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Sharing Economy Business Models: Informational Services Innovation and

Disruption in Uber and Airbnb

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Sharing Economy Business Models:
Informational Services Innovation
and Disruption in Uber and Airbnb

Lucia Šepeľová, Jennifer R. Calhoun, and Michaela Straffhauser-Linzatti

Abstract The driving force behind the increase of the sharing economy is the expan-
sion in technology, in particular, informational services that facilitate individuals, as
well as organizations that exchange goods and services, and directly support the
expansion of their networking. For the sharing process within the sharing economy,
ownership of information and communication technology (ICT) is essential to create
an interaction between buyers and sellers. The purpose of this chapter is to inves-
tigate the two most known sharing economy platforms, Uber, and Airbnb, with the
focus on the technological functioning of their business models. The chapter exam-
ines the business models of the Uber and Airbnb platforms based on a review of
previous studies. Based on the actual market situation in which companies currently
find them selves and the challenges they may face in the future, a SWOT analysis will
be provided. Advancement of technologies, especially the Internet, cloud computing,
smart phones, business intelligence, and geolocation have significantly influenced
the enhancement of the sharing economy and trigger a novelty of their business
models. Contributors of the sharing economy, mostly the technological revolution
have caused the disruption of traditional business models, in the way the platforms
create a demand-supply relationship with customers, derive revenues, as well as the
functionality of the platforms in providing services.

L. Šepeľová (B)
Comenius University, Odbojárov 10, 831 04 Bratislava, Slovakia
e-mail: sepelova5@uniba.sk
J. R. Calhoun
E. Craig Wall Sr. College of Business Administration, Coastal Carolina University, Conway, USA
e-mail: jcalhoun@coastal.edu
M. Straffhauser-Linzatti
University of Vienna, Oskar Morgenstern Platz 1, 1090 Vienna, Austria
e-mail: michaela.linzatti@univie.ac.at

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 521
N. Kryvinska and A. Poniszewska-Marańda (eds.), Developments in Information
& Knowledge Management for Business Applications, Studies in Systems, Decision
and Control 376, https://doi.org/10.1007/978-3-030-76632-0_18
522 L. Šepeľová et al.

1 Introduction

1.1 Relevance

A concept of sharing as itself has been well-known among mankind for centuries.
However, a significant growth of sharing economy took place between 2008 and 2010
following the global financial crisis, which encouraged the population to save their
expenses by monetizing their skills and insufficiently used resources and due to the
dramatic increase in the standard of living of civilization [1]. Other pivotal factors,
leading to the growth of the sharing economy are the digital technology revolution
and the accessibility of the goods, which are demand-driven and available for sharing.
The current change that is taking place in society because of the emerging trend of
the sharing economy is changing the behavior of individuals. Consumers, society,
and the economy are in the process of rebirth of long-forgotten trade customs [2].
An indispensable part of human lives is the practice of renting things or providing
small services for a fee or for free. In the evolving market environment, influenced
by the emergence of modern ICT, there is a shift in the values of a younger genera-
tion and their desire to discover new, unconventional opportunities. This has resulted
in the sharing economy, a phenomenon of the last decade that is supported by the
World Wide Web and affords ease of access to the Internet, as well as the develop-
ment of innovative, sophisticated encryption systems necessary to deliver services
or products. Thus, attracting new types of market players.
In the sharing economy, not only entrepreneurs, but also ordinary people, house-
holds and organizations provide goods and services. The economic model of the
sharing economy makes it possible to share resources efficiently within a commu-
nity. This approach has grown extensively throughout the world, and from ordinary
people becoming entrepreneurs. The business models of the sharing economy distin-
guish three basic components characterized as suppliers, consumers, and platforms,
which take on the role of markets [3]. The main principle is the fair sharing of existing
resources among the members of the community in a simple and efficient way, which
is beneficial for both sides: the owner leases his property, and the customer draws on
a varied offer, available quickly and conveniently.
The sharing economy is the most significant change in the corporate environment
since the evolution of the Internet. In 2011, according to an article published in TIME,
the sharing economy was indicated as “one of the 10 ideas that will change the world”
[4]. Interest in the sharing economy is undoubtedly on the rise, as evidenced by the
increasing number of users, platforms but also positive forecasts. As early as 2014,
44% of Americans were familiar with the concept of sharing economy [5], and
research estimates that participation in the sharing economy will reach more than 86
million Americans by 2021 [6].
Sharing Economy Business Models: Informational Services … 523

