Journal of Marketing Channels, 24:3–12, 2017
Copyright
C
Taylor & Francis Group, LLC
ISSN: 1046-669X print/1540-7039 online
DOI: 10.1080/1046669X.2017.1346973
Seismic Shifts in the Sharing Economy:
Shaking Up Marketing Channels and Supply
Chains
O. C. Ferrell and Linda Ferrell
Department of Marketing, Raymond J. Harbert College of Business, Auburn University,
Auburn, Alabama, USA
Kyle Huggins
Jack C. Massey College of Business, Belmont University, Nashville, Tennessee, USA
Our goal is to provide an overview of the sharing economy in the context of marketing
channels and supply chains. The use of peer-to-peer disruptive technology is challeng-
ing participation in traditional marketing channels. We provide grounded research that
explains this new business model and briey examines key issues that rms in this new
marketing channel face. Some of the issues include access versus ownership, the role of
independent contractors, and regulatory issues. We position the sharing economy as a
unique marketing channel and explain how it differs from traditional marketing channels.
Although we dene key terminology, other articles in this issue provide in-depth coverage
of the emerging issues.
Keywords: access economy, disruptive technology, gig economy, marketing
channels, sharing economy
The sharing economy has had a major impact on labor,
industry, and our distribution system. The term sharing
economy refers to an economic model that involves cre-
ating access to underutilized resources. Other popular
names include peer-to-peer or person-to-person economy
(sometimes abbreviated as P2P), collaborative consump-
tion, and piecemeal labor (Botsman, 2013; Economist
Staff, 2013; Singer, 2014).
The sharing economy is also associated with the gig
economy, a term referring to a job situation where indi-
viduals move from one project to another rather than
seeking permanent employment (Sundararajan, 2015).
The online gig economy is facilitated by digital con-
nections through application software (hereafter, apps).
These apps are developed specically for use on wireless
Address correspondence to O. C. Ferrell, PhD, Department of Mar-
keting, Raymond J. Harbert College of Business, Auburn University, 201
computing devices. The United States (U.S.) Department
of Commerce denes these rms as digital matching rms
in the sharing-economy space (Telles, 2016).
The exact denition of the sharing economy is
still being debated, but that terminology is the most
widely used. Participants in the gig economy are micro-
entrepreneurs or small-scale businesses with no more
than ve employees. It is estimated that 95% of small
businesses are micro-businesses (Clawson, 2015; Payton,
2014).
The sharing economy is changing the nature of the
concept of access, ownership, and employment. The eth-
ical, legal, and regulatory environment of the sharing
economy is in a developing stage with relationships that
create the need to minimize risks for all stakeholders. Our
main focus in this article is to examine how the sharing
economy is challenging traditional marketing channels
and supply chains.
4 O. C. FERRELL ET AL.
The belief that sharing systems are a sustainable and
potentially protable alternative to ownership is acceler-
ating rapidly (Belk, 2007;Weber2014). The sharing of
both services and access to physical products are built
on the foundation of disruptive technologies. According
to Danneels (2004), disruptive technology is best dened
as “technology that changes the bases of competition
by changing the performance metrics along which rms
compete” (p. 249).
Social media and apps that connect consumers and
businesses with instant information about the location
and availability of products provide platforms to over-
come temporal limitations and xed location barriers of
traditional distribution systems. Sharing systems are very
broad, ranging from accounting and medical services to
bicycle sharing to car sharing or ride sharing.
Uber, with its ride-sharing app, has been valued
at more than US$70 billion (Economist Staff, 2016;
Macmillan & Demos, 2015). General Motors has invested
US$500 million in Lyft ride sharing and provides rental
cars to Lyft drivers. This represents a strategic alliance
that offers discounted rates on rental cars to Lyft drivers
(Macmillan, 2016). Overall, Lyft is an asset-light rm
providing opportunities for rapid growth with a sharing-
economy business model.
The majority of people seem to view the sharing econ-
omy favorably. Approximately 72% of Americans have
used some type of shared or on-demand service, with ride-
sharing services among the highest at 15% (Smith, 2016).
