Deck 10: The Sharing Economy, Collaborative Consumption, and Creating More Efficient Markets Through Technology

Question 1

Highly _______ markets are especially ripe for rollup in electronic marketplaces

Answer 1

fragmented

Question 2

Social media profiles can also be used to fight online fraud.

Answer 2

True

Question 3

Rent the Runway and Chegg have chosen to purchase their own inventory for rental to customers, rather than relying on inventory provided by participating citizens suppliers. This incurs an additional cost on these firms. Why would they opt to use this model if startup costs are going to be more expensive?

Answer 3

For some marketplaces, end users simply can't be relied on to consistently manage inventory and logistics. In these cases, successful "collaborative consumption" efforts own inventory to ensure quality and gain more control over the customer experience. Rent the Runway meticulously oversees its dress inventory, packing product for delivery, running a massive in-house garment cleaning effort, and retiring dresses that are noticeably worn. The goal is to ensure that an experience with the firm will bring customers a "Cinderella moment" filled with delight, rather than disappointment. While some start-ups have attempted to allow women to rent dresses to others, none has achieved anything close to the scale of Rent the Runway's four million members. For the same reason Chegg oversees textbook inventory for the timely delivery students demand. A service where college students rented textbooks to others could never consistently deliver on quality.

Question 4

Which of the following is *not* true regarding the competitive dynamics of most sharing economy marketplaces?

A) Ratings represent a switching cost built over time by early participants in sharing economy marketplaces.
B) Late-movers have a substantial advantage in this market since inventory should be cheaper to acquire for those firms that have entered markets more recently.
C) Network effects should grow over time, favoring firms that got a successful, early start over rivals who arrived late doing the same thing.
D) These are two-sided markets.
E) None of the above - all statements are true.

Question 5

What are some concerns regulators have over the sharing economy using independent contractors and not full time employees?

Question 6

If eBay and Craigslist are included, some 40 percent of the US and Canadian population have participated in the sharing economy.

Question 7

Crowdsourcing has a number of benefits, but problems include the potential for bias and discrimination. How can crowdsourced ratings also reflect the crowd's bias and reinforce discrimination.

Question 8

Prof. Juliet Schor says that businesses considered to be part of the _________________ can involve the recirculation of goods, increased utilization of durable assets, exchange of services, or the sharing of productive assets

Question 9

While some fear Airbnb is taking jobs away from hotel chains, the firm is also creating jobs and driving demand for a whole array of platform-enhancing services, including photographers, key-exchange coordinators, in-home chefs, house cleaners, and ride-sharing services.

Question 10

Uber prices services according to demand. This allows the company to increase rates during peak periods in order to attract more potential suppliers into the market to meet demand.

Question 11

Payment continues to represent a barrier to widespread adoption of the sharing economy, since many consumers feel uncomfortable exchanging cash or financial information with strangers.

Question 12

While unions and hotel chains might not like Airbnb and feel threatened by its offerings, Airbnb is legal in nearly every market worldwide since private citizens are fully empowered to rent property that they own.

Question 13

Firms classified as being part of the sharing economy and collaborative consumption are still considered too risky to attract substantial venture capital investment.

Question 14

Why were fashion firms initially threatened by Rent the Runway and why has their position evolved over time?

Question 15

Firms in the so-called "sharing economy" fuel more efficient matching of ___________ and __________, lower costs, enable more efficient resource use, and provide a level of reach and services heretofore unavailable

Question 16

Citizen suppliers in the sharing economy may find their _______ costs increase due to increased product use and an increase in perceived risk over time.

Question 17

Why are sharing economy marketplaces so attractive to consumers?

Question 18

Given examples of firms in the sharing economy that focus on the following categories: goods, transportation, and capital provision. List markets challenged in each of these areas.

Question 19

Which of the following is *not* an example of larger, conventional firms working with sharing economy startups?

A) Apple's purchase of Beats to give new musical artists more exposure.
B) Condé Nast's investment in Rent the Runway.
C) Google's investment in Uber.
D) Walgreens' partnership with TaskRabbit.
E) W Hotel partnering with Desks Near Me.

Question 20

What is the difference between collaborative consumption firms Zilok and Chegg.

A) Zilok has gone public, Chegg hasn't.
B) Zilok is a service where a person comes to your home to complete a task, Chegg is a rental firm.
C) Zilok provides inventory provided by participating 'citizen suppliers', Chegg owns its own inventory.
D) Zilok is the European equivalent of Chegg.
E) Zilok was purchased by Chegg underscoring the 'winner take all' dynamics of these markets.

Question 21

Which of the following statements is true about Airbnb's revenue model?

A) Airbnb currently does not make money via transactions, only from advertising listings on its website.
B) Airbnb only charges property owners who rent on the website.
C) Airbnb only charges guests who rent on the website.
D) Airbnb charges both property owners and guests as part of transactions on their website.
E) Airbnb doesn't charge transactions for the three years after it enters a market, so as to generate two-sided network effects of property rents and guests searching for properties to stay in.

Question 22

How does Airbnb improve customer and renter trust while reducing risks that its platform will be used for illegal purposes?

Question 23

How does Uber ensure high driver quality?

Question 24

Describe Uber's API and how network effects play a role in its attractiveness to partners.

Question 25

In what ways is Uber superior to conventional cab service, both for drivers and for customers?

Question 26

Entrepreneurs are scrappy in their quest to gather market intelligence and understand how customers respond to their offerings. How did Airbnb's CEO gather additional intelligence on how the firm was being used?

A) He bought several apartments to rent out under Airbnb
B) He became an Uber driver
C) He lived out of Airbnb rentals full-time
D) He became a bell hop at a San Francisco Hilton Hotel
E) All of the above

Question 27

Surge pricing allows Uber to increase the supply of drivers when demand is high.

Question 28

___________ refers to the technology used to integrate Uber with other services, including OpenTable, GoogleMaps, and Spotify.

Question 29

Uber's CEO views itself as software platform for shipping and logistics.

Question 30

Describe how Uber is a "big data" firm and how data gives the firm advantages over traditional and new rivals.