Reasons for Failures of Sharing Economy Businesses
Chasin Friedrich, von Hoffen Moritz, Hoffmeister Benedikt, Becker Jörg
With the rapid growth of successful businesses like Airbnb and Uber, the sharing economy is often represented as a ubiquitous threat to traditional value chains. However, in the top dogs’ slipstream reside a variety of lesser-known Internet-based sharing platforms that have faced serious setbacks, resulting in operational failures. The lack of a comprehensive overview of these failures and why they failed makes it difficult to learn from them. We conducted interviews with managers of active sharing economy enterprises and analyzed 122 sharing platforms that discontinued operations to compile a profile of failed sharing businesses and to identify the challenges that prevented them from securing a sustainable market position. We employed a multi-method approach to synthesize fragmented insights from various data sources into a comprehensive overview of seven potentially terminal threats for sharing platforms, and four major differences between failed and successful companies. The results are of immediate value in understanding the risks that emerging sharing businesses face.