A strategic framework for a profitable business model in the sharing economy

Abstract There is an increasing interest in the rapid rise of the sharing economy, from both academicians and practitioners. Recent research has focused primarily on the relationship between sharing economy firms (service enablers) and customers. Moreover, service enablers have primarily allocated their resources to acquire a critical mass of customers. This study takes a balanced two-sided customer relationship approach toward understanding the dynamics of this triadic business model (service enabler – service provider – customer). To maintain this emerging economy's fast-growth pace, service enablers should strive to acquire, retain, and win-back profitable service providers and customers simultaneously. We propose a conceptual strategic framework for the development of service providers and customers considering multigenerational aspects based on inferences from the literature, popular press, and interviews with members of the triad in the sharing economy. Based on our investigation, the sharing economy services are mostly adopted by Generation Y, whereas other generations are still in the early phase of adoption. Additionally, customer and service provider churn is high. We argue that this double-sided customer relationship framework will help firms take appropriate measures to keep all the actors involved in the process satisfied, loyal, and profitable in the long run.