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Business modes in the sharing economy: How does the OEM cooperate with third-party sharing platforms?

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  • Li, Yongjian
  • Bai, Xuanming
  • Xue, Kelei

Abstract

The sharing economy has changed not only the purchasing and use behaviour of consumers but also the operating mode of original equipment manufacturers (OEMs). For OEMs, the sharing economy represents a challenge and an opportunity. In the car market, some OEMs (e.g., General Motors and Toyota) choose to cooperate with peer-to-peer (P2P) sharing platforms, while others (e.g., Nissan and Haima) choose to work with business-to-consumer (B2C) sharing platforms. This paper develops an analytical framework to study how the OEM selects business modes under the sharing economy. Considering participation concerns inherent in the sharing economy, including renters' perceived value of shared products and owners’ maintenance costs, which depend on the marginal cost of products, we first study how the profit-maximising sharing platforms of the P2P and B2C modes affect the OEM. Then, we analyse the mode decision of the OEM. We find that the OEM should choose to cooperate with the B2C platform if the value perception factor is higher or the marginal cost is lower. If the value perception factor is in the middle range and the marginal cost is higher, the OEM should choose the P2P platform. The OEM should not cooperate with any sharing platforms if the value perception factor is lower and the marginal cost is higher.

Suggested Citation

  • Li, Yongjian & Bai, Xuanming & Xue, Kelei, 2020. "Business modes in the sharing economy: How does the OEM cooperate with third-party sharing platforms?," International Journal of Production Economics, Elsevier, vol. 221(C).
    • Handle: RePEc:eee:proeco:v:221:y:2020:i:c:s0925527319302774
    DOI: 10.1016/j.ijpe.2019.08.002
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    Cited by:

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    3. Linda Heejung Lho & Wei Quan & Jongsik Yu & Heesup Han, 2022. "The sharing economy in the hospitality sector: The role of social interaction, social presence, and reciprocity in eliciting satisfaction and continuance behavior," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-12, December.
    4. Bian, Yiwen & Cui, Yitong & Yan, Shuai & Han, Xiaohua, 2021. "Optimal strategy of a customer-to-customer sharing platform: Whether to launch its own sharing service?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    5. Kelei Xue & Guohua Sun & Tongtong Yao, 2022. "Incentive Mechanisms for Carbon Emission Abatement Considering Consumers’ Low-Carbon Awareness under Cap-and-Trade Regulation," IJERPH, MDPI, vol. 19(7), pages 1-27, March.
    6. Zhang, Yu & Huang, Min & Tian, Lin & Cai, Gangshu George & Jin, Delong & Fan, Zhiping, 2023. "Manufacturer’s product line selling strategy and add-on policy in product sharing," European Journal of Operational Research, Elsevier, vol. 308(3), pages 1332-1343.
    7. Huang, Yeu-Shiang & Fang, Chih-Chiang & Lin, Szu-Yu, 2023. "Pricing and operating strategies for products in the sharing economy," International Journal of Production Economics, Elsevier, vol. 266(C).
    8. Sun, Zhongmiao & Xu, Qi & Liu, Jinrong, 2021. "Pricing and replenishment decisions for seasonal and nonseasonal products in a shared supply chain," International Journal of Production Economics, Elsevier, vol. 233(C).
    9. Xiaotong Guo & Yong He, 2022. "Mathematical Modeling and Optimization of Platform Service Supply Chains: A Literature Review," Mathematics, MDPI, vol. 10(22), pages 1-19, November.
    10. Qiaoyu Peng & Chuanxu Wang, 2022. "Ship space sharing strategies with different rental modes: How does NVOCCs cooperate with booking platform?," Operational Research, Springer, vol. 22(3), pages 3003-3035, July.
    11. Ho, Shirley J. & Chang, Hung-Wei, 2022. "Impacts of sharing business on production, sales, and rental markets," International Journal of Production Economics, Elsevier, vol. 248(C).
    12. Xu, Xun & Zeng, Shuo & He, Yuanjie, 2021. "The impact of information disclosure on consumer purchase behavior on sharing economy platform Airbnb," International Journal of Production Economics, Elsevier, vol. 231(C).
    13. Chen, Mingyang & Zhao, Daozhi & Gong, Yeming & Hong, Zhaofu, 2021. "Reference-dependent preferences in the on-demand service newsvendor with self-scheduling capacity," International Journal of Production Economics, Elsevier, vol. 234(C).
    14. Svetlana Revinova & Svetlana Ratner & Inna Lazanyuk & Konstantin Gomonov, 2020. "Sharing Economy in Russia: Current Status, Barriers, Prospects and Role of Universities," Sustainability, MDPI, vol. 12(12), pages 1-23, June.
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