About 71% of those who have shared an on-demand ser-
vice describe their experience as positive. About one-third
of sellers in the sharing economy make more than 40%
of their income from the sharing economy, signifying
that many are approaching the sharing economy from an
entrepreneurial perspective (Steinmetz, 2016). Approx-
imately 86% of those who participated in a sharing-
economy transaction believe that the sharing economy
makes life more affordable and 78% of consumers believe
that the sharing economy reduces waste. On the other
hand, relying upon independent contractors causes the
services offered to vary; approximately 72% believe the
sharing economy is not consistent (Steinmetz, 2016).
Denitively, the sharing economy involves commer-
cial sharing that is market managed to provide prod-
uct benets without ownership. Eckhardt and Bardhi
(2016) distinguish sharing as a part of the access econ-
omy and dene sharing as a nonmarket-mediated social
exchange. They position sharing as between friends and
family without monetary exchange. When there are mon-
etary exchanges, they dene it as the access economy.
Although this denition may be logical from an aca-
demic theory perspective, the sharing-economy terminol-
ogy is the classication the government, industry, and
mass media deploy in this new business model. Accord-
ingly, the Internal Revenue Service has issued tax rules
for independent contractors using the sharing-economy
denitions on their Sharing Economy Tax Center web-
site (Internal Revenue Service, 2017). On the other hand,
the U.S. Department of Commerce tries to narrow the
focus to digital-matching rms with companies such as
Craigslist: rms that facilitate this interaction without a
monetary transaction, such as Freecycle and Couchsurf-
ing, are viewed as outside the digital-matching rm de-
nition (Telles, 2016).
In the sharing economy, independent providers con-
nect with consumers through an agent acting as a facil-
itator in the exchange. Facilitation is often through
web-based platforms, such as apps, on Internet-enabled
devices. This is an area that has emerged quickly with lim-
ited academic research to explain this business model. In
addition, there is limited knowledge about consumer atti-
tudes and behaviors related to those who participate in
this sharing economy.
The sharing system has evolved based on lower costs,
transactional and exibility utility, and acquiring equiv-
alent product benets. Lamberton and Rose (2012)
conducted one of the rst marketing studies on this
new sharing business-model and concluded that “mar-
keters should begin by learning the specic cost and
utility factors that may affect propensity to participate in
commercial sharing systems” (p. 122).
A further goal in this article is to provide a framework
to examine the impact of the sharing economy on sup-
ply chains and marketing channels. We place the sharing
economy in the context of a marketing channel and com-
pare this emerging system of distribution with traditional
marketing channels.
The role of employment is at a stress point as inde-
pendent contractors are key members of the distribution
system. This has led to many legal challenges as to when
contractors are appropriately classied as independent
contractors versus being classied as employees.
In addition, the sharing economy is redening the con-
cept of ownership. The ownership concept and its transfer
is embedded in the roles of traditional marketing channel
members. In the sharing economy, consumers view access
as an accepted way to obtain resources that are tradition-
ally obtained through ownership.
We provide a systematic understanding and insights
that explain how the sharing economy ts into the tra-
ditional view of marketing channels and supply chains.
We provide a grounded perspective based on the integra-
tion of emerging academic research and examples that
explain the sharing-economy business model. Thus, this
article provides the building blocks for academic research
in this area.
We make six contributions in this overview and provide
a conceptual framework. First, we describe the nature of
marketing channels in the sharing economy. The nature
of connectivity and collaboration change is related to
SEISMIC SHIFTS IN THE SHARING ECONOMY 5
communication, ownership, labor, access, and assumed
risk.
Second, we examine the nature of access versus owner-
ship in a sharing-economy marketing channel. Third, we
analyze the role of independent contractors that facilitate
market access and carry out marketing channel functions
and activities.
Fourth, we describe some of the regulatory issues that
are emerging as a result of these new marketing chan-
nel structures. Regulation has always been important in
the management of marketing channels, but the sharing-
economy business model has created regulatory issues
that did not previously exist.
Fifth, we explain how marketing channels function in
the sharing economy and how they differ from traditional
marketing channels. Finally, we discuss how the sharing
economy changes the nature of marketing channels and
supply chains.
MARKETING CHANNELS IN THE CONTEXT OF
THE SHARING ECONOMY
Marketing channels and supply chain relationships are
among the most important strategic decisions made by
any rm. In fact, most companies rate supply chains as
one of the top considerations in developing a differential
advantage.
