The Progression and Impact of the Sharing Economy; a Preface

Even though most people still prefer ownership, it may not be the most practical mode of consumption in many situations anymore, especially for the younger generations. A recent survey revealed that more than 70 percent of millennials’ top priority is to own a home, which is significantly higher than their other top priorities such as traveling or even getting married (Del Valle, 2018). Nevertheless, their homeownership rate is considerably lower than that of Gen Xers and baby boomers when they were at the same age group (Nova, 2018). Therefore, unwillingness to own is not why the nonownership consumption trend (or the so-called sharing economy) has emerged and become stronger in recent years. A host of other factors plays a major role in such growth, all of which are worthy of academic attention and have major implications for marketers and consumer studies.

The increasing burden of ownership that eventually can be translated into the cost of ownership is perhaps one of the main reasons of the boost of the sharing economy. This economy provides a platform upon which the users and owners can meet each other halfway. The users will get access to goods and materials for more affordable prices, or sometimes free, whereas the owners can cover parts of the ownership cost by receiving reimbursement for providing access to their spare room, idle car, tools, or any other shareable materials (Botsman & Rogers, 2011). All this is possible due to a more efficient use of the available resources by collaboration among ordinary individuals (as opposed to business ventures). No wonder monetary reasons come up first and heavily weighted in academic research investigating the antecedents of participation in the sharing economy (Akbar, 2019; Lamberton & Rose, 2012) and materialistic beliefs increments such participation (Davidson, Habibi, & Laroche, 2018).

Sharing economy growth was not only due to tight budgets and increased burdens of ownership; technology advances, especially social media, and increased consumer awareness about environmental causes and responsible consumption have been among anecdotes (Bardhi & Eckhardt, 2012; Chen, 2009). In its general sense, the sharing economy has not been all about money and that is why sharing practices with goodwill intentions such as Couchsurfing exist and continue to thrive. In such contexts, community building and emphasis on sustainability and environmental concerns are among the top priorities of participants. Perhaps association with such good intentions, concurrent with lack of clear framework to understand sharing boundaries, partly explains what Price and Belk (2016) call “share washing.” That is, labeling practices as sharing that have little to do with sharing and more with renting or other forms of exchange (Matzler, Veider, & Kathan, 2015) in order to create positive attitudes among participants (Belk, 2014b). The failure of Zipcar’s community building efforts based on the premise of being a sharing community (Bardhi & Eckhardt, 2012) proves lack of effectiveness of share washing efforts (Habibi, Davidson, & Laroche, 2017). Research is lagging here. There is more need to study effectiveness of share washing and other forms of communication messages within sharing economy context especially knowing that lay consumers may have a different perspective of sharing than academics or practitioners (Reich & Yuan, 2019).

Nonetheless, the mere existence of the sharing economy is a blessing for contemporary consumers as it provides more alternatives in the market to enjoy nonowned materials and/or more efficiently utilize the owned materials that would sit idle otherwise. Additionally, it provides tangential values such as social utility, communal values, and possible environmental benefits. All and all, it offers smarter choices for consumption and that is perhaps why people who are more intelligent tend to engage more often in a sharing economy (Aspara & Wittkowski, 2019). Unfortunately, these benefits come with some dark sides, unintended consequences for other consumers and the society as a whole, (Griffiths, Perera, & Albinsson, 2019) which is an understudied aspect of the sharing economy.

Sharing economy is different from traditional exchange in various ways. This is why several scholars have attempted to develop conceptual frameworks to enable researchers to better understand and explain contemporary nonownership market practices (e.g., Belk, 2007, 2010, 2014a, 2014b; Habibi, Kim, & Laroche, 2016). The main distinction is that ownership does not transfer during transactions. Moreover, to utilize objects more efficiently, which is the premise of the sharing economy, users and providers have to collaborate. This collaboration then entails more social interactions, shared responsibility of the accessed object, and value cocreation. However, as Habibi et al. (2016) theorize, the degree to which consumers collaborate, share, socialize, and engage in monetary exchange norms differ greatly within the umbrella of nonownership consumption. Such differences should be considered thoroughly before and during academically or practically involving with sharing economy practices (Habibi et al., 2017) and after when interpreting results of studies and actions.

Sharing economy is in its early growth stages while the relevant research is still in its infancy. Research has to keep up with the dynamic nature of the sharing economy if we are to understand its consequences for consumers, companies, and societies. Many issues at the micro and macro levels deserve attention. At the micro level there are questions such as how to enable the amateur providers who are essentially competing against professional businesses to stay sustainable? How do consumers perceive benefits, make choices, complain, and spread the word, and so on? At the macro level issues such as policies that can protect consumers and ensure growth of the sector, intended and unintended consequences and impacts on companies, brands, and societies are worthy of detailed attention. I believe this JMTP issue addresses the need for more theory and research surrounding these micro and macro level issues. Many different perspectives and methodologies are presented and discussed in this volume but each article assists in a deeper understanding of dynamics and complexity of the sharing economy. Together the articles take a step forward and illuminate some of the underexplored and novel areas of the sharing economy, which I hope encourage future theory and research around problems that consistently arise in the fast growing and dynamic field of nonownership consumption.

