Platforms in the sharing economy: Does business strategy determine platform structure?

Abstract

Sharing economy businesses are increasingly important, but the relationships between their strategies and their platforms' structure has received insufficient attention. To address this gap, we develop testable hypotheses building on following expectations. 1) Sharing economy businesses are attacking mature markets; 2) most sharing economy businesses follow one of Porter's two basic strategies, seeking a price advantage or a differentiation advantage; and 3) platforms that support differentiation-based strategies must provide more information to their users than platforms that support cost-based strategies. We located a database of 100 investment-grade sharing economy businesses to test our hypotheses. Our hypotheses received strong support from this database.