1.2 Goals and Objectives

Informational systems are regarded as integral to the success of sharing economy

platforms. Their impacts are observed in various business activities such as inno-
vative business models, marketing activities and strategies in building customer
relationships.
The main objective of an analysis is to investigate the role of informational services
in influencing the practices of the sharing economy by answering the following
questions:
• Which factors create the value chain of the selected sharing economy platforms?
• Which attributes the current sharing economy platforms face and which they
should focus more on to create a competitive advantage?
This chapter has the following structure. The term sharing economy will be exam-
ined first by reviewing the number of academic papers. Following the investigation
of the business models of the greatest players in the ridesharing and room-sharing
industry focus on the value chain that gives platforms a competitive advantage
through ICT. In addition, the SWOT analysis of these platforms provides an overview
of the current market position, points out the differences compared to traditional
business models and reveals room for future innovations and improvements towards
customer satisfaction.
The research method of this chapter consists in the investigation of the websites
of selected platforms and the analysis of existing academic articles and statistical
researches.

2 Theoretical and Conceptual Background

2.1 Sharing Economy and Theoretical Definitions

The existence of a great diversity between activities of the sharing economy as well
as the technological and definition ambiguities of the boundaries developed by the
participants have caused that a firm definition of the sharing economy approach
implying a common application is very vague and leads to several disputes. More-
over, until today, the sharing economy has taken many forms, and the authors have
introduced many concepts in a similar meaning related to the concept of sharing
economy. Therefore, in search of a suitable definition and for its better understanding,
it is necessary to outline and distinguish a few statements related to the concept of
sharing economy.
The approach of collaborative consumption for the first time appeared in the liter-
ature in 1978, in the book by Marcus Felson and Joe L. Spaeth entitled: “Community
Routine Activity Consumption: A Routine Activity Approach.” The activities of
collaborative consumption are characterized as: “Those events in which one or more
524 L. Šepeľová et al.

persons consume economic goods or services in the process of engaging in joint

activities with one or more others” [7]. However, Russell Belk stated this interpreta-
tion misleading and refused it. He argued that the Felson and Spaeth definition was
too general even though focusing on common consumption activities, for instance,
drinking beer or speaking on the telephone. According to Belk, the issue of allocation
and redistribution of resources was not sufficiently addressed [7]. Belk’s definition of
collaborative consumption is “people coordinating the acquisition and distribution
of a resource for a fee or other compensation” [8]. This statement includes exchange,
swap, and trading activities in which any kind of monetary or non-monetary reward
is present. However, this claim excludes company-sharing activities, such as Couch
Surfing, which rejects any form of compensation. In his view, most of the commercial
platforms that are these days considered as a part of sharing economy should not in
fact been included there [7, 8].
In the key publication in the sharing economy sphere “What’s Mine Is Yours”
by Rachel Botsman and Roo Rogers, the collaborative consumption refers to
“traditional sharing, bartering, lending, trading, renting, gifting, and swapping,
redefined through technology and peer communities” [9]. According to Botsman,
the collaborative consumption, sharing economy, collaborative economy and peer
economy have common ideas but different meanings. At present, consumers are
increasingly confronted with the idea of sharing economy that is by Botsman defined
as “an economic model based on sharing underutilized assets for monetary or
non-monetary benefits” [10].
It follows from the above definitions that the importance of the sharing
economy has been constantly evolving over time because of its long-term expan-
sion and involvement of new facilities. Currently, experts work with several terms,
which are used synonymously, some examples of interpretations, frequently used
between providers are “collaborative consumption, collaborative economy, on-
demand economy, peer-to-peer economy, zero-marginal cost economy, and crowd-
based capitalism” [11]. However, some authors argue that the concepts of the sharing
economy and the collaborative economy are interchangeable [10, 12]. De Grave
notes the sharing economy is one part of the collaborative economy, as “distributed
production, peer-to-peer finance, and the open source and knowledge movements”
[12].
Although there is no single widely accepted definition, the sharing economy
fulfills these basic characteristics [13]:
• Platforms are operating through a website or an application
• Allowing consumer to consumer transactions
• Temporary provision of access to goods or services
• Using unused assets.
Table 1 illustrates an overview of sharing economy definitions stated by various
scholars:
Sharing Economy Business Models: Informational Services … 525

