharing economy. They include our urge to connect as human beings, the financial value sharing provides, the ability to answer travelers’ increased concern with sustainability and being less wasteful, and to deliver on the search for unique experiences” (Taylor, 2015).

These two key words – disrupting economy and consumer motives seemed to be really common when researching the web and this derived the research towards taking the focus precisely on these two topics.

Considering the search in library catalogues and databases based on the same key words it appeared that there are not a lot of scholar articles or academic research done about shareconomy trend. This is partly because this trend is recent, only a few years old, and thus there are not a lot of academic sources that relate to it. However, there are still academic sources that are relevant to the research focus and therefore they are analyzed more in detail in the literature review part of this report.

CONSUMER TREND CANVAS
In order to make a more comprehensive understanding of the main findings of the online research the main findings are presented in the consumer trend canvas below. This table indicates how and why the shareconomy trend developed.

trend c

RESEARCH FOCUS

After making the initial research and generally structuring the findings, it became clear that Shareconomy has been developing in many different spheres of economy. In order to make the research more focused this report will focus on the two chosen industries: accommodation and transportation. The analysis of these two businesses will be illustrated by four different companies, that are currently the most active ones around the world:

Transportation – Uber (b to c) and Bla Bla Car (c to c)

Accommodation – Airbnb (c to c) and Couch Surfing (c to c).

*c = consumer; b = business

GOOGLE TRENDS ANALYSIS

Another tool that was used to do the preliminary online research of the shareconomy trend is the Google Trends. The core findings of this are presented and analyzed below.

While exploring Google trends we discover an interesting trend of specific terms being prevalent in certain regions. Before we continue with the results and analysis of the graphs some limitations need to be taken into consideration. Google trends deals in whole numbers from 1 to 100. It does not show the volume of searches for a specific search term, but rather shows what percent of total searches is dedicated to a specific search term. The maximum percent of searches that is visualized is 10% represented by the value 100 on the graph. The minimum is 0.1% represented by the value 1 on the graph.

Google Trends – Web Search interest – Worldwide, 2004

 Notebook:       Google Trends Created: 03/03/2016 12:35 Tags:      BlaBlaCar, Europe

URL:              https://www.google.com/trends/exploregraph 1

The first search term we will be discussing is “BlaBlaCar”. This is a ridesharing service originating in Germany but popular throughout Europe. The basic idea is that people travelling to the same destination from a location along the route of a driver can share different parts of the journey in order to save money and fuel. The predecessor of BlaBlaCar was called mitfahrgelegenheit and was widely used up until 2014. As we can see, the new service has become quite popular since its creation and has managed to create quite a stir in online communities, which are their key demographic. This is on par with the current trend of shareconomy businesses creating collaborative consumption practices. It is also worth mentioning that engaged communities are only from Europe and predominantly Western Europe. The highest interest of around 10% of total searches is accumulated in Germany.

Google Trends – Web Search interest – Worldwide, 2004

No t e b o ok:       Google Trends Created:                               03/03/2016 12:34 Tags:                   Airbnb, global

URL:              https://www.google.com/trends/explore

graph 1

The next search term we will analyse is “Airbnb”. Airbnb is a global business based on collaborative consumption. People who are not using their homes in certain periods can post them on Airbnb and utilise their vacant home for a profit while allowing for a cheaper and more pleasant experience for guests. It also is on par with the current trend of shareconomy businesses and has been globally successful in engaging with their key demographic of internet users. Recently Airbnb has accounted for around 8-10% of global searches (excluding Africa and some countries in South Asia), which shows the scope of this idea.

Google Trends – Web Search interest – Worldwide, 2004 

Notebook:       Google Trends Created03/03/2016 12:32 Tags:      global, UBER

URL:              https://www.google.com/trends/explore

graph 1.png

Another prime example of a largely successful shareconomy based business is Uber. The company offers a ridesharing service on a more local level within cities. The company has expanded to offer different levels of its service including a private driver service called Uber Black, which is not an example of shareconomy. Looking at Google trends we can see that Uber has been steadily increased in popularity globally and while they have some issues with local legislature, they are a highly sought after service. At a point in late 2015 Uber has reached almost 10% of global searches (excluding Africa).

