The sharing economy as a complex dynamic system: Exploring coexisting constituencies, interests and practices

Journal Pre-proof The Sharing Economy as a complex dynamic system: Exploring coexisting constituencies, interests and practices

Călin Gurău, Ashok Ranchhod PII:

S0959-6526(19)33669-8

DOI:

https://doi.org/10.1016/j.jclepro.2019.118799

Reference:

JCLP 118799

To appear in:

Journal of Cleaner Production

Received Date:

01 December 2017

Accepted Date:

08 October 2019

Please cite this article as: Călin Gurău, Ashok Ranchhod, The Sharing Economy as a complex dynamic system: Exploring coexisting constituencies, interests and practices, Journal of Cleaner Production (2019), https://doi.org/10.1016/j.jclepro.2019.118799

This is a PDF file of an article that has undergone enhancements after acceptance, such as the addition of a cover page and metadata, and formatting for readability, but it is not yet the definitive version of record. This version will undergo additional copyediting, typesetting and review before it is published in its final form, but we are providing this version to give early visibility of the article. Please note that, during the production process, errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. © 2019 Published by Elsevier.

Journal Pre-proof The Sharing Economy as a complex dynamic system: Exploring coexisting constituencies, interests and practices

Dr. Călin Gurău (Corresponding author) Montpellier Business School Montpellier Research in Management 2300 Avenue des Moulins 34185 Montpellier, France Phone: +33 (0)4 67102846 Email: [email protected]

Dr. Ashok Ranchhod Winchester School of Art The University of Southampton Park Avenue, Winchester Hampshire SO23 8DL, UK Phone: +44 (0)23 80 592 490 Email: [email protected]

Călin Gurău is member of the Entrepreneurship and Innovation Chair, which is part of LabEx Entrepreneurship (University of Montpellier, France) and funded by the French government (Labex Entreprendre, ANR-10-Labex-11-01).

Journal Pre-proof The Sharing Economy as a complex dynamic system: Exploring coexisting constituencies, interests and practices

1. Introduction The Sharing Economy (SE) is a highly dynamic, complex, disruptive and controversial phenomenon, which has grown exponentially after the launch of the Internet. Created in 1995, eBay and Craigslist had an instant success (Schor, 2014), followed by a series of intermediation platforms (e.g., Airbnb, Uber, etc.) that achieved global expansion and recognition (Smith, 2016). At global level, the SE is expected to reach 335 billion U.S. dollars by 2025 (Statista, 2018). SE’s complexity stems from the coexistence and interdependence of a large number and variety of stakeholders (Newlands et al., 2018), who move “between various circuits as they become in turn consumer, supplier, commentator and so on” (Gregory and Halff, 2017, p. 9). The SE is highly disruptive for traditional economic institutions and business models (Gonzalez-Padron, 2017; Suzor and Wikström, 2016) favoring access over ownership (Frenken and Schor, 2017) and facilitating the exploitation of under-utilized assets (Petrini et al., 2017). In addition, the normative connotations of ‘sharing’ raise many controversies regarding SE’s contribution to ecologic, social and economic sustainability (Acquier et al., 2017). Although some studies (Lawson et al., 2016; Piscicelli et al., 2015, 2018) present the SE as a more sustainable form of consumption (Botsman and Rogers, 2010; Martin, 2016; Pouri and Hilty, 2018), an opportunity for collaboration, solidarity and social bonding (Bauwens and Kostakis, 2014; Belk, 2010; Benkler, 2017), and a pathway to decentralized, equitable transactions (Cherry and Pidgeon, 2018), other publications indicate that environmental sustainability is often secondary to convenience or financial motivations (Böcker and Meelen, 2017; Wilhelms et al., 2017), while sharing platforms may reproduce or exacerbate social and economic inequalities (Murillo et al., 2017; Richardson, 2015; Schor and Attwood-Charles, 2017). The SE is considered an umbrella concept comprising a multitude of stakeholders, markets and activities (Acquier et al., 2017), this heterogeneity impending the development of a holistic perspective (Schor, 2014). In addition, as the SE is centered on continuously expanding peerto-peer markets, the roles and interests of participating actors are rapidly changing and 1

Journal Pre-proof evolving, creating not only social conflicts between different stakeholders (Gonzalez-Padron, 2017), but also paradoxical combinations of benefits and challenges (i.e., a person can benefit from the Sharing Economy as a Blablacar driver, but can also experience, as a neighbor, the discomfort provided by a next door apartment rented through Airbnb to noisy customers): “The introduction of new business models and economic approaches such as the sharing economy activities […], have already created new, and often conflicting narratives amongst numerous stakeholders with respect to the benefits and drawbacks of sharing activity, appropriate regulatory approaches and varying rates of resistance and adoption from industry incumbents and peer groups […]. These narratives represent different interpretations about what the sharing economy is, what it can and can’t do.” (Cohen and Munoz, 2016, p. 96). Although SE’s protean meaning is permanently co-created, negotiated, modified and framed by the opinions and actions of different actors (Martin, 2016), “there is a need for an organizing framework that allows mapping out and making sense of the different perspectives on the sharing economy” (Acquier et al., 2017, p. 1). Extant studies trace the development of the SE literature (Cheng, 2016; Ertz and Leblanc-Proulx, 2018; Plewnia and Guenther, 2018; Sutherland and Jarrahi, 2018), identify stakeholders’ actions and motivations (Cherry and Pidgeon, 2018; Cockayne, 2016; Geissinger et al., 2019; Lu and Kandampully, 2016; Milanova and Maas, 2017), and develop typologies/frameworks of various SE activities or markets (Acquier et al., 2017; Cohen and Munoz, 2016; Mair and Reischauer, 2017; Ranjbari et al., 2018), but research remains fragmentary, using either secondary or primary data sources. A more complete perspective can be developed considering the sharing economy as a complex dynamic system. Such a system emerges organically as a result of interdependent, unpredictable and often conflicting behaviors of its components, rather than following a predetermined plan (Weisner, 2017). Adopting a complex system perspective, in this study we aim to present the SE’s dynamic emergence and functioning by investigating the “ensemble of ideas, concepts and categories through which meaning is given to social and physical phenomena” (Hajer and Versteeg, 2005, p. 175), analyzing and interpreting the dynamic and often conflictual interaction between various SE’s constituencies. In comparison with other studies based on literature reviews (Cheng, 2016; Ertz and Leblanc-Proulx, 2018; Lu and Kandampully, 2016; Plewnia and Guenther, 2018) or primary data analyses (Cherry and Pidgeon, 2018; Cockayne, 2016; Milanova and Maas, 2017), we organically combine the two approaches, performing content analysis of a wide range of secondary and primary data (i.e., academic publications, 2