The issue leads with an exciting article authored by Suri, Huang, and Sénécal about service failure in the sharing economy. Essentially, most, if not all, sharing economy providers are service providers. All Airbnb and Couchsurfing hosts, Taskrabbit taskers, and Uber and Lyft drivers are mostly amateur ordinary individuals who offer their services because of a third party enabler platform. Where there is service, there will be service failure and Suri, Huang, and Sénécal (2019, this issue) are, to the best of my knowledge, the first to examine service failure in the context of the sharing economy. What makes this research interesting and necessary is the unique twist that the sharing economy adds to the service literature, which is the segregation of the individual providers and the service enabler (e.g., Airbnb Host vs. Airbnb). Now consumers can blame either the provider or enabler whereas in the traditional services, the enabler and provider are essentially the same (e.g., employees of the service provider).

Through conducting three experimental studies, the authors support their arguments that consumers are more willing to forgive the failure if it is attributed to the service provider (i.e., peers), especially if the failure was not preventable. When the failure is attributed to providers, an apology would be effective as a recovery strategy and when it is attributed to the enabler (e.g., Airbnb); monetary compensations could be an effective service recovery strategy. The authors draw our attention to a very subtle advantage that sharing economy companies such as Airbnb have over traditional service providers. That is, consumers detach most service failures from the company and are more empathic with providers. This creates a buffer that protects these brands. Future research needs to examine this notion deeper and perhaps in different contexts, as the sharing economy is expanding toward more and more service alternatives. What are the limits of this forgiving attitude?

Next, Zhang (2019, this issue) considers one of the truly underinvestigated areas of the sharing economy; that is, how to enable the individual providers within the sharing economy. The providers, whether they are sharing a spare room in their apartment through Airbnb or their car within car sharing platforms, act as micro-entrepreneurs who seek gaining some sort of value (usually monetary) from their shared asset. They are most often ordinary peers who are not business savvy and act as amateurs (Li, Moreno, & Zhang, 2015) and that is perhaps a reason why consumers are more forgiving toward them (Suri et al., 2019, this issue). Their existence and participation is vital for growth and omnipresence of the sharing economy (Botsman & Rogers, 2011). Zhang (2019) ran a quantitative study using machine learning technics on more than 2.7 million reviews of Airbnb users in America to find out the most important factors that consumers mention in their reviews. Additionally, using a mathematical model, he investigates the impact of these factors in addition to characteristics of the provider (the host) on performance of the shared object (the listing property).

This research is a significant contribution to the field. From an academic standpoint, this study uses advanced technics of topic modeling (Blei, Ng, & Jordan, 2003) to analyze large sets of online reviews in the sharing economy. Thus, it can be used as a leading model for future researchers who pursue leveraging big data and machine learning capabilities to analyze what consumers think and talk about in a the field. From a practical perspective, the article provides excellent insights to hosts: from the top factors consumers consider the most important when booking a property to cancellation policies that yield the best results and so on. Some of the results are counterintuitive and deserve further scrutiny, perhaps by behavioral researchers.

Next, In an extensive study of the general audience of the sharing economy, Albinsson, Perera, Nafees, and Burman (2019, this issue) investigate the frequently investigated problem of positive or negative antecedents of participation in the collaborative consumption practices. However, their study is unique in many ways. First, they cover a wide range of important variables that have been understudied or unstudied before. Second, they run their study in two countries, India and the United States. This addresses the lack of enough attention to the global nature of the sharing economy. Third, and this is an important aspect that is ignored in much of the extant research, they examine the antecedents across various sharing economy platforms along the sharing/exchange continuum introduced by Habibi et al. (2016). That is, they investigate three forms of practices that range from B2C models (e.g., Zipcar) to pure C2C models (e.g., neighborhood tool sharing communities). This makes their findings more robust and generalizable as they carefully consider the context of practices under study.

In their study, they found out factors such as perceived sustainability, generosity, trust, materialism, possessiveness, risk seeking, and risk propensity will positively affect adoption of collaborative consumption, which is in line with current research (e.g., Davidson et al., 2018; Lamberton & Rose, 2012; Lawson, Gleim, Perren, & Hwang, 2016; Ozanne & Ballantine, 2010). Additionally, the results show that cultural values have little power to distinguish the adoption of the sharing economy, indicating the globally accepted nature of the sharing economy. Users also showed similar preferences for different types of collaborative consumption; however, in India, an interaction between income and type of platform was observed. Lower income consumers prefer more sharing-based practices (e.g., carpooling) and high income consumers prefer more exchange-based practices (e,g., short-term car rental). Overall, this research replicates previous findings and promises some new variables that can potentially encourage adoption of collaborative consumption.