When thinking of supply chain management, we con-
sider marketing channels as the organized system of mar-
keting institutions. A marketing channel is dened as “a
group of individuals and organizations that direct the
ow of products from producers to customers within the
supply chain” (Pride & Ferrell, 2016, p. 412). Some mem-
bers of the marketing channel take ownership of the prod-
uct and are classied as merchants; other members of the
marketing channel receive a commission for facilitating
an exchange and are classied as agents.
At the heart of the supply chain is connectivity and col-
laboration (Ferrell et al., 2013) with information resources
and products owing from the point of production to the
nal user. Likewise, supply chains include the connection
and integration of all members of the marketing channel,
including a spider web of third-party participants that
create a seamless network of collaboration.
Today micro-entrepreneurs are entering the business
arena, short-circuiting traditional institutions and distri-
bution systems connected with traditional supply chains
and marketing channels. For example, although cosmet-
ics, nutritional supplements, or jewelry can go from tradi-
tional manufacturer to wholesaler to retailer to consumer,
a nonstore retailer can use independent contractors to
eliminate traditional wholesalers and retail stores. Direct
sellers use independent contractors with technology, such
as websites and web-app hybrids, but focus on product
ownership, not access. The sharing economy, in contrast,
focuses on access and services that utilize the resources of
others.
Direct selling has evolved with websites, online shop-
ping carts, social networks, and e-mail as well as
other electronic communication associated with disrup-
tive technology. Some direct sellers have evolved with web-
sites or apps that consumers can use to reorder after
establishing personal relationships, but continue to com-
municate, often by social media. Direct sellers can build
their own business by seeking and training more people
to sell products. This is a feature not found in the shar-
ing economy. Direct selling is not a part of the “digital-
matching” rms that are the primary participants in the
sharing economy. Therefore, the sharing-economy rms
and direct selling use different marketing channels.
Companies involved in the sharing economy act as
avenues (“labor brokers”) that connect people in need of
certain services with sellers of those services. As such, sell-
ers are considered independent contractors rather than
employees because they own the resources offered (e.g.,
car for Uber, lodging for Airbnb) and have the ability to
work as much or as little as they desire. Table 1 provides
some examples and a brief description of some of the
companies involved in the sharing economy.
Almost all aspects of the service economy are being
affected by disruptive technology, such as apps and web-
sites. It is also affecting other industries as well, as the
purchase of groceries and the sharing of products such as
automobiles, houses, boats, bicycles, and tools can secure
extra income for the owner. As such, the sharing economy
creates a marketing channel that connects an owner and
user through technology and is facilitated by a product or
labor broker. Even services such as medical services are
moving toward the use of digital-matching apps. In other
words, in comparing the sharing economy to traditional
TABLE 1
Examples of Companies in the Sharing Economy
Company URL Description
Airbnb https://www.airbnb.com Lodging
Caviar https://www.trycaviar.com/ Food delivery from
restaurants
DogVacay https://dogvacay.com/ Dog sitting
Dose https://www.dosehealthcare.com At home physician
visits
Instacart https://www.instacart.com/ Grocery delivery
Lyft https://www.lyft.com/ Ride sharing
Sailo https://www.sailo.com/ Boat sharing
Spinlister https://www.spinlister.com/ Bike sharing
StyleBee https://www.stylebee.com/ Beauty experts on
demand
TaskRabbit https://www.taskrabbit.com/ Chore marketplace
Uber https://www.uber.com/ Ride sharing
Zirx https://www.zirx.com/ Valet parking on
demand
6 O. C. FERRELL ET AL.
marketing channels, an agent or broker quickly connects
those that possess a resource, such as a car or a room, with
those that need it. These disruptive technology dynamics
are usually self-sustaining and act as a catalyst to spark
even more change (Pride & Ferrell, 2017), often challeng-
ing social institutions, business models, and the legal and
regulatory system.
There has been limited research related to the sharing
economy. An agent or broker often facilitates the relation-
ships in the sharing economy that comprise a P2P phe-
nomenon involving nonownership but access that enables
consumers to obtain benets. It has been characterized
as a self-service exchange with extensive cocreation and a
balanced market-mediated exchange involving short-term
intermittent transactions driven by the desire for com-
munity and inspired by cooperation and collaboration
(Philip et al., 2015).