Table 1 Definitions of sharing economy (based on [14–20])

Scholar (Source) Definition
Belk [14] “Sharing is an alternative to the private ownership that is
emphasized in both marketplace exchange and gift giving”
Botsman [15] “An economic system based on sharing underused assets or
services, for free or for a fee, directly from individuals”
Schor [16] “Sharing economy activities fall into four broad categories:
recirculation of goods, increased utilization of durable assets,
exchange of services, and sharing of productive assets”
Barnes and Mattson [17] The use of online market places and social networking
technologies to faciliate peer-to-peer sharing of resources (such as
space, money, goods, skills and services) between individuals,
who may be both suppliers and consumers
Hamari et al. [18] “An umbrella concept that encompasses several ICT developments
and technologies, among others collaborative consumption, which
endorses sharing the consumption of goods and services through
online platforms”
PwC [19] “The sharing economy is an economic movement where common
technology enable people to get the goods and services, they need
from each other, peer to peer, instead of buying from established
corporations”
Cambridge dictionary [20] “An economic system that is based on people sharing possessions
and services, either for free or for payment, usually using the
Internet to organize this”

3 Business Models of the Sharing Economy

The sharing economy supported by technological advancement furthered the growth

of new business models. These new platforms excluded traditional markets, decom-
pose sectoral categories, and maximize the use of scarce resources [16]. A business
model is defined as, an architecture for the product, service, and information flows,
including a description of the various business actors and their roles; a descrip-
tion of the potential benefits for the various business actors; and a description of the
sources of revenues [21]. In other words, business models describe how the company
is earning financial resources and defines the way a company generates and derives
value from services or products. Their importance lies in ensuring the identity of the
organization. The structure of business models is based on the three main choices
constituting who the actors within the model are, what products and services are
being offered, and how the competitive advantage is being built in terms of the value
chain that should not be confused with a business strategy or a marketing strategy.
For decades businesses have been running on the principle of linear logic, which
meant manufacturers distributed products that were subsequently purchased by
customers who owned and used these goods as long as they fulfilled their func-
tioning activities. The economic crisis of 2008 resulted in a paradigm shift towards
the preference of temporary ownership over actual personal ownership. Compared
526 L. Šepeľová et al.