Journal Pre-proof blog contributions, videos, media articles, consulting and market reports, and 256 interviews with representatives of four stakeholder groups), in order to explore three structural and functional aspects of the SE: (i) defining characteristics, (ii) stakeholders profile, actions and interests, and (iii) systemic benefits and challenges. Our choice is justified by the controversial nature of these areas, whose meaning is not defined exclusively by experts, consultants or researchers, but rather by an evolving confrontation of different stakeholders’ opinions, interests and practices - which are represented and analyzed in this study. Considering that “the mere existence of sharing economy activities has opened up the field allowing for interpretative flexibility” (Boyd and Cohen, 2016, p. 96), an interpretative approach is particularly adapted to unveil the dynamic complexity of the SE by taking into account the role, position and context of various stakeholders. The paper is structured as follows. After a presenting in section two the methodology applied to collect and analyze secondary and primary data, section three discusses SE definitions, as well as their usage and interpretation(s). Section four presents the roles and opinions of various SE stakeholders, and section five identifies and evidences the main benefits and challenges provided by the SE. Following the discussion of the SE as a systemic phenomenon, developed in section six, section seven concludes the paper with a summary of the main findings, methodological limitations, and opportunities for future research. 2. Methodology The choice of interpretative content analysis stems from the necessity to apply a methodology adapted to dynamic and complex social phenomena, whose meaning is permanently co-created, negotiated and modified by various categories of stakeholders, acting in specific socioeconomic contexts to achieve heterogeneous and interdependent objectives (Gregory and Halff, 2017; Frey et al., 2018; Martin et al., 2017). Content analysis allows the categorization of secondary and primary data to achieve classification, summarization and tabulation, leading to narrative and explanatory patterns, which are then interpreted considering the characteristics of various data sources (Silverman, 2006). Mapping and interpreting these patterns result in the “particular framing of a system and its dynamics, and suggest particular ways in which these should develop or transform to bring about a particular set of outcomes” (Hermwille, 2016, p. 240).

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Journal Pre-proof 2.1. Data collection To explore and clarify the main SE structural and functional elements, we applied a multi-stage process of data collection, coding and analysis. First, we accessed a large range of secondary sources: 67 videos, 48 blog contributions, 74 newspaper articles, 31 consulting/market reports, 56 academic papers and seven books. These sources were selected using online searches on Google, academic databases, and YouTube, on the topic of the ‘Sharing Economy’, progressively including in the corpus of texts/videos the most relevant results (as provided by the search engine, starting with the most recent ones, and then continuing towards the past), until theoretical saturation was reached. This extensive literature review resulted in a large corpus of texts/videos which, after analysis, provided a comprehensive view of the SE, indicating extant knowledge gaps and controversies regarding SE’s defining characteristics, main categories of stakeholders, and general benefits and challenges. Second, primary data was collected through a series of semi-structured interviews with 256 respondents representing four categories of SE stakeholders. The selection of these respondents was made combining convenience and purposeful sampling (Corley and Gioia, 2004). First, we identified family members, colleagues and friends who actively participated in the SE as sellers, service providers, clients or traditional competitors. In addition, we encouraged these primary respondents to search within their social networks other people willing to take part in the study. This snowball approach allowed us to interview respondents located in three European countries: France, Italy and the United Kingdom (see Table 1 for the socio-demographic profile of these respondents), who played the role(s) of service providers (121), customers (181), competitors (16) and local community representatives/general public (24). Since many respondents could be simultaneously classified into different stakeholder categories, we clarified in each case the respondent’s main perspective(s) (for example, some respondents provided answers as both service provider and customer). The interviews (conducted by phone, skype, or face-to-face) took between 20 and 35 minutes, focusing on the main elements and knowledge gaps identified through secondary data analysis: the SE’s perceived characteristics; respondents’ involvement, roles and attitudes; personallyexperienced SE’s benefits and challenges; relationships with other stakeholders; and, finally, personal motivations and resources mobilized to access, and participate in, sharing activities.

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Journal Pre-proof Table 1. The socio-demographic profile of respondents Country/ Socio-demographic profile Gender Male Female Age category 18-25 26-35 36-50 51-65 > 65 Role Provider Customer Competitor General public

France (n = 89)

Italy (n = 74)

United Kingdom (n = 93)

47 42

52.8% 47.2%

41 33

55.4% 44.6%

44 49

47.3% 52.7%

26 27 21 11 4

29.2% 30.3% 23.6% 12.4% 4.5%

17 28 18 8 3

23% 37.8% 24.3% 10.8% 4.1%

31 30 22 8 2

33.3% 32.2% 23.7% 8.6% 2.2%

36 59 7 11

40.5% 66.3% 7.9% 12.4%

34 48 4 6

46% 64.9% 5.4% 8.1%

51 74 5 7

54.8% 79.6% 5.4% 7.5%

Although all data sources were considered equally valuable for developing a triangulated perspective, we acknowledged differences in their level of objectivity, initiating data coding and analysis with the most objective sources (i.e., academic papers, market/consulting reports, books) followed by the ones with a higher dose of subjectivity (newspaper articles, videos, blog contributions and primary data). For the same reason, all findings are reported indicating their source category. 2.2. Coding Answers were recorded with respondents’ permission, and then transcribed and coded using Nvivo 11. Data coding and analysis included three main phases (Holton, 2010): a. Substantive open coding of secondary data We first coded secondary data, to identify the main themes related to the SE’s structure and functioning. Secondary data was progressively collected from six different sources: academic articles, market/consulting reports, books, newspaper articles, videos, and blogs. We started by reading, interpreting and coding line-by-line ten entries from each category, excepting books, in which the initial open coding was realized on only two entries, because of the length and complexity of the presented themes. The videos were coded by marking the video sequences 5

Journal Pre-proof relevant for various SE-related themes, the basis of coding representing mostly verballypresented information rather than images, although there was a clear inter-dependence between these two data categories. The incidents identified by reading, interpreting and coding these sources have been freely categorized into 67 initial themes. Other secondary data entries - identified through Google searches, in academic databases, or on YouTube, were progressively introduced and codified until each code category reached saturation. The initial coding list evolved significantly following the interpretation and interdependence of various themes: after coding the second wave of entries, the number of code categories increased to 74, being then progressively reduced to 41, when the saturation level was reached. The coding categories provided a clear framework regarding the main SE-related topics discussed in the literature, as well as their presentation and interpretation. We used this framework to identify the main knowledge gaps and controversies, and consequently, to address them in the semi-structured interviews realized with 256 respondents. b. Substantive open coding of primary data We coded primary data repeating the procedure applied for secondary data, i.e., by reading, interpreting and coding line-by-line the transcribed interviews. Although we applied an open coding procedure, many coding categories were highly similar with the ones resulted from secondary data coding. This similarity has two main explanations: first, the general themes included in the interview guide directed the discussion toward topics previously identified during secondary data coding - in other words, we can consider primary data coding as a type of selective coding; and second, these topics naturally emerged because of their importance for respondents’ personal situation and involvement in the SE. The number of codes evolved during the coding procedure, leading to 38 core categories. c. Theoretical coding To stabilize the core coding categories that emerged during the open coding of secondary and primary data, we realized a multi-level comparison between the number, type and content of the two code sets. First, we compared the content (i.e., incidents) of similar coding categories to validate their convergence in terms of meaning; second, we compared the number of codes resulting from secondary and primary data coding, mapping their correspondence, similarities 6

Journal Pre-proof and differences; third, we compared the relationships between primary and secondary level coding, modifying and validating the general coding structure. The final coding framework included 33 code categories, divided into six primary-level codes and 27 secondary-level codes (as presented in the Appendix). In addition, primary data was categorized in relation to respondents’ nationality. 2.3. Data analysis The large corpus of secondary and primary data compiled and coded was analyzed using a qualitative, interpretative approach (Khan, 2014), considering the source and context of each data incident. For example, as we progressed with data analyses, we realized that respondents’ nationality has no discriminating effect; probably because most interviewees were middle-class professionals rooted into a modern, cosmopolitan culture. For this reason, results are reported at the level of the entire pool of respondents. After achieving a clear categorization of different themes and sub-themes related to the SE’s structure and functioning, we analyzed the data included in various coding categories. We applied content analysis techniques (Geissinger et al., 2019; Plewnia and Guenther, 2018; Silverman, 2006), identifying the convergent and divergent meanings of various elements presented in the literature and in respondents’ testimonies, and using them as basis for discussion and interpretation. We critically assessed primary data applying the principles of reflexive pragmatism (Alvesson, 2011), to grasp the contextual meanings of answers, assess the trustworthiness of respondents, and identify transferable or generalizable insights. The elements/discussion presented in the following sections are based on a threefold comparison between (1) different streams of secondary data; (2) different streams of primary data; and (3) main streams of secondary and primary data, triangulated in an overview of the main identified themes. 3. Defining characteristics The SE is known by many names, which often creates confusion, as each concept describes only a part of its complex, multidimensional nature (Botsman, 2013). The two most popular labels used in the literature are ‘Sharing Economy’ and ‘Collaborative Economy’. The SE has been defined as: “An emerging, highly flexible economic network [that] allows people to share 7