Consumer research has not discovered how these social
economic relationships are created, shaped, or sustained.
At this stage, most research has been conceptual, descrip-
tive, and not causal, but Harding and Schenkel (2017)
have conducted research to demonstrate how attitudes
toward ride sharing and car ownership differ. This type
of research is necessary to understand consumer behav-
ior in the sharing economy.
It is hypothesized that relationships are sustained
through consumer–producer engagements in collabora-
tive consumption and production and the creation of
zones of indeterminacy (Scaraboto, 2015). Although
some believe that this is outside the realm of traditional
market economies, this belief is being challenged by the
size of companies: Airbnb is reported to have 10 million
bookings and more than 50,000 renters each night (Price-
waterhouseCoopers LLP, 2015).
Because of the direct interface between product or
service providers and consumers, some safeguards are
needed because there are risks associated with the con-
sumer and service provider interface and access. This is
because buyer–seller engagements are collaborative and
there is a zone of interdependency that will break down
unless value is being provided. The interdependency of
the company and the independent contractor is difcult to
discriminate, thereby creating potentially more risk than
exchanges with a xed location and a known provider. It
is believed that this indeterminacy should create risks of
scarcity, predictability, control, and trust issues related to
product quality (Lamberton & Rose, 2012).
Although theoretically viable, some of these risks
related to product scarcity do not have signicant effect
on the likelihood of consumers participating in sharing
systems. Scarcity risk refers to “the likelihood that a prod-
uct or product-related resource will be unavailable when
a consumer desires access” (Lamberton & Rose, 2012,p.
110). However, Habibi et al. (2016) show both qualita-
tively and quantitatively that product scarcity was not a
driver of the likelihood of consumers to participate in the
sharing economy. They believe this effect to be tied to the
notion that scarcity risks are not practical concerns of
participants in the sharing economy because of the over-
whelming level of supply verses demand.
Until the demand within the sharing economy
increases signicantly to catch up to the oversupply
of sharing opportunities, product scarcity will not be a
valid risk concern. We suggest that additional risks related
to the lack of training that many sharing-economy com-
panies require of their service providers, as well as the
potential for insurance liability related to damage to per-
sonal products provided (e.g., automobile, bikes, boats,
home, tools, etc.), are much more viable and immediate
risk concerns for participants in the sharing economy.
THE CHANGING NATURE OF OWNERSHIP IN THE
SHARING ECONOMY
The concept of ownership is evolving as consumers shift
from needing to possess objects to focusing on obtaining
benets from objects. Ownership, access, and sharing are
becoming major research topics in a number of elds and
contexts. In the sharing economy, cocreation and collab-
orative consumption create new questions about hybrid
variance that combine the logics of sharing and tradi-
tional market exchange (Price & Belk, 2016). Sharing has
been integrated into traditional marketplace exchanges,
with information technology helping to accelerate the
market exchange transaction.
In terms of ride sharing, the Pew Research Center
found that those consumers who frequently use ride-
sharing services are less likely to own a car than their con-
temporaries. Smith (2016) reports that most ride sharing
occurs among younger consumers between the ages of 18
to 29 (28%) and 30 to 49 (19%). Young adults are buy-
ing fewer cars using online meet-ups and are experienc-
ing changing cultural values focused on experience rather
than materialism (Badger, 2014).
As Millennials plunge into the sharing economy, they
seem less interested in ownership than previous genera-
tions (Badger, 2014;Dykstra,2012; Shirouzu, 2016)and
more intent on sharing: sharing occurs to obtain the use
of resources that one does not own. Research suggests
that consumer purchase behavior is changing with the
ability to monetize underutilized resources (Pricewater-
houseCoopers LLP, 2015). For example, most people only
use their car for a small amount of time—10% or less.
Therefore, the car is available to be used by others. Pos-
sessing and protecting is not as important as turning own-
ership into an economically viable activity.
In general, if there are multiple users of a resource,
sharing activities are occurring. Traditionally shopping
and purchasing are inventory behaviors that are distinct
SEISMIC SHIFTS IN THE SHARING ECONOMY 7
from, and usually prior to, consumption of products.