Google Trends – Web Search interest – Worldwide, 2004

No t e b o ok:       Google Trends Created:  03/03/2016 12:30 Tag s:      Ridesharing, US

URL:              https://www.google.com/trends/explore

graph 1

Ridesharing is a term widely used in the US, thus the only considerable amount of searches are in the US alone. Ridesharing as we already discussed is the concept of sharing a ride you would normally make with other people in order to save money, spend less fuel and utilise a car optimally. We can see that while the idea is well today, back in its inception it was not doing so good. There was hype and people were excited but as far as implementation, it barely took off. Only with the creation of Uber, Lyft and other ridesharing services did the concept really take off and as we can see has been rising in popularity ever since.

Google Trends – Web Search interest – Worldwide, 2004

No t e b o ok:       Google Trends Created:  03/03/2016 12:30

T ags:                    Collaborative consumption, US

URL:              https://www.google.com/trends/explore

graph 1.png

Collaborative Consumption is another term coined in the US. It seems to be related to many businesses whose main goal is to maximise the utilisation of existing commodities while allowing for a community to form around it, thus minimising the cost of individual consumers and optimising the usage of certain products and services. The term seems to have started in the late 2010 and has stayed relevant throughout the years showing relative stability. The slight declaim might be due to less talk of general collaborative consumption and more about specific forms due to the emergence of many such services in the last 5 years.

Google Trends – Web Search interest – Worldwide, 2004

No t e b o ok:       Google Trends        Created:            03/03/2016 12:29         Tags: Germany, Shareconomy

URL:              https://www.google.com/trends/explore

Graph n 1.png

Shareconomy is a term, which from our research had it start in Europe. Germany seems to be the main country to adopt the term, with all significant searches of the term originating in Germany. It appears to have started in 2013 and while it had much interest in the beginning, the overall searches are around 4% of total searches in Germany and less than 1% globally. This might be due to the late publication of the term. As we said for “collaborative consumption”, the decline is most likely due to the lack of general searches for the overall type of business due to the abundance of new business within that specific area.

OBSERVATION OF ONLINE COMMUNITIES

As this research focuses mainly on the online research techniques it is highly based on the analysis of online communities that relate to collective consumption trend and the activities that are taking place in them. The main communities that were chosen for further development of this investigation are – Reddit: online community, which is used as a case study for Netnography and Instagram: online platform that is used for data scraping and visualisation part of this research. However, the two communities that were used for preliminary online research were Techcrunch and Facebook. Their analysis is presented below.

Keywords based on which, the communities have been observed: peer to peer sharing/access to goods and services, enabling the optimization of resources, shared access to products and services.

Communities: Facebook and Techcrunch.com

Techcrunch.com (D&P)- covert non-participatory observation

Techcrunch is a network based in China, Europe and Japan. They cover a variety of subjects, reviewing and discussing on news, events and television. “TechCrunch is a leading technology media property, dedicated to obsessively profiling start-ups, reviewing new Internet products, and breaking tech news.”

The website provides an abundance of articles on topics such as shareconomy/ collaborative consumption. From Uber to Bla Bla car and Airbnb, the platforms that enable the sharing of goods and services are broadly discussed, having the members engage in comments after each of the article. The network has a database to which other platforms and websites are added with a view of having them rated. There was nothing found on freelancing.com and couch surfing. But beside from the platforms that we expected to find, we came across others, such as Venmo, an app that enables customers to share and make payments with friends, for a variety of services.

Examples of article: “Uber begins to see the payout from accepting cash payments”, “Airbnb handed over 1.3 million dollars in tourist taxes to the city of Paris in Q4 2015”, “BlaBlaCar raises a massive $100 million dollars round to create a global long distance ride sharing network”, “Ebay VB Steve YAnkovich: En route to $4B in gross mobile sales (TCTV)”.

Facebook- covert non-participatory observation

Facebook is a highly popular free social network, which allows registered users to create profiles, upload photos and video, send messages and keep in touch with friends, family and colleagues. Another feature of this platform is that it works as a marketplace, it allows for companies or organizations to create their pages and thus attract potential customers. Concerning the fact that there are certain communities within Facebook, where people can express their opinions and discuss about specific topics, organizations or business. In general, these Facebook groups/pages allow members who have common interests to find each other and interact.

