Reasons for Failures of Sharing Economy Businesses

Businesses, the public, and academics are showing increasing interest in the sharing economy, spurred on by the success of platforms like Airbnb, Uber, CouchSurfing, Lyft, HomeAway and BlaBlaCar challenging conventional value chains by enabling private individuals to share physical resources temporarily via an IT-enabled platform. Our research reported in this article focused on the segment of the sharing economy where private owners of physical resources offer them for temporary hire or use by other individuals. For the sake of brevity and consistency, we refer to this segment as “sharing businesses.” Hundreds of sharing businesses have emerged during the last 10 years,2 with the most popular types enabling the sharing of cars and accommodation. However, many lesser-known platforms have allowed individuals to share other types of resources or to share resources in new ways. Many of these platforms have faced diverse challenges that resulted in them ceasing to operate.