Now that distributed inventory is often accessed digitally,
this is changing individual ownership norms of exclusive
use (Rudmin, 2016). Changing attitudes toward own-
ership could impact our economy in various ways. For
example, if the nature of competition (e.g., Airbnb versus
Marriott) and the need for product ownership (e.g., Uber
versus Toyota) changes, then competitive boundaries
expand.
According to Belk (2014) “you are what you can
access” (p. 1595). Although sharing may be as old as civ-
ilization, current technology has opened the door to cre-
ating a lifestyle and standard of living without actual
ownership of products. The two commonalities in this
new approach to ownership are temporary access through
nonownership models and using digital technologies to
make this happen (Belk, 2014).
Few industries are exempt from their products being
utilized or shared by this new disruptive technology. If
ownership as we know it today continues to change at cur-
rent rates, there could be major economic ramications.
Fewer products are needed when one can pay a fee and
have access to cars, clothing, lodging, or tools. It may no
longer be necessary to go to a xed-location retail estab-
lishment for many traditional services such as hairstyling,
medical services, or meals (e.g., UberEATS delivers meals
directly from restaurants to the customer).
The concept of ownership starts to lose its meaning
when most physical products and services can be accessed
just in time, when they are needed. Additionally, over time
the psychological enjoyment and rewards from ownership
could diminish within our culture. Most of our laws and
regulations historically developed around property rights
and ownership. Private property has long been viewed
as a key asset in developing income, wealth, and nan-
cial independence. But, the sharing economy now allows
access to products the user cannot afford to own (Thorne
& Quinn, 2017).
THE ROLE OF INDEPENDENT CONTRACTORS IN
THE SHARING-ECONOMY MARKETING CHANNEL
Workers without employers who have exible agreements
as independent contractors or consultants characterize
the sharing economy. In 2015, 34% of the American work-
force was a freelance or independent contractor (some-
times called 1099 workers because of the number of the
highlights that they are not traditional employees who
receive W2 forms). This number is expected to rise by
40% in 2020 (Argrawal, 2016). These independent con-
tractors complete a task, usually in a dened period
of time, and have various levels of commitment to the
organization (Friedman, 2014). Often these independent
contractors are young, well-educated, and use advanced
technology.
Although this new group of entrepreneurs is embraced
by businesses because the businesses avoid having to pay
benets, taxes, and lawsuits related to employee disputes
(such as dismissals), the U.S. Bureau of Labor Statis-
tics and the Census Bureau do not collect appropriate
data for analysis of independent contractors at this time
(Friedman, 2014). However, the U.S. Internal Revenue
Service (IRS) has developed a Sharing Economy Tax Cen-
ter that appears to be directed at the digital-matching sec-
tor of the economy.
The IRS common law rules to be an independent con-
tractor includes three main aspects (Internal Revenue
Service, 2017). They are behavioral (Does the company
control or have the right to control what the worker does
and how the worker does his or her job?), nancial (Are
the business aspects of the worker’s job—including how
the worker is paid, expense reimbursement policies, pro-
vision of tools and supplies, and so on—controlled by the
payer?), and type of relationship (Are there written con-
tracts or employee type benets such as pension, insur-
ance, vacation pay, and so on?). These IRS rules relate to
the degree of control and independence.
Despite these rules being provided to identify the
independent-contractor relationship, there continue to be
legal requirements. This situation leads to perhaps one
of the greatest legal challenges to the sharing economy:
the status of independent-contractor relationships. Local,
national, and international law may determine the status
of an independent contractor differently. But in general,
an independent contractor should have authoritative con-
trol to do the work the way he or she desires to do it, free
from supervision and control. They need to be able to set
their own schedules, provide their own supplies, pay their
own business expenses, and only get paid for work per-
formed. Generally, there should be a contract that states
the relationship that exists, the terms of service, and the
specic deliverables (Opkins, 2010).
Because independent contractors own their own busi-
nesses and contract their time and resources as they see
t, they are responsible for paying payroll taxes, busi-
ness expenses, and healthcare. Between 2010 and 2014,
independent contracting grew by 2.1 million (Rinehart &
Gitis,
2015). This increase in micro-entrepreneurship is a
challenge to the structure of traditional marketing chan-
nels and supply chains because the independent contrac-
tors may access their clients in a manner different from
the structure of traditional marketing channels.