to traditional business models, the sharing economy platforms operate based on

network-based business models. The primary importance of the platform is thus to
stimulate customer values and experience [22].
Innovation in the sharing of assets and services allows technological evolution
that enables digitally authorized trade, where many actions are available solely with
the usage of the mobile devices, through ICT platform (marketplace) between indi-
viduals acting as providers (entrepreneurs) and consumers (demanders) of goods and
services covering many sectors including transport, delivery and logistics, travel and
hospitality, home services, dining, food and beverages facilitated through an online
marketplace [3].
Sharing economy models involve three categories of relevant constituents:
• Platforms (marketplaces, intermediaries, sharing economy company). Peer
markets that facilitate, organize, and mediate connection between suppliers and
consumers to simplify their mutual transactions. Sharing economy platforms are
known as “online platforms that coordinate a group of individuals (or peers) to
enable the sharing of an asset or resource, including physical assets or skills.
They are platforms where people can share, rent, exchange, or donate goods and
services” [23]
• Suppliers (providers, micro-entrepreneurs). Individuals or small businesses,
delivering goods or services in peer-to-peer transactions that generate supply of
goods and services on the platform.
• Consumers (demander). Individuals who buy, acquires, or rents goods and
services from supplier, dealing with peer-to-peer transactions on online (ICT)
platform due to access to less expensive goods and services.
A disruption of sharing the economic models, depicted in Fig. 1, lies largely
in commercial transactions resulting from the purchase or sale of consumer goods
and services through online platforms that play the role of an intermediary channel
between the two parties and thus allow for transactions in different ways [25]. As
represented in Fig. 2, another innovative feature represents idle capital. The owners
can capitalize on their unused assets either financially or in exchange for a different
resource and trust building that enables transaction partners to limit counterparty
verification and control of responsibility [26]. Moreover, the innovative platforms
have caused a profound social impact, altering the structure of traditional business

Fig. 1 Business model of sharing economy [24]

Sharing Economy Business Models: Informational Services … 527

Fig. 2 Sharing economy framework [28]

models in terms of employee-employer relationships, for instance, by outsourcing a

larger number of the workforce [27, 84–86].
Additionally, digital platforms significantly reduce localization constraints,
making them a cost-effective and convenient alternative to traditional business
services by reducing transaction costs between sellers and buyers. In the digital
environment with the development of ICT, changes are taking place in traditional
business models and the platforms’ principles are increasingly being applied. The
sharing economy is an emerging economic and technological phenomenon that is
supported by growing consumer awareness, the spread of sharing web communities
as well as social trade [18].
From an economic point of view, a sharing economy can be regarded as a two-
sided platform. This means a platform business model is based on mediating inter-
actions between two parties – supply and demand and there are ongoing interac-
tions by consumers who have something to offer and those who are interested in
it, without the transfer of ownership [29]. Enhancing technologies, especially the
Internet, cloud-computing, smart phones, business intelligence, and accurate geolo-
cation have allowed the sharing of economic platforms to become scalable enough
to create a critical mass of users. Platforms are developing new services or appli-
cations that are associated with changes in business models, both value and supply
chains. Moreover, the multifaceted nature of the platform gives scope for various
decentralized innovations.
Many authors have focused on exploring business models of the Internet-based
platforms. The following sub-chapters describe the two most known sharing economy
platforms, Uber, and Airbnb, with the focus on the technical functioning of their
business models. By analyzing business models of these companies, it is possible
528 L. Šepeľová et al.

to obtain a deeper understanding of the way the platforms create a demand-supply

relationship with customers, derive revenues and the importance of the information
systems that affect the functionality of the platforms in providing services.

4 Uber and Ride Sharing

4.1 Business Model of Uber

Ridesharing services have recorded a significant increase over the last period, with
more than 600 global providers estimated [30]. An example of one of the most
popular ride-sharing providers is Uber, which has seen a significant increase since its
inception in 2009. Uber has become a paragon of business models for other platforms.
Uber as a ridesharing application meets the following characteristics: a location-
based driving software system, a third-party mobile commerce platform integrating
information online, and an economic model that combines sharing information online
and offline vehicle sharing [31].
Uber’s global market value is estimated at approximately $72 billion [32]. The
company’s purpose is to mediate transportation; therefore, the meaning of the word
Uber is often perceived synonymous with providers of taxi services. The interconnec-
tion is carried out through mobile applications, between customers who take advan-
tage of the Uber services, and with drivers who play the role of service providers.
Thus, requiring complex functionality of applications between passengers and drivers
[33]. A simple business model of Uber is shown in Fig. 3.
The model shows that Uber applies a different passenger search method compared
to traditional taxi providers. Instead of graphic designation such as taxi stops and