The next article, authored by Philip, Ozanne, and Ballantine (2019, this issue), takes Social Practice Theory approach to examine the emergence and development of an online swapping practice. This theory is introduced to the consumption field by sociologists (e.g., Halkier, Katz-Gerro, & Martens, 2011) and has been used to study sustainability issues with consumption (Hargreaves, 2011; Huber, 2017) as well as other issues related to marketplace practices (e.g., Magaudda, 2011). This approach puts the focal practice at the center of attention rather than studying behaviors. It decomposes the practice to its vital elements that is, materials, meanings, carriers, skills, and rules. The argument is by comprehending these elements and their interplays, we can understand emergence and growth of a focal consumption practice. Understanding emergence and growth of sharing economy practices is crucial for its success and sustainablity (Botsman & Rogers, 2011). In the online swapping context, the online platform and swappable goods, materials, may be perceived as objects that can create some sort of meaning (e.g., immortalizing material objects), so individuals, carriers, develop skills to swap online while enacting and negotiating rules of the trade.

Reading this article provides deep micro-level insights to the readers interested in the sharing and online swapping communities. The article extracts various meanings that actors, providers, or takers derive from the practice of swapping; describes how rules are enacted within the community to assure sustainability and safety of the users; illustrates the dynamic nature of the practice; and provides practical and theoretical implications for managers and academics. Future research can build on these micro-level insights and investigate them to a broader level to connect them to consumer behavior. For example, how does each of these ascribed meanings shape the way consumers behave in the community?

In the next article, Reich and Yuan (2019) tackle the sharing conceptualization and ask the fundamental question: are we, as marketing scholars, getting it right? The argument is that the definitions provided by some researchers (e.g., Bardhi & Eckhardt, 2012; Belk, 2010; Habibi et al., 2016) sitting in their ivory tower offices might be different from what actually goes on in consumer minds. Building on folk psychology domain (Goldman, 1993; Gordon, 1986), they conduct four studies to support the idea that consumers, if not given an official sharing definition, have a more general evaluation of sharing-like nature of some marketplace practices such as Couchsurfing versus Airbnb, which were separated by previous research (Habibi et al., 2016). The authors also support that consumers more or less hold a unified conceptualization in their minds and then extract the three core features of this conceptualization.

I commend the authors for taking a different approach to conceptualize sharing from consumers’ perspectives and I encourage the readers to interpret the results cautiously. Sharing has been practiced since ancient times—bonding people within societies (Price & Belk, 2016)—and is embedded in our daily lives. Therefore, even though each individual consumer might not have or face a formal definition of sharing at any given time, deep in their consciousness they have a good sense of what sharing is and what it is not (Belk, 2010). This is perhaps why Zipcar’s efforts in community building in their so-called sharing community was not effective (Bardhi & Eckhardt, 2012). Consumers knew it was not sharing even though they were not given any definition.

The concept of “sharing” is complex and multifaceted. Each facet also can be interpreted differently. For instance, the authors interpret the statement “you split the utility bill with a roommate” as containing “the greatest degree of precise calculation” therefore being more of an exchange characteristic while their test shows that consumers rated the statement “most highly in terms of sharing involvement” (Reich & Yuan, 2019, p. 435). They use this as evidence of discrepancy between formal definitions and lay consumer definition. However, in this case, one can easily argue otherwise. That is, precise calculation entails calculating how much utility each roommate has used and then pay accordingly. Therefore, splitting the bill equally can be as simple an act of sharing the bill without undergoing heavy calculations and thus that is why consumers rated it as entailing the highest degree of sharing. In any case, this research opens doors to much controversy that is needed for the field to gain a better understanding of contemporary consumers and their sharing habits. Future research has a long way to go.

The last article draws our attention to the less academically popular problem of negative consequences of the sharing economy (Griffiths et al., 2019, this issue). They build upon economic theories of externalities and concerned markets to count and explain some of the negative unintended consequences of the sharing economy for its different stakeholders, some of which have little to do with the sharing economy (e.g., residents of a neighborhood filled with Airbnb rentals). The argument is that in order for sharing economy companies to run smoothly and be able to meet the demand, they need to purposefully keep some surplus assets idle to employ them for future unpredicted commercial use.

For instance, at any given moment Airbnb needs to have vacant rental properties for consumers to use. This contrived idle surplus then will have some negative externalities such as increased rent for locals and increased homelessness. Negative externalities are unintended byproducts of such inefficiencies in resources (Lazar, 2018). The article counts these potential externalities in the main sharing economy categories that is, ridesharing, home-sharing, and bike-sharing practices and provides suggestions for policy makers and practitioners.

On a broader level, this conceptual aticle invites academics and policy makers to pay more attention to negative consequences that the sharing economy can bring about, especially for those with little involvement with the sharing economy. In order to better understand the scope of the problems, more data is needed on the magnitude of these negative effects. For instance, how many resources are being kept idle at any given moment in order to be able respond to demand and keep the prices at affordable levels for consumers? How much pollution and/or unnecessary consumption is generated due to more affordability that sharing economy offers? How can regulators pass rules to hold the sharing economy and new startups that facilitate easy and shared consumption more responsible? These are vital questions to ask and to respond to if the sharing economy is going to be sustainable in the future. Overall, I hope the readers enjoy reading these articles and find them stimulating for more thoughts and future theory and research.