Facilitators in the sharing economy may hold certain
controls over the services that they assist in providing,
including rates for the services. According to lawsuits
led against Uber alleging that drivers were misclassied
as independent contractors, Uber maintains control over
8 O. C. FERRELL ET AL.
fares, can deactivate driver accounts, can charge cancel-
lation fees to drivers who choose not to take a ride, and
can prohibit them from picking up passengers that are
not using the app. For these reasons, a judge in southern
California ruled that a driver suing the company was
actually an employee and was eligible for reimburse-
ment for business expenses (Huet, 2015; Levine, 2015;
Somerville, 2015). The ruling has signicant implications
for the sharing economy.
Although some businesses such as Instacart might
be successful in transitioning to an employment basis
(O’Brien, 2015), the success of the sharing economy
depends on micro-entrepreneurs operating their own
resources to provide a service. Uber and Airbnb would
not be successful on such a wide scale if they had to pay
salaries to all the independent contractors selling services
worldwide. In the case of Airbnb, employment would go
directly against its mission of “sharing” and developing
real human connections and experiences between buyer
and seller.
If lawsuits continue to classify independent contrac-
tors in the sharing economy as employees, it is likely that
companies such as Uber might have to give up some con-
trol to their independent contractors and allow them to
run their operations as they see t. It is interesting to note
that the personal transportation industry was not built
around employees even before Uber: the vast majority of
taxi drivers operate as independent contractors.
RESOLVING REGULATORY ISSUES IN THE
SHARING ECONOMY
In addition to employment status, the sharing economy
has also frequently faced other regulatory issues. Cohen
and Kietzmann (2014) use agency theory to dene the
government as the principals and the service providers
as the agents. From this perspective, there are signi-
cant conicts in the principal–agency relationship. For
instance, drivers of certain Uber services do not have to
be licensed like taxi drivers. Many governments view this
as a safety concern. This has caused considerable debate
both within the U.S. and in other countries. Many U.S.
cities have tried to block Uber from operating and bans
have been instituted on certain Uber services in France,
Germany, India, and Spain (Khosla, 2015).
Other stakeholders are turning toward the government
because of what they view as unfair competition. Taxicab
services, for instance, argue that Uber has an unfair
competitive advantage because its drivers are not held to
the same restrictions as taxi drivers. Even those who like
the sharing economy believe that some companies are
exploiting loopholes in regulations. In one survey, 58%
of those who offer services believed that the industry
was exploiting loopholes in regulation (Steinmetz, 2016).
Gollnhofer et al. (2016) theorize that these issues of
fairness have emerged because unlike traditional market
exchanges, there are no clear rules of reciprocity that
guide this “redistribution of goods” (p. 226) through the
sharing model.
On the other hand, Airbnb has a friendlier relationship
with regulators. It worked feverishly in lobbying against
Proposition F in San Francisco that would have imposed
limitations on Airbnb hosts who wanted to rent out their
lodgings. It does seem to be more willing to make com-
promises, however. Airbnb pays hotel taxes to the cities
where it operates and the CEO recently announced that
in places with housing shortages it would not use hosts
who owned multiple apartments wanting to turn them
into short-term rentals. Cities appear to be more open to
sharing-economy rms that appear more willing to com-
promise (Chafkin, 2016).
HOW MARKETING CHANNELS FUNCTION IN THE
SHARING ECONOMY
Marketing channels for the sharing economy consist of
a direct-to-consumer connection with an agent or labor
broker that receives a commission for facilitating the
direct connection. Many of the traditional channel strate-
gies may be challenged by this channel relationship. For
instance, Uber has moved personal transportation from a
branded, selective distribution situation into intensive dis-
tribution. In addition, UberBLACK limousine service is
a form of exclusive distribution above and beyond Uber’s
regular transportation options.
Many traditional channel concepts that apply to mar-
keting such as vertical channel integration (involving
combining two or more stages in the channel under one
management) are not as useful because of the direct con-
nection facilitated between the buyer and seller. Physical
distribution, order processing, inventory management,
and materials handling become less of a concern because
of the direct buyer–seller relationship. Transportation
can be associated with cocreation in that the buyer and
seller have to make direct contact and may be responsible
for traditional inventory management and movement of
products to buyers.