Fig. 3 Uber business model

Sharing Economy Business Models: Informational Services … 529

street stops, Uber platform drivers rely solely on the mobile applications providing
connection between drivers and passengers via the Internet and GPS (Global posi-
tioning system) technology to monitor the current position of users and the nearest
located drivers. The geolocation tracking process depends on [34]:
• An identification of mobile device´s position—Uber applications distinguish
between iOS and Android systems.
• Providing the right direction—for pointing directions, mapping software and API
(Application Program Interface) are used.
• Integration with mapping software—implementation of Google maps for solving
the logistic issues.
After a ride-ordering, either SMS or push notifications are sent to a client about
all the questions related to the ride. The difference in the service provision occurs
in the way of negotiating the payments of the transactions. Traditional taxi drivers
have a price list displayed in their cars, and the cost of a ride calculated by the taxi
meter. The Uber applications calculate an estimate of total cost per route before the
ride and then sends an electronic receipt via e-mail to the customer. The payments
for services are an integrating cashless system through either credit or debit cards, e-
wallet, PayPal’s or coupon code. The customers are also informed about an estimated
time of arrival (ETA) at intended destination before their ride [35].
Uber practices are directly affecting providers of the taxi services as both entities
operate in the same market and with the same target segments. However, Salmon
[36] suggests this competitiveness can have a positive effect in increasing income
for traditional taxi drivers. Since historically, taxi drivers had no bargaining power
related to their own income, however, emerging competition represents higher wages,
not lower earnings.
Disruption in the use of traditional taxi services is visible throughout the world. In
a survey by The Municipal Transit Agency in San Francisco indicated a significant
decline of 65% over a two-year period in the usage of taxi services as displayed in
Fig. 4. Moreover, Bergren suggests that the current impact of Uber will continue
to persist in decreasing numbers of rides in the taxi industry and impacting wages
revealed [37].
The analysis by Oxford Martin School reveals the extension of Uber services
resulted in a fifty percent increase in the number of self-employed drivers [38] and
about half as many drivers of Uber operate in United States [39]. The localization
technology enabling the finding of the closest passenger, estimates 9.3% reduction
in the searching time, allowing an increase rate of capacity utilization [39].
Recently, Laurell and Sandström [40] investigated whether Uber sharing economy
platform was primarily conceived as technological disruption or institutional disrup-
tion. The analysis of more than 6500 posts from various social media sites such
as Facebook, Twitter, YouTube, blogs, and forums, analyzed using social media
analytics (SMA). The analysis found many Uber users shared their experiences on
social networks sites. In terms of technological disruption, 21.6% of users considered
Uber’s performance measures related to the value of Uber services (comfort, safety,
precision, reliability, price) and those introduced because of Uber, such as related to
530 L. Šepeľová et al.

Fig. 4 Downturn in the taxi industry [37]

competitors (mobile applications or integration of other applications and services).

Twice as many users, 44.7%, considered Uber as an institutional disruption and that
the user-generated contents of social media platforms are transforming markets by
supporting or rejecting the efforts of entrants.

4.2 SWOT Analysis of Uber

Uber represents the advantage of the first mover, making it a phenomenon of the
ride sharing services. The concept of platform is facing positive, as well as negative
views being summarized in the SWOT analysis in the Fig. 5.
• Strengths. Compared to other providers, one of the key features being recog-
nized is a dynamic pricing strategy. The policy of “higher demand, higher price”
considers several elements that lead to a temporary increase in the price of driving
and encourages drivers to take orders to manage higher demand. Moreover, the
platform applicate lower prices per ride than most taxi providers [41]. Compared
to the riders, the operating costs of the platform are remarkably lower due to the
lack of vehicle ownership and related costs such as insurance and, in addition,
the company does not register drivers as its own employees [23]. The business
model records the interaction with the customer through a system of evaluation
of the driver, i.e., the scoring system, which increases mutual trust, safety, and
satisfaction among riders [42]. In fact, drivers with a score of less than 4.6 face a
problem of deactivating their account. In 2014, only around 2–3% of drivers were
situated in the deactivation zone. Under this tool, Uber can control the quality
of its services [43]. In addition, since its launch, the company has built a strong
brand entering new geographical areas [44] operating in 63 countries with adaptive
business offerings, such as Uber drive, eat, health, freight [45].
Sharing Economy Business Models: Informational Services … 531

Fig. 5 SWOT analysis of Uber

• Weaknesses. The business model of Uber is based on the dependency of drivers.