Journal Pre-proof resources – such as equipment, services, and skills – with one another, often at significantly lower cost than traditional retail or employment arrangements.” (Martucci, 2014), or as “a socio-economic ecosystem built around the sharing of human, physical and intellectual resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organisations” (Matofska, 2016). The definition of the Collaborative Economy is highly similar: “an economic model where ownership and access are shared between corporations, startups and people” (Owyang et al., 2013). Another frequently used concept is ‘Collaborative Consumption’, defined by Belk (2014, p. 1597) as “people coordinating the acquisition and distribution of a resource for a fee or other compensation” - which integrates the situations of bartering, trading and swapping, but excludes sharing, which, as the author outlines, involves no compensation (Belk, 2010, 2014). Deploring the lack of clear concepts, Botsman (2013) proposed the following definitions: •

Collaborative Economy: “An economy built on distributed networks of connected individuals and communities versus centralized institutions, transforming how we can produce, consume, finance, and learn”;

•

Collaborative Consumption - a Collaborative Economy component, represents “an economic model based on sharing, swapping, trading, or renting products and services, enabling access over ownership”, which integrates three different systems: redistribution markets, collaborative lifestyles, and product service systems;

•

Sharing Economy is “an economic model based on sharing underutilized assets from spaces to skills to stuff for monetary or non-monetary benefits”; and,

•

Peer Economy comprises “person-to-person marketplaces that facilitate the sharing and direct trade of assets built on peer trust”.

A striking characteristic of these definitions is their generality - they encompass a large range of activities, and their scope can be easily expanded to traditional economic areas. Although it is not an exclusively digital phenomenon (Frenken and Schor, 2017), SE’s rapid growth was triggered and facilitated by information technology, the specific characteristics of online intermediation platforms and mobile applications shaping its development and evolution (Belk, 2014; Botsman, 2013; Langley and Leyshon, 2017). From this perspective, the present-day SE represents a complex socio-technical system (Petrini et al., 2017), in which social and technological elements influence and disrupt each other in a continuous process of creative

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Journal Pre-proof destruction, development and hybridization, challenging and changing extant behaviors, rules and institutions. Some authors contend that the SE is novel and revolutionary, representing an alternative to classical markets and economic institutions (Botsman, 2013; Sundarajan, 2016). However, despite some specific characteristics, modern peer-to-peer markets present nothing fundamentally new in comparison with previous market phenomena (Codagnone and Martens, 2016; Voytenko Palgan et al., 2017). First, peer-to-peer markets existed, in one form or another, from the dawn of human civilization, being centered on barter transactions (Codagnone and Martens, 2016). Second, shared access to collective or individual ownership is also an ancient and diversified phenomenon, being common in groups of hunters/gatherers, among family members, or between neighbors (Belk, 2010). Third, various forms of intermediation have been used for a long time to connect individual buyers and sellers (Voytenko Palgan et al., 2017), and reduce transaction costs – e.g., for renting or selling of individual property. Finally, digital applications implemented by peer-to-peer intermediaries are not novel, representing either specialized online platforms, or highly-similar alternatives of online applications used in business-to-customer markets - e.g., Airbnb’s website has roughly the structure and functionalities of a classical hotel booking site (such as booking.com), with some minor adaptations to peer-to-peer market characteristics: “There are very few differences in the layout of the Airbnb and Booking.com interface, and now Booking.com is also posting individual renting offers” (Male, 38 years old, UK). Schor (2014) suggests that the main differentiating characteristic of modern peer-to-peer markets is ‘sharing with strangers’, which entails a higher level of risk than sharing with family, friends or neighbors. From this perspective, SE is defined as: “consumers granting each other temporary access to under-utilized physical assets (“idle capacity”), possibly for money” (Frenken and Schor, 2017, pp. 4-5). According to this definition, on-demand taxi services - such as Uber, are provided and consumed by creating new capacity and not sharing an existing one, being included in the On-demand Economy, while peer-to-peer goods markets - which grant permanent access to assets through ownership transfer, represents a Second-hand Economy. Unfortunately, this effort to clarify SE’s specific scope and domain is invalidated by the general perception and use of the concept. Our analysis indicates that the main defining SE characteristics presented in the literature and nominated by our respondents are (see Table 2): 9

Journal Pre-proof peer-to-peer exchanges/transactions; free or paid access to under-utilized assets; the central role of online or mobile intermediation platforms/applications; and the importance of a direct rating system which evaluates providers, customers, products and services, enhancing trust and developing positive or negative reputations. Both secondary and primary data overwhelmingly point out that many academic authors, journalists, consultants, regulatory institutions and respondents, do not differentiate between different types of peer-to-per activities, using SE as an umbrella concept (Acquier et al., 2017). To interpret the data presented in Table 2, it is necessary to consider the type and positioning of the source in terms of interest and audience design; for example it is interesting to note that the sources with a better knowledge regarding the SE - either because of their extensive analysis or their active participation in this phenomenon - books and service providers - provide a more complete presentation of SE’s various characteristics, with percentages that are far superior to the other – secondary or primary – data sources. Academic articles (100%), market reports (100%) and books (100%), as well as service providers (100%) and customers (99.4%), strongly outline the peer-to-peer dimension of SE markets; but this characteristic is less emphasized in newspaper articles (55.4%) or blogs (56.3%). The same tendency appears for online intermediation, as reports (93.5%), books (100%), service providers (100%) and customers (100%) predominantly focus on this dimension, while the percentages of newspaper articles (37.8%) and blogs (64.6%) are much lower. There is also a clear discrepancy regarding selling activities - probably because it contradicts the logic of sharing: secondary sources seem to present much less this activity (with an average of 40.6% discussing this topic) than primary sources (with an average of 78.1% pointing out this SE feature). The high percentage of providers (90.9%) that discuss selling is in line with extant studies indicating financial gain as a primary motivation to participate in SE activities (Böcker and Meelen, 2017; Wilhelms et al., 2017).

