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Technology strategy and management

How Traditional Firms Must Compete in the Sharing Economy

By Michael A. Cusumano
Communications of the ACM, January 2015, Vol. 58 No. 1, Pages 32-34
10.1145/2688487
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How Traditional Firms Must Compete in the Sharing Economy, illustration — Credit: Andrij Borys Associates / Shutterstock

Traditional companies now have another set of competitors to worry about—Internet startups in the "sharing economy." These new companies are actually Web platforms that bring together individuals who have underutilized assets with people who would like to rent those assets short-term. The assets targeted by these startups range from spare time for everyday tasks (TaskRabbit, Fiverr) and spare time and automobiles to drive people around (Uber, Lyft) to extra rooms (Airbnb, Flipkey, Roomba) and occasionally used tools and other household items (Streetbank, Snap-Goods/Simplist).^9,12

Sharing-economy startups are in many ways a logical outgrowth of social media platforms such as Facebook, Pinterist, and Trip Advisor, which bring together people with common interests to share ideas, information, or personal observations. They threaten established companies to the extent that peer-to-peer networks can grow exponentially through the power of platform dynamics and network effects (see my previous Communications columns "The Evolution of Platform Thinking," January 2010, and "Platform Wars Come to Social Media," April 2011).

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