When considering the different business of shared economy trend and its communities on Facebook it becomes easier to analyze what actual customers think about the business. For example, Uber community on Facebook has variety of different reviews. While some of the customers enjoy the service: “Love the product. Love the service. We need more Uber in Amsterdam!” and “Amazing experience every single time! Wherever you find Uber, you can rest assured it will be a top-notch ride”. On the other hand, there are also community members who actually feel disappointed: “I was overcharged by €41.11 on my first Uber ride. Customer service can’t/won’t tell me how nor why this occurred. Poor service”.

Another community to consider on Facebook platform is Airbnb, which currently has more than 2.6 million members. In their page on Facebook members also post their advertisements about the apartments they rent, but also the pages has a variety of comments about the service itself. It seems that complaints about the business are more evident than the good words, for example: “So disappointed in Airbnb. Valentine’s Day night was ruined as the house we rented was moldy and disgusting so we drove 90 minutes home after dinner.” There are also positive reviews, but the negativity indicates that this shared economy business also has its flaws.

When looking at freelancer.com community on Facebook, it seems as the most active one. It mostly operates in a way that the business posts interesting and useful posts for their customers and certain discussions happen in the comments section. This community seems to be growing fast as well, and it already has 2.13 million members.

This preliminary research allowed narrowing down the topic of the research and come up with the research questions from which the investigation developed further on.

Methodology

The purpose of the present research paper is to look into the global trend of shareconomy or collaborative consumption. For this, the research question has narrowed down the topic to the disruption shareconomy brings to existing businesses and industries. The literature review is to dive into what is known and previously written on with regard to this topic. However, since the research is aiming to add new findings to this subject, a few research methods will be used, in order to collect first hand primary data and draw new conclusions and recommendations.

In big lines, the course of the research includes assessment of secondary information, summed up in the literature review, preliminary observation of online communities, trend analysis, participatory overt netnography and social network analysis, with data visualisation in Gephi.

Preliminary/background observation

Firstly, after an online overview of the current trends and the choice of the particular trend to be discussed (shareconomy/collaborative consumption), a choice is made with regard to the categories of market fields that will be researched and the businesses that are part of them: transport (Uber and BlaBlaCar) and accommodation (Couch Surfing and Airbnb). In addition, the trend is looked at through the eyes of online communities and their activity around them. This first step is to be wrapped up into a preliminary observation of the intensity and currency of the subject being approached. Therefore, a number of keywords will limit the observation into traceable parameters: peer to peer sharing/access to goods and services, enabling the optimization of resources, shared access to products and services.

Research planning

Secondly, after the preliminary observation will have been done, the spectrum of the research will be narrowed down, which will lead to the formulation of research and sub-research question: Main research question: How does the shareconomy businesses disrupt existing economies/industries? Sub-question 1: What are the motives that drive customers to use shareconomy businesses? Sub-question 2: What are the opportunities and threats (consequences) of shareconomy?
Nevertheless, new and focused key words will be chosen for the further research of the trend: shareconomy, collaborative consumption, disruption, customers, share, peer-to-peer. These key-words are to be consistently used and taken into consideration throughout the whole research.

Data Collection:

  1. Secondary data: Literature Review & Google Trends Analysis

The collection of secondary information, which will been divided by the focuses of the two sub-questions, will be analysed within the literature review. The literature review is to reveal what it is known about the subject. Therefore, after clarifying on the motives of why customers chose for shareconomy, the advantages and threats that collaborative consumption poses over traditional industries will also be discussed. Considering the learnings from the literature review, the remaining methods will be used to confirm or contradict the findings, based on the online activity of relevant communities. In addition, the trend will be analysed through Google Trends, for the purpose of discovering the attention that it receives worldwide.

  1. Netnography

Further, Netnography will be conducted in the basis of ethical research, therefore as an overt and participatory observation. For this matter, Reddit is chosen as a relevant online community, based on its rich content and activity as well as the heterogeneity of the members, who are interactively participating in discussions. The researchers will make an open entrance in the community, therefore introduce themselves, and present the purpose of them being there and the aim of the research. Shareconomy/collaborative consumption will be analysed through the lenses of the sub-reddits activity, with a focus on the already agreed-upon key words. The findings are relevant for subtracting qualitative data from those in close contacts or with an opinion on the chosen trend- Reddit members.