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Table 2. The defining characteristics of the Sharing Economy identified in secondary and primary data Under-used assets Secondary sources Academic articles 38 Reports 18 Books 7 Newspaper articles 29 Videos 43 Blogs 19 Primary sources Providers 119 Customers 165 Competitors 10 General public 14

67.9% 58.1% 100% 25.7% 64.2% 39.6% 98.3% 91.2% 62.5% 58.3%

Renting

Selling

43 76.8% 24 77.4% 7 100% 37 50% 28 41.8% 17 35.4%

11 19.6% 15 48.4% 4 57.1% 34 45.9% 22 32.8% 19 39.6%

117 163 11 15

96.7% 90.1% 68.8% 62.5%

110 122 12 19

90.9% 67.4% 75% 79.2%

Peer-to-peer

Online intermediation

56 31 7 41 49 27

100% 100% 100% 55.4% 73.1% 56.3%

37 29 7 28 50 31

66.1% 93.5% 100% 37.8% 74.6% 64.6%

121 180 12 18

100% 99.4% 75% 75%

121 181 11 16

100% 100% 68.8% 66.7%

11

Rating 24 17 6 21 27 19

42.9% 54.8% 85.7% 28.4% 40.3% 39.6%

121 100% 176 97.2% 12 75% 13 54.2%

Journal Pre-proof It is beyond the purpose of this study to decide for or against a specific definition and use of the SE concept. However, considering the ineffectiveness of academic attempts to discriminate between various business models, we raise the question if this endeavor is really necessary, as many people include peer-to-peer activities under the same umbrella concept: “For me, Uber and Airbnb are part of the Sharing Economy, as both are peer-to-peer markets based on intermediation platforms. They are clearly not similar in the way they operate, but I think they have many common elements” (Male, 32 years old, UK); “When I use Uber or Airbnb, I never consider if they are part of the same business model; this is not relevant for me, all I care about is to find the service I need, as conveniently and as cheaply as possible” (Female, 26 years old, Italy). For these reasons, we also adopt an ‘umbrella’ perspective, considering as an SE manifestation any peer-to-peer transaction/market involving under-utilized assets, which includes online platforms such as Airbnb, Blablacar, eBay, TaskRabbit, Uber or Lyft. 4. Stakeholders Stakeholders are defined as “any group or individual who can affect or is affected by the achievement of the organization's objectives” (Freeman, 1984, p. 46). As a result of secondary and primary data analyses, we identified not only the main categories of SE stakeholders, but also the relationships between different categories. These relationships are displayed in Table 3, using a dyadic basis of representation. Analyzing and understanding the relationships between various stakeholders (see Table 3) can provide relevant answers and solutions to three fundamental questions (Parmar et al., 2010): (1) how value is created and traded; (2) what ethical stance should be adopted by organizations; and (3) how to develop and implement managerial attitudes and practices for sustainable organizational performance. Adopting a complex ecosystem perspective, our analysis is considering six main stakeholder categories involved in the functioning and evolution of the SE: providers, customers, intermediaries, traditional competitors, local administration and governments, general public. 4.1. Providers Sellers or service providers identify and exploit under-utilized assets, resources or capabilities, using opportunities that emerge in SE markets (Cherry and Pidgeon, 2018). The distinct feature of the SE is the primary importance of peer-to-peer transactions, in terms of number, variety, and value (Schor, 2014; Frenken and Schor, 2017). 12

Journal Pre-proof

Although SE is mainly based on peer-to-peer transactions, some interesting models of peer-tobusiness transactions are rapidly developing: “Last year, I rented my countryside villa on Airbnb and I had a great experience, because the site is so user friendly and there is such a strong sense of community. Interestingly, some of my best clients are small local organizations, which rented the property to host foreign delegates wanting to experience, during a short stay, the French environment and lifestyle” (Female, 45 years old, France). On the other hand, a potpourri of new technological applications and platforms are designed to spread SE practices in business-to-business markets (Cripe, 2016). Among the pioneers of the B2B SE are WeWork offering office and community services for $250 a month; Floow2, a Netherlands-based company planning to share supply chain activities to increase efficiency and sustainability, or even Airbnb and Uber, that launched business versions of their platforms (Slagen, 2014). 4.2. Customers Customers are essential for SE’s existence and development, as without demand and consumption the entire system would collapse. Given the large range of needs catered for by SE markets, virtually anybody can be a customer. Unfortunately, the customer can be not only

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Table 3. Mapping the relationships between various categories of stakeholders (source: secondary and primary data analysis) Providers Customers

Intermediaries

Providers Direct competition

Customers Dialectical tensions and collaborations in value co-creation Direct competition

Intermediaries Reciprocal dependence

Competitors Indirect competition

Reciprocal dependence

Shifting consumption practices/ Preferences Direct competition

Direct competition if active in the same sector/market

Competitors

Direct competition

Governments

General public

Governments General public Require privileges Potential disruptions and protection and conflicts of interests Require Potential disruptions protection and conflicts of interests Require privileges Attempting to develop and support a positive public reputation Require a level playing field in market competition/ regulation Different perspectives regarding administration and regulation

Attempt to preserve a positive relation demonstrating their economic value Should guarantee good living environment and lack of discrimination Different perspectives and opinions, depending on personal profile and history

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Journal Pre-proof a ‘king’ but also a victim, as media reports many instances of racial discrimination, raising important questions regarding the positive claims of social equality and bonding expressed by many SE proponents (Levin, 2016, 2017). Customer behavior is shaping the general perception about the SE; for example, some Airbnb hosts had their property badly damaged (Burke, 2018) and there have been repeated complaints against noisy Airbnb clients from neighboring owners/tenants. To avoid escalating problems, Airbnb took progressive steps to prevent abusive behaviors, introducing insurance systems and complaining procedures (Nicks, 2016). The fact that some providers can also be SE customers, increases awareness and empathy regarding potential problems, subsequently reducing their occurrence. It is interesting to note that the leading intermediation platforms are continuously attempting to enlarge their customer base, either by introducing new services, or expanding in new market segments: Uber launched UberEATS for food delivery and is developing the concept of virtual restaurants (Locker, 2017), while Airbnb is targeting the business market (Zaleski, 2017) and disabled travelers (Coldwell, 2017). These strategies increase market coverage and power, legitimizing their lobbying and public relations activities on behalf of customers and providers. 4.3. Intermediaries The basic semantic meaning of ‘intermediary’ or ‘middleman’ is “a person who acts as a link between people to bring about an agreement; a mediator” (Oxford Dictionary, 2017). Economic theory views intermediaries as ‘auctioneers’ who connect supply and demand, establishing the level of transaction prices in markets of pure and perfect competition (Bessy and Chauvin, 2013). Given that real markets are characterized by multiple disequilibria and imperfections (Stigler, 1962), intermediaries reduce information acquisition costs, and, from an institutionalist perspective, the transaction costs of negotiating and enforcing contracts (Williamson, 1985). Intermediaries have a central role in the SE’s development and functioning (Weber, 2014). Their rapid success is based on effective market analyses, prompting the design and implementation of growth strategies. The leading online intermediation platforms (e.g., Airbnb and Uber) have quickly increased their pool of service providers and customers by aggressively expanding globally (Parente, 2018) and densifying their presence in attractive locations (Marchi 15