Unfortunately for the company, during its decade of existence, Uber has faced
several scandals ranging from sexual harassment to aggressive anti-competitive
practices that have led to reputational damage [46]. Being late, offensiveness,
cancellations etc. are other examples of bad behavior that travelers listed when they
evaluated drivers in their online reviews, in addition, they pointed out numerous
complaints regarding customer service. These two main contributions give rise
to Uber’s value co-destruction [47]. The consequences of unpleasant experiences
with Uber led to the #DeleteUber campaign, which went so far that 200,000 users
removed the application within a few days [48]. In addition, the company suffered
a loss of $5.2 billion in the second quarter of 2019, which was recorded as the
largest loss ever [49].
• Opportunities. Current CEO Khosrowshahi sees India, Africa, and the Middle
East as emerging markets for the next decade, not only by offering ridesharing,
but also by offering other products such as Uber Eats, which faces great rivalry,
especially in the Indian region [50]. Although the platform entered the Chinese
market in 2014, Uber eventually sold its shares to the Chinese competitor Didi.
Frankly, the platform was not ready to enter such an aggressive market and failed,
mainly due to regulations favored by local retailers in the region [51]. Increasing
the number of vehicles on the road would not only allow the company to grow but
would also reduce the estimated time of arrival (ETA) and provide an opportunity
to offer more fares [52].
532 L. Šepeľová et al.

• Threats. In 2016, the company faced a massive privacy data breach of 57 million
users and 600,000 drivers by hacking a cloud service [53]. This privacy attack cost
Uber $100,000, which was paid to the hackers for restoring the stolen data [54].
Once Uber expanded geographically and with its market shares, it became known
to local authorities, which began to address the legality and ethics of the company.
Due to vehicles and driving safety issues and a lack of corporate responsibility
[55], in some European countries, such as France, Germany, Italy, Spain, Belgium,
and the Netherlands [56] Uber rides have been banned because of “unfair trade
services” or “illegal taxi service” [57]. As in any business, there is also a danger
of substitutes, such as self-driving cars and competitors, for instance, Lyft, Didi,
Bolt, Yandex. Although Uber still ranks first place in the ride-hailing industry, if
its opponents geographically expand and extend their product diversity, it could
lead to the elimination of Uber rides in the future [58].

5 Airbnb and Room Sharing

5.1 Business Model of Airbnb

Since 2008, Airbnb has provided a two-sided online lodging platform option for
hosts to monetize their unused (free) space, and for guests, an option of choice from
numerous offers of short-term rentals, with lower costs [33]. In 2019, an estimated
enterprise value of Airbnb was around $35 billion [32]. Since its inception, the
company has recorded 7 million units, encompassing 100,000 cities in 220 countries
and with over 150 million users worldwide [59]. A simple business model of Airbnb
platform is shown in the Fig. 6.
Innovation of the Airbnb business model protects the identity of users by ensuring
authentic personal information and providing photographs and links to their social