  1. Social network analysis and Gephi data visualisation

In addition, a social media network will be observed. This operation will terminate in scraping relevant data and analysing it by the means of Gephi, a tool for data visualisation. The data will be scrapped from Instagram, based on key hashtags, by using Instagram Hashtag Explorer. This operation will give insight on the online activity around key concepts of the trend, by collecting and visualising first-hand user-generated content. The findings will help understanding the trend from the customers’ perception, which is a key element of the research. With a clear comprehension of the drivers as well as the customer profile, the recommendations can be issued to the industry, in order for it to optimize its services based on the preferences of the current market.

Literature Review (mixed articles+scholar)

Since the research question has been further sub-divided in two sub-questions for a better focus one different implicit aspects, the literature overview will be likewise divided into two. The first part will look into what are the customers’ motives and what drives the potential customers to choose for collaborative economy-based companies.

The academic paper ‘Empirical analysis of customer motives in the shareconomy: a cross-sectoral comparison’ is aiming to dive into the reasoning behind the choice of German customers. According to Black and Cracau (2015) “Consumers turn into entrepreneurs and the classical differences between production, trade, and consumption vanish” (Balck & Cracau, 2015). The conclusions in this case have been drawn based on the findings of quantitative data resulted from a survey. The participants had to mark their motivations in four industries related to shareconomy, amongst which, accommodation (Airbnb & Couchsurfing) and transport (German equivalent: DriveNow & Tamyka), which are also the focus of our literature review. It has been concluded that customers seeking lower prices has been the top reason, which has dominated the choice for all the four evaluated fields, regardless of the age, sex and income of the respondents. Environment-awareness, access as well as rarity-originality have been the following choices of the participants in the accommodation and car-sharing sector.

Likewise, another research, in this case a master thesis, conducted on the Dutch market is dividing customers’ motives into intrinsic, extrinsic and general, leading to roughly the same findings. After conducting twenty interviews and gathering qualitative data from the interviewees, van de Glind claims that “Current users predominantly have the characteristics of innovators and early adopters. They got to know about the platforms through networks and social media and started using them mainly out of practical need. In addition, a diverse set of social, environmental and financial motives for using these platforms was found. ” (Van de Glind, 2013). Besides from the commonly-shared features of the average shareconomy consumer, the participants in collaborative consumption get involved driven by practical motives, social, environmental, financial and last but not least, out of curiosity.

In addition, a research conducted by Nielsen N.V. a reputed global company in trust-worthy data, shows that “68% of Global Survey Respondents Willing to Share or Rent Personal Items; Two-Thirds Likely to Use Products and Services from Others” (Nielsen N.V., 2014). The survey has involved 30,000 participants from 60 countries across the world, all representatives for different generations, sex and age. The research has also concluded that representatives across ages are more prone to share their belongings, goods or services, in exchange to a fee. Hence, finances are again the primary motive that is driving more than 68% of the global respondents to be positive and open to collaborative consumption. As a proof of how the economic involvement of the collaborative consumption has grown from year to year, in 2014 the global revenue outcome of the shareconomy has increased by 25%, summing a total of $3,5 billion (Nielsen N.V., 2014).

The second part will look into the opportunities and threats that the collaborative-consumption companies pose on the traditional ones and how they impact them. In addition, let start with the positive first.

It has been claimed that in the century we live in, everything moved from sharing offline to sharing online. We can share our couch for free, (Couchsurfing) our journey cost from one place to another for better price than a normal taxi would offer us (Uber) and more recently, one can rent your apartment for a certain price while not being at home. (Airbnb). Many advantages and opportunities therefore arise. According to the Economist, owners are able to money from underused assets. (The rise of the sharing economy, 2013) Airbnb says hosts in San Francisco who rent out their homes do so for an average of 58 nights a year, making $9,300. Moreover, while owing a car, you are able to rent your vehicle owners using RelayRides and make more than $1,000. Additionally to that, renters are suddenly able to pay less than if they would have to buy the item themselves or if they were to ask a traditional provider. One of the other opportunities are the environmental aspects as well. As the Economic claims, by renting a car means not owning one, therefore fewer resources are needed in producing many more. However, this leads to a threat in the existing market since this fact poses a threat to the traditional companies offering their services. In addition, is that the only threat?