Journal Pre-proof and Parekh, 2015). Their platforms reduce transaction costs related with information searching, peer-to-peer matching, payment security and risk management, offering a friendly interface and highly-reactive support services (Schor, 2014). To prevent service providers’ defection, they create a powerful sense of community, convenience, and positive brand reputation. Finally, by intelligently manipulating SE’s positive connotations (Geissinger et al., 2019), they aggressively lobby the local and national authorities, presenting themselves as champions of market change, and often obtaining important tax reductions for their service providers (Hern, 2016; Kollewe and Davies, 2016): “I was extremely surprised that I paid no taxes for the revenues obtained through Airbnb. In France, this is almost a miracle, given the taxation regime and I was glad to keep all the money I earned” (Female, 45 years old, France). The results of secondary and primary data analyses indicate several possibilities to replace or threaten the position of incumbent peer-to-peer intermediaries by modifying online business models (Frenken and Schor, 2017; Scholz, 2014): introducing new applications for and peerto-peer reputation and transaction management; creating associations of service providers that manage local transactions more efficiently; or reducing online intermediation fees: “I hope that in the future I will find a way to run independently my renting activity. I am looking for online or mobile applications that would allow me to manage my online reputation, and to simultaneously post my renting offer on several platforms” (Male, 33 years old, UK). Intermediation works best in fragmented markets with large numbers of unique and irregular transactions. Standardized transactions favor the development of large corporations that can reduce price and transaction costs through economies of scale. On the other hand, if transactions are regularly repeated between the same buyer and seller, the parties can develop trust, forge direct relations, and eventually reduce transactions costs by eliminating intermediaries. This is exemplified in the case of Homejoy, a peer-to-peer intermediary for home cleaning services launched in in 2010 (Huet, 2015; Lehdonvirta, 2016), most service providers and customers were using the online platform only a few times, subsequently developing direct relations. In July 2015, Homejoy stopped its activity, because: “usage had grown slower than expected, revenues remained poor, technical glitches hurt operations, and the company was being hit with lawsuits on contractor misclassification” (Lehdonvirta, 2016). 4.4. Competitors

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Journal Pre-proof The concept of competition has several possible meanings in the SE (Demary, 2015): (i) the relationship between providers of similar services - for example, home owners located in the same area who post their offer on Airbnb; (ii) the conflict between online intermediation platforms acting in the same sector; or (iii) the disruption of traditional businesses by SE’s development. In this study, we focus on the third meaning of competition. The analysis of secondary sources indicates a bi-polar perspective regarding competition between traditional businesses and new intermediation platforms. Some hail the capacity of SE players to revolutionize and reform traditional sectors, such as hotel or taxi services (Hathaway, 2016), while others consider that extant businesses should be better protected by state regulations (Hira and Reilly, 2017). The interviewed competitors are characterized by a growing sense of injustice: “I had this small hotel from my father, we are in the same business for three generations, and we are proud of it. We always made sure to invest and update the infrastructure, to provide high customer value. But how can you compete with Airbnb offers who are asking for half the price of a hotel room? At this price, a hotel cannot even cover the running costs. It is particularly bad if you are in the middle, as business travelers still prefer quality hotels, but more and more individual travelers want to pay less, even if the quality is not so good. Everybody is losing in the long run, as quality and price go down” (Male, 48 years old, Italy). Adopting a positive perspective, some authors and consultants suggest that traditional businesses can increase their competitiveness by adopting SE business models (Cusumano, 2015; Morrow, 2016): develop an online platform, redefine their company as a service provider, and/or develop a marketplace (Owyang et al., 2013). Several companies already followed this trend; for example, BMW and Toyota introduced car rental services in their San Francisco dealerships (Owyang et al., 2013). 4.5. Governments The SE represents a difficile conundrum for national and local governments (One Earth, 2015) because of different interest groups. On the one side, there are SE service providers and sellers who obtain extra income. Not all of them get rich, since their competitive advantage is determined by the quality and rarity of controlled resources (i.e., the resource-based view), and by the way in which they mitigate among various market forces (i.e., the market theory of the 17

Journal Pre-proof firm) (Frenken and Schor, 2017). For example, in the home/room renting market, location represents a clear differentiator, which allows some renters to charge higher prices and have more demand than average: “I do not get much for renting my flat, because it is far away from the city center. However, a friend of mine gains twice as much for renting only a studio located in a central location, right near the city hall” (Female, 52 years old, France). On the other side there are citizens or organizations who see their life and work threatened and disrupted by the quick development of the SE. Some of these stakeholders militate for a complete ban of sharing activities, but the majority require, more realistically, clear regulations to prevent and limit abuse, and provide a level plain field between extant businesses and SE entrepreneurs. The response of local and national governments varies depending on the politicians’ interpretation of SE’s benefits and challenges in relation to their reputation and electoral capital. The governing bodies of New York and San Francisco have introduced stricter regulations and penalties against Airbnb (Goodheart, 2019), while municipality of Paris tries to stop Airbnb’s promotion of properties that are not properly registered for online renting (The Local, 2019). Other local governments consider the existence of online intermediaries as a lesser evil, being afraid that a decentralized peer-to-peer market can be difficult to control and police (Hodgson, 2019): “You can imagine a world where Airbnb does not exist formally. This becomes an unregulated black market, which […] is much more dangerous” (Lindeman, 2014). In June 2016, EU officials suggested that “absolute bans and quantitative restrictions should only be used as a measure of last resort” because “Europe’s next unicorn [a startup company valued at more than $1bn] could stem from the collaborative economy.” (Kollewe and Davies, 2016). Therefore, “a proactive approach by policy makers to engage with collaborative economy stakeholders, examine the current regulatory framework and put in place clear and transparent rules that mitigate the disruption caused by collaborative business models without jeopardising innovation and their economic growth potential is far better than a reactive approach based on the enforcement of regulation designed for traditional providers to online platforms.” (VVA, 2018). We posit that many local and national governments walk the tight rope between regulation and deregulation, strictness and permissiveness, being afraid of the unforeseeable consequences of new legislation. A clear problem is the difference in regulation and taxation regimes between traditional businesses and SE providers - for example, the Airbnb-intermediated rentals are 18

Journal Pre-proof treated differently than a classical Bed and Breakfast establishment in terms of safety standards or revenue taxation: “Until 2014 I had a legitimate business, offering Bed and Breakfast services; but then Airbnb offers mushroomed and I could not understand why I need to pay revenue taxes and they don’t. Because of this, I closed my business and now I am renting through Airbnb; after all, if the government does not care, why should I care about paying taxes?” (Female, 48 years old, France). However, one of the main functions of local and national governments is to provide a level playing field for various economic and entrepreneurial activities (Baker, 2014), providing specific advantages only for clearly-defined and well-justified situations. 4.6. General public Stakeholders adopt a wide range of positions and opinions regarding SE’s legitimacy and evolution, depending on the mix of benefits and challenges they experience. This is well illustrated by the respondents included in the general public category - people who are not directly involved as providers, customers or competitors, but who are nonetheless affected by SE’s activities. Some of them have been positively influenced by friends: “I think that the Sharing Economy is a positive trend; many of my friends are able to supplement their earnings by renting their home or flat during summer time.” (Female, 42 years old, France), by media: “The local paper publishes many examples of positive outcomes related to the Sharing Economy, so, I guess it is a good thing” (Male, 63 years old, UK), or by their value system: “Sharing is always good, it brings us closer to our fellow citizens” (Female, 29 years old, Italy). On the contrary, other respondents indicated negative experiences: “In the building I live, there are at least six or seven flats that are regularly rented through Airbnb, and it is not pleasant for neighbors: parties, garbage, guests leaving the entrance door open, it is really difficult to cope with all these problems. I am thinking to search for another flat if the situation does not change soon” (Female, 32 years old, France). This apparent dichotomy is a valid reflection of the SE’s multifaceted manifestations, which, on the one hand, are dynamic and opportunity-rich, but, on the other hand, my also result in disruption, discrimination and inequality (Frenken and Schor, 2017).