Fig. 6 Business model of Airbnb

Sharing Economy Business Models: Informational Services … 533

accounts. Airbnb, just like Uber, is only a marketplace for connecting providers and
users of accommodation assets, but none of these platforms own any items [60]. Once
platform users confirm their order, hosts receive confirmation messages. Customer
payments are usually made through PayPal, direct deposit, or international money
wire. Revenue for the platform provider is derived from both actors: guests and
hosts. Guests pay between 9 and 12%, depending on the duration of their visit and the
hosts receive three percent for covering processing fees. To increase reservations and
sales, a free photographic service for attracting new guests is offered. Ert suggested
photos that are viewed as more trustworthy by guests charge higher prices than
their counterparts, who are perceived as less trustworthy [61]. As in the case of
Uber, Airbnb places a significant emphasis on the rating system, otherwise called
the “five-star review”. A mutual peer review is given by hosts and customers about
their overall satisfaction and experiences. In the sharing economy, rating systems
are a key tool for building trust between parties and encouraging future participation
[62].
Research from University of Zadar [63] explored the content and presentation
of information and communication, as well as simplicity and accessibility of data
from Airbnb platform. The results showed that interest in the home sharing services
is growing dramatically, especially amongst younger people. The platform provides
simple handling, integrity of payments, functionality of the service itself, and the
use of ICT in bookings. Users who are familiar with ICT did not have a high level of
dissatisfaction due to lack of communication with the provider that may sometimes
occur, for instance, when host´s cancellation occurs. With ICT, users can easily and
quickly find an alternative solution.
The Airbnb business model is considered complementary to the model of the hotel
industry and geared towards generating economic benefits for local cities provided
by Airbnb customers. Airbnb has significantly affected the hotel industry through a
strong network and growth of both users and service providers. Table 2 represents
numbers of available rooms offered by Airbnb compared to the ten largest hotel chains
as reported by Hotel News Now [64]. In 2014, Airbnb began strongly competing
with the larger hotel chains by offering comparable accommodations at lower prices,
targeting the business segment. By 2015, this segment represented 10% of Airbnb
customers. This had prompted cooperation between smaller and luxury providers of
hotel services that currently post their offerings on the Airbnb’s platform [65].

Table 2 The largest

Provider Existing hotels Number of the rooms
accommodation providers
(based on [64]) Airbnb 1,000,000
InterContinental Hotel 4840 710,295
Groups
Hilton 4278 708,268
Marriott 4044 692,801
Wyndham Hotel 7645 660,826
Group
534 L. Šepeľová et al.

Today, Airbnb and Uber are the most frequently explored platforms for the disrup-
tion of traditional industries. Both companies successfully demonstrate that the use
of unused resources can be organized globally. Their revenues reached an estimated
$1 billion in less than a decade, without the company owning one single room or
vehicle [22].

5.2 SWOT Analysis of Airbnb

Since its launch, the platform has become an integral player in the sector of
tourism and offers authentic accommodation in local residences [66]. An overview
of Airbnb’s strengths, weaknesses, opportunities, and threats can be found in Fig. 7.
• Strengths. The idea of an overnight stay in the lodging of a stranger would be
impossible without mutual trust between the participants. Therefore, the platform
created a reputation system for sharing and evaluating experiences of users and
hosts, as well as for creating profiles to get to know each other better. As shown
by Airbnb research in collaboration with Stanford University, non-feedback hosts
tend to receive four times fewer booking requests compared to a host with at least
one review, whilst the accommodation with ten feedbacks is ten times more likely
to be booked [67]. A survey by financial services company Morgan Stanley of
4000 Airbnb users found that more than half of respondents chose Airbnb because