Services provided through the sharing economy dif-
fer from those provided by traditional service providers.
Traditional service providers often have retail facilities
and are providing service at an arms-length, meaning that
there is limited contact between customer and service
provider. For example, service products such as airline ser-
vices, banks, hair salons, and health care providers have a
formal retail distribution system usually associated with
at least some xed location facility.
SEISMIC SHIFTS IN THE SHARING ECONOMY 9
FIGURE 1 Traditional versus sharing-economy marketing channels.
In comparison, the sharing economy has a shorter
distribution channel by eliminating a xed location. For
instance, some services emerging provide physician visits,
hair styling, and chores performed at the consumer’s
home all through the sharing economy. Most of these
transactions are facilitated through technology that
allows the service provider to connect directly to the
consumer without a xed location or intermediary that
negotiates the transaction.
There are many variations of traditional marketing
channel relationships. In Figure 1, a traditional market-
ing channel is shown, including producers, wholesalers,
retailers, and consumers. There can be many variations
of this type of channel—it could use a marketing channel
that goes straight from producer to consumer or through
various types of agents and brokers.
What is different about a marketing channel in the
sharing economy is that the main relationship between
buyer and seller is often facilitated through an app pro-
vided by an agent or labor broker. The buyer has the
same type of relationship with the agent or broker as
does the owner or originator. The owner or originator and
the buyer complete a digitally facilitated exchange. The
agent does not have traditional channel functions other
than facilitating this transaction and providing risk reduc-
tion controls to hopefully create safety and integrity in
the exchange. Finally, the owner / originator and the con-
sumer engage in various forms of cocreation to nalize
the exchange relationship.
DISCUSSION
The sharing economy has created seismic shifts in market-
ing channels and supply chains. Although most marketing
channel concepts can be applied to the sharing economy,
the nature of distribution in the sharing economy shakes
the foundation of traditional marketing channels. The
sharing-economy marketing channel is more of a direct
channel from the owner or originator to the customer.
Facilitated by an agent, traditional marketing interme-
diaries are usually not present. This direct go-to-market
strategy uses a cocreation model in providing activities
and functions to create benets. This results in a very ef-
cient marketing channel that reduces costs and increases
actual value and perceptions of value.
Members of the sharing-economy marketing channel
occupy a well-dened role based on cooperation: most
conict is not among internal channel members, but
rather with other business models and the legal and reg-
ulatory communities. For example, Uber addresses con-
icts with traditional taxi companies that try to prevent
its operations through local regulatory communities.
Another channel feature of the sharing economy is
channel leadership. Most of the sharing economy is
organized and controlled by a single leader. Although
participants are independent contractors, they do not
establish channel policies and the agent-facilitator, such
as Airbnb or TaskRabbit, provide the strategy and
resources to inuence participants’ success. The agent
10 O. C. FERRELL ET AL.
provides communication and oversight to create efcient
exchanges.
Part of the efciency of the sharing economy relates to
cocreating various systems and activities related to sup-
ply chain management. Information technology allows
for distribution functions to be more efciently performed
under a unied management of leader-facilitators. This
reduces costs and positions the sharing-economy business
model with a competitive advantage.
Sharing-economy companies can facilitate distribu-
tion, providing services that do not require additional
resources for retailers. For example, Walmart has part-
nered with Lyft and Uber to provide grocery delivery ser-
vice in selected markets. High-end, high-service retailers,
such as Hugo Boss, have also partnered with Uber to
expedite clothing delivery.
The concept of inventory management also changes in
the sharing economy. For example, Airbnb has a greater
inventory of rooms (about three million) every day than
Hilton Worldwide (about 739,000).
1
But, this inven-
tory, if not occupied, will cost Airbnb almost nothing,
although at Hilton an unoccupied room has costs that
negatively impact chain revenue.
Physical handling and warehousing operations are not
signicant in the app-based, digital-matching rms. But,
in direct selling based on ownership, even when supported
by shopping carts, web-based technology, social media,
and apps, a channel design with operations for storing and
moving products in centralized locations is necessary.
The sharing-economy business model is asset-light.