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Table 4. The main benefits and challenges of the Sharing Economy presented in secondary and primary data Benefits Secondary sources Academic articles Reports Books Newspaper articles Videos Blogs Primary sources Providers Customers Competitors General public Challenges Secondary sources Academic articles Reports Books Newspaper articles Videos Blogs Primary sources Providers Customers Competitors General public

Revenues/ investments 31 26 7 43 55 31

55.4% 83.9% 100% 58.1% 82.1% 64.6%

121 100% 113 62.4% 4 25% 5 20.8% Discrimination/ opportunism

Consumption efficiency 19 14 7 17 23 21

Sharing

33.9% 45.2% 100% 23% 34.3% 43.8%

39 17 7 29 51 24

69.6% 54.8% 100% 39.2% 76.1% 50%

120 99.2% 134 74% 3 18.8% 8 33.3% Less sharing

76 81 2 21

62.8% 44.8% 12.3% 87.5% Increased ownership

Reforming regulations

Better offers/deals

22 13 7 29 15 26

39.3% 41.9% 100% 39.2% 22.4% 54.2%

16 11 7 35 34 22

117 122 0 7

96.7% 67.4%

120 162 2 9

29.2% Increased consumption

28.6% 35.5% 100% 47.3% 50.7% 45.8%

99.2% 89.5% 12.3% 37.5% Blurring life boundaries

New business models 20 24 7 17 16 22

119 98.3% 88 48.6% 3 18.8% 8 33.3% Systemic distortions

21 10 6 30 11 29

37.5% 5 32.3% 2 86.7% 4 40.5% 8 16.4% 19 60.4% 9

8.9% 6.5% 57.1% 10.8% 28.4% 18.8%

6 3 3 3 15 6

10.7% 9.7% 42.9% 4.1% 22.4% 12.5%

13 1 2 6 7 7

23.2% 3.2% 28.6% 8.1% 10.4% 14.6%

9 7 6 14 8 12

19.6% 22.6% 85.7% 18.9% 11.9% 25%

22 12 7 23 17 21

32 116 14 11

26.4% 64.1% 87.5% 45.8%

19.8% 18.2% 93.8% 58.3%

36 47 13 9

29.8% 26% 81.3% 37.5%

26 34 8 4

21.5% 18.8% 50% 16.7%

113 75 14 16

93.4% 41.4% 87.5% 66.7%

104 132 16 21

24 33 15 14

20

35.7% 77.4% 100% 23% 23.9% 45.8%

39.3% 38.7% 100% 31.1% 25.4% 43.8% 86% 72.9% 100% 87.5%

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5. SE’s benefits and challenges Our study would be incomplete without a clear presentation of SE’s main benefits and challenges, that were identified and evidenced by triangulating the results of secondary and primary data analyses (see Table 4). The balance between benefits and challenges is clearly determined by the specific type, interests and positioning of various sources. All analyzed books mainly focus on SE advantages; the same positive perception is identified among service providers - on average, 92.7% of these respondents outlined SE benefits. The image presented by academic and newspaper articles, videos and blogs is much more diverse, depending on authors’ personal orientation. Among the primary data sources, competitors are the least inclined to outline SE advantages and the most active to indicate its challenges, 93.8% of them indicating the danger of ‘less sharing’ and all of them outlining the price, value and wage distortions introduced in the economy. The general public also seems rather reluctant to recognize the added value(s) provided by the SE, with an average of 52.1% of respondents indicating SE challenges, in comparison with an average of 40.3% pointing out the benefits. It is interesting to note that many service providers, although directly involved and interested in the SE, reveal an increasing confusion between their personal and professional life (93.4%), and outline price, value and wage distortions introduced in the economy (86%). We interpret this as a sign that local and national governments should better regulate, control and institutionalize SE activities, to eliminate potential sources of overwork, exploitation or major economic unbalances. 5.1. Benefits 5.1.1. Alternative revenue and investment sources The SE represents an alternative source of revenue and/or investment for both individuals and organizations (Basselier et al., 2018). Economic benefits represent an important motivation to participate in the SE (Frenken and Schor, 2017; Kim, 2019): “The main reason I am renting my flat on Airbnb is to make money for me and my family” (Male, 47 years old, Italy); “The revenue obtained from renting my villa on Airbnb platform allowed me to survive for six months, until my financial situation became more stable” (Female, 45 years old, France). By 21

Journal Pre-proof providing a source of revenue or investments, SE can act as a stabilizing force which reduces market imperfections and improves the life quality of individual and organizational participants (Cherry and Pidgeon, 2018). 5.1.2. Increased consumption efficiency Mobilizing under-utilized assets, resources and capabilities, SE increases consumption efficiency - defined as the choice and consumption of a product/service that has a lower price and/or a higher quality than other available products/services (Lee et al., 2005), potentially reducing the material consumption based on exclusive ownership, saving rare or depleted resources, and reducing pollution (Basselier et al., 2018; Martin, 2016; Pouri and Hilty, 2018). SE’s sustainability represents an important motivation of peer-to-peer markets’ participants (Böcker and Meelen, 2017; Frenken and Schor, 2017; Kim, 2019). On the other hand, this trend towards increased asset usage can be interpreted as an economic obsession with ever-increasing efficiency (Haque, 2016), under-utilized personal assets representing a potential field of ideological and commercial action: “Do we really need to have more rooms, more stuff, more money? I feel that the Sharing Economy is only a new extension of the capitalist society, a clever gimmick to make us work and consumer more.” (Female, 41 years old, France). 5.1.3. Creating and facilitating genuine sharing and collaboration SE’s supporters emphasize that peer-to-peer activities can significantly increase the human solidarity, heralding the dawn of a new era based on mutual collaboration and positive personal relations (Forrest, 2017). Some testimonies echo this aspiration for closer human relations and experiences: “It is always a great experience to meet the person who rented the room, as they bring with them a whole universe of culture and personal history. With many of my former guests I am still in touch and we regularly exchange emails” (Male, 26 years old, UK). 5.1.4. Reforming existing markets and professional regulations The regulation of peer-to-peer markets often represents a challenge for local and national governments, requiring a careful balance between the supporting SE’s activities and implementing quality, safety, labor, and tax regulations (Davidson and Infranca, 2017). In many cases, the extant standards and rules cannot be simply copied and enforced in peer-to-peer 22

Journal Pre-proof markets, compelling authorities and experts to reassess the importance and utility of extant market and professional regulations and, in some cases, to introduce drastic reforms (Baker, 2014). Although many professional and academic sources - excepting books - consider that reforming extant regulations can represent both a benefit and a challenge, the majority of service providers (96.7%) and customers (67.4%) regard this as a clear benefit, which can reduce excessive bureaucracy and eliminate unnecessary or outdated standards (see Table 4). For this reason, we decided to present this topic under the ‘benefits’ category. 5.1.5. Increased offer, competition and a better deal for the customer The SE’s exponential development intensifies competition - between peers, organizations, but also across different categories of sellers and service providers, offering a better deal for customers; for example, the study of Zervas et al. (2017) indicates that the complementary market developed by Airbnb prevents hotels to increase room prices during peak periods. 5.1.6. Changing classical business model and market practices SE’s business models disrupt established institutions and market structures. The generalized competition between various SE actors, forces traditional organizations to re-think and eventually transform their strategic focus, by innovating products, services, communication, customer relations, and labor practices. Although some companies fail to adapt and change, the ones that succeed to transform their structure and functioning are better prepared to address future markets and economic structures (Owyang and Samuel, 2015; Owyang et al., 2013). In our study, most service providers (98.3%) were favorable to the introduction of new business models which market practices, but less so in the case of customers (49.6%), general public (33.3%), and competitors (18.8%): “The Sharing Economy provides a more open and fluid access to services, creating alternatives and solutions when the market is blocked by unnecessary regulations or monopolies” (Female, 44 years old, UK). 5.2. Challenges 5.2.1. Discrimination and opportunism

