Implications for existing businesses
Existing businesses that use the traditional models based on ownership may find the sharing economy to be a serious threat to their profitability. Airbnb has added a layer of competition in the hotel industry as has Uber for traditional taxi companies. This has led to protests from businesses in some countries like Australia and the US. Should existing businesses try to beat these companies with their existing model but different marketing strategies or join them in the sharing economy and beat them at their own game?
The first option looks like the more difficult path. How can traditional taxi companies compete with Uber? Probably they can’t, since taxi companies have higher overhead costs, taxes and stricter regulations that increases their overall cost of doing business. Uber on the other hand is having the easier ride, mostly not having to deal with these costs and regulations. In the following ‘steps’ we will explore the strengths and weaknesses of different strategies.
What is your five year prediction for the taxi industry in this fast paced sharing economy?
Share your predictions in the Comments area.
© RMIT University 2017