Transaction costs and the sharing economy

Purpose – The paper aims to discuss the so-called sharing economy from a business modeling and industrial structure perspective. The illustrative cases examined are Airbnb and Uber. The research question raised is concerned with the extent to which transaction cost theory can be used to explain the changing industrial structures in the application areas that the Internet-based platforms are addressing and how other theoretical frameworks can be helpful in understanding these developments. Design/methodology/approach – As the sharing economy topic is relatively new, the paper takes its point of departure in a brief overview of the different issues discussed in the academic literature and the press regarding this emerging phenomenon. The paper presents relevant theoretical approaches to analyzing business models of sharing platforms and industrial structure implications. It, thereafter, presents the cases of Airbnb and Uber to discuss the relevance of the theories put forward. Findings – The paper concludes...