Fig. 7 SWOT analysis of Airbnb

Sharing Economy Business Models: Informational Services … 535

of the lower price, and almost one-third were looking for an authentic travel
experience, such as learning about local culture and tradition accommodation
while staying close to locals [68]. In addition, the platform encourages existing
users with a referral program for each new user they recommend services of
Airbnb by providing financial compensation to both parties [69].
• Weaknesses. Research by Sthapit and Björk focused on negative reviews on
Airbnb, of which almost 90% of feedback indicated poor customer service and
dissatisfaction with the length of platform responses, lack of support in resolving
issues, and a reluctance to return money [70]. In addition, research has shown nega-
tive experiences with hostile behavior, such as disrespect, last-minute cancella-
tions, and misleading accommodation standards that lead to distrust of the Airbnb
platform, which depends on host interaction. Moreover, there has been recorded
numerous safety and privacy concerns among Airbnb users [68]. The business
model of the platform is based on host dependency. Thus, if a host provides poor
quality services to its customers, it damages not only the reputation of itself, which
in turn leads to distrust of host, but also to the platform [71].
• Opportunities. The platform noticed a sharp increase in the number of travelers’
interests in 2018, namely a 131% increase in the number of guests in China and
65% in India compared to the previous year. There are currently more than a
million listings in Asia-Pacific region. The goal of room-sharing provider is to
bring one billion users to platform over the next 10 years. Therefore, by 2030,
Airbnb plans to expand at least 40% of its business activities into emerging Asian
markets such as China and India [72]. The platform would be able to gain a compet-
itive advantage by expanding its current product portfolio, which would differen-
tiate it from the competition, for example by partnering with travel agencies and
offering a comprehensive travel package, insurance, car rental, etc.
• Threats. Many of the rents under the auspices of Airbnb are illegal, but the
company is not legitimately responsible for complying with local laws by its
hosts. In fact, tenants should rely on Terms of Service and local regulations [73].
Moreover, when renting with Airbnb, travelers avoid paying taxes, which are
charged in traditional accommodation facilities, e.g., accommodation taxes [74].
Nevertheless, the governments around the world are seeking a tool to regulate
short-term rentals (STR), for instance, France prohibited in some cities a whole
residence STR without special permits for the period longer than 120 nights in
one calendar year [75], San Francisco [76] and New York City [77] banned whole
residence STR that are not licensed for more than 30 days. In addition, several
lawsuits have been reported against Airbnb, such as racial discrimination, with
an African American man claiming that his application was repeatedly denied by
accommodation providers [78], or discrimination in Israeli areas [79]. As in every
industry, there is also a threat of current market players operating in the industry
such as Booking.com, HomesToGo, Vrbo and Flip Key [80].
536 L. Šepeľová et al.

6 Conclusion

6.1 Synopsis

Sharing economy is not a new business model but has expanded due to informational
technology. As demonstrated in the study, innovative technologies have significantly
disrupted business models of platforms, making the way of sharing in the global
dimension much easier than ever before. The innovativeness in the new ways of
transmission of sharing capital and services involves the integration of ICT-platform
as mediator in the sharing relations. A considerable disruption, compared to tradi-
tional brick and mortar intermediaries, lies in the fact that platforms are not the
owners of sharing items.
Further, the technology incorporated into business models made it possible to
liquidate transaction costs to the minimum level that are normally associated by
doing businesses and in the case of micro-enterprises, transaction costs would absorb
a large part of the profit from the business. Significant cost reductions in transaction
costs such as costs of switching, searching, and negotiating have been associated
with the sharing economy for both providers and users. Without ICT—based sharing
platforms, these costs would be too high and the development of the sharing economy
in the commercial markets would be very difficult. Cost reduction in the electronic
commerce represents a considerable advantage in the removal of certain entry barriers
for new providers entering the market of the sharing economy [81].
Moreover, the platforms face negative advertisements due to numerous legal
inconsistencies. Continuous improvement within legal constraints and cooperation
with governments would be beneficial in adopting sharing rules in cities and coun-
tries around the world [82]. Due to dependency on ‘partners’ (service providers), if a
partner provides poor quality services or behaves inappropriately, customers tend to
show resentment towards the platform. It was found that trust in the service provider
is directly proportional to the trust in the platform, without trust the platform would
not be able to provide its services, so the tools to gain trust in a sharing economy
are reputation systems and social networks [71]. Finally, there is significant ease
of business model imitation recognizable within sharing economy platforms due to
low barriers to entry, as well as the platform’s reliance on devices that have Internet
access and the technical knowledge of customers using the application [16, 83].

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