The cost of expanding is lower for a startup because the
independent contractors own most of the assets needed
to provide access to products. Finally, these independent
contractors can work as much as or little as they like
(Economist Staff, 2016).
Although there are many regulatory issues in channel
management, the regulatory issues in the sharing econ-
omy are very different from issues faced in the traditional
marketing channel. Issues such as dual distribution,
restricted sales territories, tying agreements, exclusive
dealings, and refusal to deal are much less important or
nonexistent. However, dening the status of an indepen-
dent contractor, tax reporting, insurance responsibility,
licensing, and the management of risks become more
important.
The management of ethical risks is also important
but different in the sharing-economy channels. Most
independent-contractor participants get little or no
mandated training to deal with ethical risks. This is
because there is a desire not to exert too much control
1
For the number of Hilton Worldwide hotel rooms from 2009 to
2016, see https://www.statista.com/statistics/247301/number-of-hilton-
worldwide-hotel-rooms/; Airbnb claims 3 million listings worldwide at
https://www.airbnb.com/about/about-us, including castles.
and jeopardize the independent-contractor work status.
Often in the sharing economy there is only a background
check and possibly a review of contractor equipment or
facility. It appears that most sharing-economy companies
such as Lyft and Uber are large companies but have not
established ethical values, cultures, and codes of ethics to
deal with ethical risks (Gonzalez-Padron, 2017).
CONCLUSIONS AND FUTURE RESEARCH
In this article we examine the impact of the sharing econ-
omy and provide a framework for how the sharing econ-
omy ts into the traditional view of marketing channels
and supply chains. This is critically important for market-
ing research as the role of employment in these systems is
at a stress point. We propose that independent contrac-
tors, acting as micro-entrepreneurs, are key members in
driving the recovery of these distribution systems and the
economy as a whole.
However, the sharing economy is redening the con-
cept of ownership and has created many legal challenges
as to when independent contractors is appropriate versus
classication as employees. Hence, we provide a grounded
perspective based on the integration of emerging aca-
demic research and examples that explain the sharing-
economy business model.
Additionally, we provide the building blocks for aca-
demic research in this area as we highlight several contri-
butions to this eld of research. First, we described the
nature of both marketing channels and ownership within
the context of the sharing economy. Next, we analyzed the
role of independent contractors that facilitate this market
exchange, carrying out marketing channel functions and
activities. Then we described some of the regulatory issues
that are emerging as a result of these new marketing chan-
nel structures. Finally, we explain how sharing-economy
marketing channels function and differ from traditional
marketing channels while changing the overall nature of
marketing channels and supply chains.
There are many creative opportunities for research to
better understand how the sharing economy is impacting
marketing. As it relates to consumer behavior, research
that longitudinally explores the effect of product scarcity
(Habibi et al., 2016) as demand for the sharing economy
increases could increase concerns about this risk. Fur-
ther exploration of the demand and product scarcity links
for the sharing economy across various geographic and
demographic spectrums may begin to shed some light on
this hypothesized effect.
Ownership of submitted digital content to the sharing
economy is of particular interest, for example TaskRab-
bit. Ideas submitted to this chore marketplace in terms
of increasing efciency and effectiveness are valuable
strategies that are now fragmentally shared between
SEISMIC SHIFTS IN THE SHARING ECONOMY 11
individual consumers and corporations (Molesworth et
al., 2016). Questions arise about who has the authority
to share this content at will. Specically, in this arena
there is an interplay between actor network theory and
political economy theory describing the technology and
the user-generated content paired with the governance
and business models needed to monetize the digital plat-
form (Van Dijck, 2013). Consumer research regarding
the perceptions of these monetization strategies is greatly
needed in this particular domain of the sharing economy.
Finally, regarding the marketing domain of strategy,
there is no academic research dealing with the challenges
that the sharing economy presents to traditional mar-
keting channels. Research opportunities in this domain
include organizational behavior, varying rm strategies,
transitional marketing channel activities and functions,
regulatory community issues and responses, ethical issues
and risks, and the economic impact of the sharing econ-
omy on communities as well as societal benets and
drivers of this transition. Across these areas of market-
ing research our discipline has the opportunity to be at the
forefront of research in these important areas and provide
leadership in understanding the sharing economy.
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