As The Sydney Morning Herald claims, “Instead of relying on the size and stability of a large corporate brand to project value, the sharing economy relies on peer-to-peer relationships to signal trust.” (Mookhey, 2015) This has been labelled as threat since it underlines the simple fact that Uber doesn’t own any taxi license, Airbnb is not an official hotel. They are both owners of a platform where reservations are arranged. It is very much dependent on the owner or the rider whether he will offer you his services and upon the client whether he will trust the person offering the person. Mookhey labels this as a disruptive idea. “In theory, the size of the market is equal to the number of people with spare rooms and rides.” He claims that although the cost is important, the reputation is more relevant. Each user is able to recommend or comment upon the service provided.

In Amsterdam officials are using Airbnb listings to track down unlicensed hotels. In some American cities, peer-to-peer taxi services have been banned after lobbying by traditional taxi firms. The danger is that although some rules need to be updated to protect consumers from harm, incumbents will try to destroy competition.

Preliminary Trend observation on online communities

Examples of companies applying this trend:

Uber (b to c)- transportation,
Airbnb (c to c)- accommodation,
Couch Surfing (c to c) – accommodation,
Bla Bla Car (c to c)- transportation,

Keywords based on which, the communities have been observed
: peer to peer sharing/access to goods and services, enabling the optimization of resources, shared access to products and services

Communities: Facebook (Morta), Reddit (Angel), Techcrunch.com (D&P)

Techcrunch.com (D&P)- covert non-participatory observation

Techcrunch is a network based in China, Europe and Japan. They cover a variety of subjects, reviewing and discussing on news, events and television.
“TechCrunch is a leading technology media property, dedicated to obsessively profiling start-ups, reviewing new Internet products, and breaking tech news.”

The website provides and abundance of articles on topics such as shareconomy/ collaborative consumption. From Uber to Bla Bla car and Airbnb, the platforms that enable the sharing of goods and services are broadly discussed, having the members engage in comments after each of the article. The network has a database to which other platforms and websites are added with a view of having them rated.
There was nothing found on freelancing.com and couch surfing.
But beside from the platforms that we expected to find, we came across others, such as Venmo, an app that enables customers to share and make payments with friends, for a variety of services.

Examples of article: “Uber begins to see the payout from accepting cash payments”, “Airbnb handed over 1.3 million dollars in tourist taxes to the city of Paris in Q4 2015”, “BlaBlaCar raises a massive $100 million dollars round to create a global long distance ride sharing network”, “Ebay VB Steve YAnkovich: En route to $4B in gross mobile sales (TCTV)”

http://techcrunch.com/2015/10/17/is-uber-the-root-of-all-evil/

Facebook- covert non-participatory observation

Facebook is a highly popular free social network, which allows registered users to create profiles, upload photos and video, send messages and keep in touch with friends, family and colleagues. Another feature of this platform is that it works as a marketplace, it allows for companies or organizations to create their pages and thus attract potential customers. Concerning the fact that there are certain communities within Facebook, where people can express their opinions and discuss about specific topics, organizations or business. In general, these Facebook groups/pages allow members who have common interests to find each other and interact.

When considering the different business of shared economy trend and its communities on Facebook it becomes easier to analyze what actual customers think about the business. For example, Uber community on Facebook has variety of different reviews. While some of the customers enjoy the service: “Love the product. Love the service. We need more Uber in Amsterdam!” and “Amazing experience every single time! Wherever you find Uber, you can rest assured it will be a top-notch ride”. On the other hand, there are also community members who actually feel disappointed: “I was overcharged by €41.11 on my first Uber ride. Customer service can’t/won’t tell me how nor why this occurred. Poor service”.

Another community to consider on Facebook platform is Airbnb, which currently has more than 2.6 million members. In their page on Facebook members also post their advertisements about the apartments they rent, but also the pages has a variety of comments about the service itself. It seems that complaints about the business are more evident than the good words, for example: “So disappointed in Airbnb. Valentine’s Day night was ruined as the house we rented was moldy and disgusting so we drove 90 minutes home after dinner.” There are also positive reviews, but the negativity indicates that this shared economy business also has its flaws.

When looking at freelancer.com community on Facebook, it seems as the most active one. It mostly operates in a way that the business posts interesting and useful posts for their customers and certain discussions happen in the comments section. This community seems to also be growing and it already has 2.13 million members.

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