Assessment Task 1: Analytical Report (Individual) – ‘Business Model Analysis’ (40%)Due Tuesday 28 August – week 6 (on UTS Online by 23:59)
Background- Making money from your idle capacity – be that time and skills, or assets such as your spare room, car, or driveway – is made easy by firms offering platforms to connect supply and demand in the collaborative economy. Indeed, drivers for Uber, hosts on AirBnB, or ‘taskers’ doing odd jobs on TaskRabbit, are increasingly described as ‘micropreneurs’. Internationally, the collaborative or sharing economy (variously conceived) encompasses everything from labour hire (TaskRabbit; Handy) to pet care (DogVacay; PawShake), parking (ParkHound; MonkeyParking) and equipment rental (Spinlister; Snapgoods). Such platforms, many initially based on connecting neighbours and communities, and/or driven by a social purpose (hence the earlier label of the sharing economy), have also led to the emergence of global giants, some with capital valuations of over US$70 billion. Their profit-driven business models are also disruptive for traditional industries, such as transport, accommodation, and logistics. These ‘peer to peer marketplaces’ are also emerging in more specialised industries such as professional services, for instance, online marketplaces for legal services. Peer to peer market places are also emerging in financial services with crowd sourced equity platforms for start-ups (www.crowdcube.com), peer-to-peer lending (www.zopa.com), insurance (www.friendsurance.com), to disrupting traditional forms of philanthropy (www.chuffed.org). The rise of collaborative consumption or the sharing economy is fundamentally reshaping how consumers buy and sell services. The main attraction for suppliers, or rather ‘workers’, on these platforms, is – unsurprisingly – the flexibility they offer in earning extra income. But on the down side, a lot of uncertainty comes with such work. This wouldn’t surprise those who are already freelancers, moving from gig to gig. Newcomers, however, have to come to grips with having less security and no guaranteed income, fixed benefits, or other standard worker protections. From a government perspective, while these services have proven popular with consumers, they often exist in a regulatory grey area or in outright contravention of existing laws. Furthermore, they often raise serious issues in relation to public safety, workers’ rights, tax (such as tourism and hotel taxes), and accessibility. There are also broader questions on the impacts on public amenity and utility and potential market distortions, such as AirBnB’s impact on access to the traditional rental market, or the visual and safety fall-out from dockless shared bikes. Task The Australian government, like many governments globally, is attempting to respond to the rise of collaborative innovation and the phenomena of ‘micropreneurship’. Your task is to provide an analytical report to inform such government inquiries.
For the purposes of this assignment, you are to:
1. Briefly explain the advantages and disadvantages of the collaborative economy – for workers, businesses and the government;
2. Select one industry that is being challenged by a collaborative economy model. Explain this industry’s traditional business model (incumbent model) and means of creating and capturing value (you may use an example of a leading incumbent firm here, as well as a description of the traditional industry);
3. Select one existing collaborative economy firm within this industry (as described above) and analyse how this new business model is able to create and capture superior value. Include consideration of how (or how not) this challenger model may maintain a competitive advantage. Note that neither AirBnb nor Uber can be the focal organisation.
4. Identify and reflect upon some of the unintended consequences of the success of this model (as analysed above) in terms of who wins and who loses.
This report needs to also be succinct, no more than 2500 words (excluding references). You may use sub-headings. You must submit on UTS Online.
You will be assessed as follows:
Understanding of the collaborative economy and associated concepts and debates 5%
Industry and traditional firm analysis
– Appropriate selection of industry, sufficient research conducted
– Identification of incumbent(s), traditional models of creating and capturing value, drivers of innovation and level of competition
– Use of appropriate references, diagnostic tools and frameworks 10% Collaborative economy (challenger) firm analysis
– Appropriate selection of challenger firm, sufficient research conducted
– Analysis of how it creates and captures value, using appropriate analytical tools
– Compare and contrast to incumbents – Consideration of sustainability of its competitive advantage 15%
Conclusions
– Identification of unintended consequences of the success of this model – for example, for firm, industry, workers, government 5%
Clarity of writing, grammar, spelling, references 5%
Recommended background information:
https://theconversation.com/uber-micropreneurs-signal-the-end-of-work-as-we-know-it-42483
http://www.collaborativeconsumption.com
https://hbr.org/2015/01/the-sharing-economy-isnt-about-sharing-at-all
https://hbr.org/2015/10/what-customers-want-from-the-collaborative-economy
https://hbr.org/2014/09/sharings-not-just-for-start-ups
http://www.fastcoexist.com/1679903/the-rise-of-the-micro-entrepreneurship-economy
https://theconversation.com/in-love-with-uber-and-airbnb-you-might-have-disruption-fever-49592
Cannon, S., & Summers, L. H. (2014). How Uber and the Sharing Economy Can Win Over Regulators. Harvard Business Review, 13.
Cohen, B., & Kietzmann, J. (2014). Ride on! Mobility business models for the sharing economy. Organization & Environment, 27(3), 279-296.
Cusumano, M. A. (2015). How traditional firms must compete in the sharing economy. Communications of the ACM, 58(1), 32-34.
Hamari, J., Sjöklint, M., & Ukkonen, A. (2015). The sharing economy: Why people participate in collaborative consumption. Journal of the Association for Information Science and Technology.