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Journal Pre-proof The fact that peer-to-peer markets are still largely unregulated can lead to abuse, opportunism and discrimination (Edelman et al., 2017; Kibbe, 2019). For example, service providers may refuse some customers on fictive or weak grounds, or even unilaterally terminate the contract, having identified a more advantageous alternative: “I had to work at Princeton University for one month and I considered renting a house or a flat through Airbnb. After searching and comparing available offers, I selected a house with a higher rental price than some local hotels, but the perspective of living in a residential neighborhood, near the University, was very appealing. I followed the classical procedure of contacting the host and offering to pay the price. The host refused my offer, arguing that she wants to rent the house for more than a month. I felt this was unfair since the property was advertised for a minimal rental period of one week I was asking for four weeks - and, as far as I could say, I was respecting the rules and meeting all the required standards.” (Male, 45 years old, France). Discrimination became so prevalent that Airbnb was forced to act. After several complaints posted on social media by Airbnb users, in April 2017, Airbnb gave permission to The California Department of Fair Employment and Housing to conduct fair housing testing of certain hosts (Levin, 2017). As a result, a host who cancelled a client’s reservation using a racist remark has been ordered to pay $5000 in damages and take a course in Asian-American studies (Solon, 2017). Lately, Airbnb further strengthened its nondiscrimination policy, requiring every user to sign a community commitment pact explicitly forbidding discrimination (Kibbe, 2019). Unfortunately, the general practice of many well-known intermediaries - such as Airbnb, Uber and Instacart, is to resist industry regulations (Szu, 2019), arguing that their platform profile exempts them from local laws and requirements that apply to similar businesses (Levin, 2017; Solon, 2017). A large proportion of respondents indicated that, at least once, they felt discriminated against or treated unfairly by other SE participants: respectively 66.2% of French; 69.8% of Italians; and 59% of UK respondents, which indicates a high prevalence of this phenomenon and a need for further research and regulation: “After more than two years of regularly using Airbnb, I still feel unsecure when I rent a flat, as there are too many unpredictable elements and the behavior of some hosts is erratic” (Female, 32 years old, Italy). 5.2.2. Destruction of true sharing practices

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Journal Pre-proof Associating a monetary value to under-utilized assets, resources and capabilities (Schor, 2014; Frenken and Schor, 2017), the SE may create a profit-oriented mentality in situations of genuine sharing - such as borrowing a tool or helping one’s neighbor. This can eventually lead not to a more human and collaborative society, but rather to a transaction-oriented one, in which most individuals and organizations attempt to maximize the financial return of their assets, resources and capabilities, through various peer-to-peer commercial activities (Liddell, 2014): “I always borrowed or lent some objects from or to my neighbors; when you need something that you do not have, you just go and ask them, and they do the same. Some neighbors can even help you with difficult jobs, sharing their time and effort… But how can you evaluate or quantify this in money? These are just good human relations, it is normal to help a person in need if you can.” (Male, 48 years old, Italy). 5.2.3. An increase, rather than a decrease in ownership Any asset accessed by one or more users/customers/organizations still needs to have an owner. By associating a financial gain with the exploitation of owned assets, the SE may increase the tendency towards ownership, especially of highly-exploitable assets. An economic analysis and modelling of peer-to-peer car sharing indicates that “depending on the rental price [i.e., the price paid by clients to car owners], collaborative consumption can result in either lower or higher ownership. In particular, when the rental price is sufficiently high […], collaborative consumption leads to higher ownership (more cars)” (Benjaafar et al., 2015, p. 90). 5.2.4. Exacerbating consumption with negative effects for natural resources and environmental protection Peer-to-peer markets increase consumption efficiency by providing shared access to underutilized personal assets and resources, which, in exchange, represent a revenue source for sellers or service providers. This may lead to increased general consumption - for example, Airbnb rentals encourage people to travel more and in more distant locations, while the payments received by hosts permit the acquisition and/or consumption of more goods and services (Frenken and Schor, 2017). Finally, although many SE supporters argue that collaborative consumption will have a positive effect on natural resources and environmental protection, there is still no thorough analysis of this impact (Cohen, 2015). Some respondents shared the same opinion: “Since I use Airbnb, I travel more often, because it is so much cheaper. I enjoy 25

Journal Pre-proof discovering new countries and cultures, but sometimes I wonder if this is better or worse for the planet” (Female, 39 years old, U.K.); “I often buy and sell products on eBay, but I suspect that from an environmental point of view, it has quite a negative effect. Every sale also implies a delivery, so more sales mean more deliveries, and potentially more pollution from transportation” (Male, 51 years old, Italy). 5.2.5. Blurring the boundaries between private and professional life The fragmentation of professional tasks facilitated by the development of on-demand markets, increases work irregularity and employment precarity (Ciulli and Kolk, 2019), blurring the barriers between private and professional life (National Academies of Sciences, Engineering, and Medicine., 2017). The higher work flexibility promised by SE proponents may not have only positive effects, as in many cases the ideal is not to maximize working hours and professional involvement, but rather to achieve a proper balance between work and leisure, between family and work time (Frenken and Schor, 2017): “I rent my flat on Airbnb during summer time, but to clean it and put everything in order is hard work. Because of this, for me, the beginning of September is a particularly difficult time, both at home and at my job” (Female, 34 years old, France). 5.2.6. Price, value and wage distortions introduced in the economy The exploitation of personal assets represents a new input into the economic system, that can eventually introduce price and wage distortions in various markets and/or economic sectors (Fowler, 2017; Olalla and Crespo, 2019): “Last month the owner of the flat I rented for two years decided to terminate the contract, so I had to move. He figured that it is more profitable to rent it through Airbnb, for short periods during spring and summer, and longer periods during autumn and winter, when tourism is low” (Male, 26 years old, France). The real estate market can be heavily influenced by the possibility to rent unoccupied rooms, flats or houses, creating an additional pressure on the cities already experiencing housing problems - as it is the case of San Francisco or New York (Goodheart, 2019). On the other hand, pricing work in some peerto-peer markets below the minimum hourly rate negotiated between unions and employers, can reduce wages, decreasing the purchasing power of some professional categories (Cohen, 2015; Levine, 2016; Olalla and Crespo, 2019).

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Journal Pre-proof 6. Discussion The identification and analysis of SE’s definitional characteristics confirm the existence of an umbrella concept that includes a wide range of markets and activities, which, however, share several common traits: peer-to-peer exchanges/transactions, free or paid access to underutilized assets, the central role of online or mobile intermediation platforms/applications, and the importance of a direct rating system. These traits are descriptive and functional, indicating - implicitly or explicitly - the systemic nature of the SE, the main categories of stakeholders, and the most representative activities/markets. Very few definitions present the objective(s) of the SE activities, mainly focusing on economic benefits (e.g., Martucci, 2014). These findings invalidate the claim that the SE represents a phenomenon strongly oriented towards achieving and increasing environmental, economic and social sustainability. Indeed, as some studies (Benkler, 2017; Cherry and Pidgeon, 2018; Lawson et al., 2016; Martin, 2016; Piscicelli et al., 2015, 2018) have shown, peer-to-peer transactions can induce social bonding, monetary savings, and an increased environmental consciousness, but SE’s activities may have hidden/indirect effects that cancel or even worsen these trends. In some situations, the SE’s model can represent an effective answer to the lack, or reduction of, public services, stimulating grassroots initiatives to solve problems and challenges experienced by local communities. On the other hand, government officials and public administration are remarkably slow in considering what SE features can eventually improve the provision of public administration services (Hutchinson and Saberty, 2016). The latest public service revolution - the implementation of e-government platforms, certainly improves access to services and interaction with citizens, but it is still rooted in a centralized perspective. The popularity of SE’s markets and applications demonstrates that the time is ripe for a new change of paradigm in public services (Cohen and Munoz, 2016; Rinne, 2014; Saran, 2014) based on a dynamic access to, and reconfiguration of, geographically-dispersed, and often under-used, resources, through online platforms and public participation. The complex inter-dependencies between different stakeholders are outlined both in the general presentation of each category, and in the information displayed in Table 3. It is difficult to define the profile and position of SE actors without clearly specifying the web of (often) conflicting forces and interests in which they are embedded. No stakeholder category has a 27

Journal Pre-proof fixed perspective regarding SE’s existence and evolution, as interests and objectives are shifting depending on context. This complexity may account for, and cause, multiple SE meanings and interpretations, resembling a dynamic kaleidoscope rather than a fixed picture. The perception of various SE-related benefits and challenges is highly dependent on the ideological position of various authors/respondents. Overall, until 2016, most publications praised and magnified the positive aspects of the SE; however, recently, this trend has been reversed, leading to a more balanced representation and discussion of different issues and perspectives. In our opinion, the sheer size, dynamism and complexity of the phenomenon makes difficult for any independent analyst to understand and synthesize all the elements, forces and relationships that compose the SE. Its structure and functioning are permanently evolving, not so much in contradiction with the traditional economy, but rather in a dialectical relationship that paradoxically includes convergence, complementarity and conflict. The findings indicate that the lack of regulation specific for many SE markets may represent a double-edged sword in terms of long-term benefits and challenges. Rather than aiming for a complete deregulation of market activities, a better and closer collaboration between various stakeholders, and especially a more active role of local governments and communities (Laamanen et al., 2018; Ma et al., 2019), can significantly increase the positive effects of the

SE, while reducing its negative consequences at environmental, economic and social level: “In my opinion, the Sharing Economy mechanisms should not replace local governments but rather represent a channel for better public regulation and action. Online intermediaries will never work primarily for the public good - despite their public declarations - so it is up to the local governments and communities to draw the line and flexibly regulate peer-to-peer activities to achieve long-term sustainability targets. If it is true that online platforms care for the public good, they should not fight regulation, but collaborate more with local communities and institutions” (Male 56 years old, UK). Our findings have implications at methodological, theoretical and practical level. From a methodological perspective, our findings indicate the necessity of specific research methods to analyze the SE’s structure and functioning. In our opinion, the interpretative content analysis of various sources of secondary and primary data, mirrors and successfully addresses the multifaceted nature of this socio-technical system, whose emergent meaning is recurrently cocreated, negotiated and shaped by the conflict between multiple social voices and practices. 28

Journal Pre-proof From an academic perspective, our study clarifies the main building blocks of the SE, presenting their complexity, characteristics and interdependency. Finally, the practical implications of our findings are linked to the importance of roles, interests and contexts for properly understanding and defining the position of various actors in the SE ecosystem. These insights into the shifting nature of stakeholders’ perspective provides a relevant framework for interpreting the actions and opinions of different SE actors. 7. Concluding remarks Adopting a complex system perspective, this paper presents a general overview of three central elements that determine the SE’s structure and functioning: defining characteristics, main categories of stakeholders, and perceived benefits and challenges. To achieve this objective, we applied a rigorous content analysis methodology (Geissinger et al., 2019; Plewnia and Guenther, 2018) based on an iterative process of (i) theory analysis, (ii) secondary and primary data collection and coding, followed by (iii) information processing and interpretation. Our research makes an original contribution to the SE literature, addressing the challenge of presenting and analyzing a complex and dynamic socio-technical system. In comparison with other extant studies (Belk, 2014; Botsman and Rogers, 2010; Frenken and Schor, 2017; Gonzalez-Padron, 2017), we avoid to formulate prescriptive definitions or normative standards, presenting the multi-faceted coexistence and interaction between the opinions, interests and practices of various SE constituencies. To prevent the framing of our findings in line with particular ideologies, (i) we used a large variety of secondary and primary data sources, (ii) we attempted to provide an equal voice to various SE constituencies, and (iii) we applied a kaleidoscopic narrative style which organically combines academic results, reporters’ and bloggers’ opinions, and raw statements provided by individual respondents. Our findings indicate that SE presents the characteristics of a complex dynamic system – defined by Weisner (2017) as “something that consists of many elements that are interacting in a disordered way out of which is generated a robust order”, whose meanings and manifestations are permanently emerging and evolving through the confrontation of different social, economic and political perspectives. This systemic perspective provides useful insights regarding the limits of controlling and regulating the SE. The highly contingent nature of SE forces and activities implies that uniform 29

Journal Pre-proof regulation may not represent best practice. Instead, considering the dynamic and complex manifestation of SE activities grounded in local conditions, governments should adopt a holistic approach that takes into account the position and interest of various stakeholders, the relation between potential value creation or destruction, and the specificity of the local socio-economic context. This contextualized approach represents, in fact, the secret of Airbnb’s success in very diverse countries (Mylo Trade, 2019), that should be matched by a case-by-case regulation approach. On the other hand, the rapid evolution of the SE does not create favorable conditions for implementing and enforcing a long-term legislation, which must be replaced by recurrent and flexible regulations that tackle the emerging distortions introduced by SE activities into the local socio-economic system. This holistic approach does not invalidate the value of in-depth studies focused on specific SE topics, but suggests that it is difficult to draw rigid or final conclusions regarding the nature, dynamics and evolution of the SE, because of its characteristics and functioning as a complex dynamic system (Ladyman and Wiesner, 2013) determined by: multiple constituencies and interactions; non-linear and unpredictable evolutions; emergent characteristics and behaviors caused by the complex interdependence of various stakeholders, whose role and interest may change depending on context. These findings are relevant for academics - providing a general overview of the main defining, structural and functional characteristics of the SE; for policy makers - clarifying the role and interests of various categories of stakeholders, as well as the socio-economic benefits and challenges that result from their interaction; and for various SE stakeholders - outlining their relative and shifting perspective determined by specific roles, interests and contexts. The paper has several limitations primarily determined by the applied methodology and the staggering complexity of the investigated topic. Instead of providing final answers and fixed interpretations, we outline the shifting perspective determined by the rich web of converging/competing interests and contexts in which various SE participants are embedded. In these conditions, it is difficult to generalize our findings, which provide a holistic snapshot of a specific phase in the SE’s evolution, rather than an exhaustive list of structural and/or functional principles. Future research should adopt either a systemic approach, investigating the structure and functioning of a specific SE market, or an analytical perspective which explores and measures the causal/correlational relations between various elements of this heterogeneous phenomenon. Finally, the SE also needs a more rigorous theoretical modelling 30

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Appendix. The final coding framework Primary-level codes Benefits

Secondary-level codes Revenues/investment Consumption efficiency Sharing Reforming regulations Better offers/deals New business models

Challenges Discrimination/opportunism 39

Journal Pre-proof Less sharing Increased ownership Increased consumption Blurring the limits professional/private life Systemic distortions Definition Under-used assets Renting1 Selling Peer-to-peer Online intermediation Rating Motivation Economic Environmental Social Premises Stakeholders Providers Customers Intermediaries Competitors Governments General public 1

Definition: allowing someone to temporarily use an owned or possessed asset (e.g., car, apartment, tools) in exchange of a payment. 1

40