THE its contribution to sharing economy and a

THE SHARING ECONOMY AND TAXI SERVICESThe sharing economy is a new industry which has shown itself to be growing at a fast rate. The business’ main premise is to connect people with each other in order to exchange goods or services, especially through online platforms. This economic model covers a wide spectrum of markets. For instance, companies like Turo and Uber focus on providing people with an affordable taxi service and at the same time they provide people with the opportunity to use their cars. Another example of the many areas that the sharing economy covers is eBay. It is a platform that focuses on allowing people to sell their goods, which may be new or used, directly to other people. The sharing economy is very popular with most people as it usually provides a similar experience as traditional businesses, but at a lower cost. The sharing economy can only succeed when a digital platform connects people (Bellafante, 2018). These people can either be buyers or buyers and sellers. When buyers of a service are connected, they understand their turn of using an asset based on their interactions on the digital platform that the seller uses to connect his clients. Companies build digital platforms that they use to sell their goods and services based on their projections of demand and supply. In this case, the platforms that these companies build should have the capacity to accommodate data for the customers that the company anticipates to be the potential buyers of the good or service (Botsman, 2018). Interestingly, companies can build digital platforms and sell them to other firms that have the service that is traded on the platform. This paper will be focusing on a US firm, Turo Inc., as a digital platform that connects customers, and gives attention to the description and analysis of the platform, opinions regarding its contribution to sharing economy and a possible research question regarding the platform. Analytical description of Turo Inc.,Shelby Clark is the Founder of Turo Inc., and Andre Haddad is the platform’s CEO. Turo Inc. is a car sharing platform that allows private people to list their cars (Konrad, 2015). These cars are then availed for renting by other people at the spot where the car is last left. Those renting the cars usually do it for a short while. Turo Inc. has a large market, including the US, Canada, and the UK. It covers about 2,500 cities across these countries. Turo was founded in 2009, and its original name was “RelayRides” by Clark, Al-Kady and Reeves, who were inspired by the already existing car-sharing services such as Airbnb and eBay (Konrad, 2015). Between 2010 and 2014 RelayRides had already received 3$ million from General Motors, as observed by (Botsman, 2014). However, in November of 2015, it was rebranded as “Turo.” Today, Turo provides car rental by the day, unlike in the past when it rented cars on hourly basis (Konrad, 2015). Many customers that rent cars from this online platform intend to move for short distances such as to the airport or to make deliveries to their homes. The charges for the cars are based on the distance covered and time that the client spends with the car.As for any business, demand and supply are important matters that need to be monitored and processed. In the case of Turo, the supply entirely depends on the People living in an area since they are the ones supplying the cars. However, when the demand exceeds supply, there is nothing that Turo can do about it. Turo’s interaction with its customers is mainly digital and when people want to reserve or drive a car from Turo, they simply use the web page or the app (Castillo-Manzano and Sanchez-Braza, 2010). Besides, the app is used to unlock the car and the engine, which then allows the user to drive, as explained by (Morrison, 2011). Both the car owners and users have to register with Turo for them to access the car-sharing services. The car users sign up on the Turo platform using Google, Facebook or email address. When the users intend to rent a car, they enter their travel dates on Turo’s platform and search for the variety of available cars (Lawler, 2014). According to Morrison (2011), one can book a car to use it within eight hours or make the instant booking. When the booking is accepted, the customer meets the car owner, shows his documents and takes the car before returning to the owner at a specific point. Car owners list their cars with Turo using their car details and its pictures. The owners are notified when their car is booked and they can either accept the booking or cancel it (Konrad, 2015). These activities are indications of what happens in a shared economy where the sellers and buyers a linked through a digital platform. Turo Inc. contributes to the sharing economy in the United States by creating competition between car-sharing ventures and the traditional taxi businesses. This competition emanates from the fact that this car sharing model provides a cheaper alternative for people that need transportation (Malhotra & Van Alstyne, 2014). It allows those without cars to rent a car and drive it to the desired destination and avoid paying more for the taxi. In this digital era, businesses like Turo and Uber pose a threat to conventional taxi businesses, because they provide the same service, or a close alternative, at a lower cost. As a result, the taxi companies lose their market power and market shares (Arun, 2013). Additionally, businesses like Turo and Uber contribute to the sharing economy by developing the digital infrastructure for other smaller car-sharing services. This development ranges from purely technical advancements to improvements in the consumers understanding and view of car sharing (Owyang and Silva, 2013). The main idea behind car sharing services like Turo is to give people the opportunity to get from one point to another even if they do not own a car themselves. In addition, the founder of Turo was inspired to create the company because he had noticed that most on the street were not being used regularly. By connecting people with cars with those without cars, the platform has managed to trigger the use of cars even the ones that were about to be written-off. The connection between car owners and those renting cars contributes to the sharing economy in that people that are far apart can come together and use assets (cars) for satisfaction of their needs. One can infer that the transactions that take place between customers and car owners are peer-to-peer. This description anchors on the fact that those undertaking the transactions become peers because they are equals within the digital platform that Turo provides. By having an intermediary between buyers and sellers of car-selling services, one can infer that the transactions that Turo facilitate contribute to the sharing economy where both buyers and sellers come to meet each other through a platform provided by an intermediary (Schor, 2013). In this case, Turo is the intermediary that facilitates the meeting between car owners and those renting car services. If transactions between the buyers and sellers of this service fail, they can blame the intermediary. Thus, Turo makes a significant contribution to the sharing economy by enabling demand to meet supply.  Turo has had a lot of success since its inception in 2009. Various measures of success in business have put the firm as one of the growing start-ups in the US within a few years of its entry into the market. The firm has expanded from only operating in Boston, to operating in over 2,500 cities across the US, UK and Canada. Also, the success of Turo could be measured by the funding it has received from many large venture capital firms. It has received 52.5$ million since 2010 from companies like August Capital, Google Ventures and Canaan Partners (Lawler, 2015). These are clear indicators of success for a startup that has only been around for less than a decade. The fact that venture capital firms are willing to invest in Turo is an indication of the firm’s success and potential. These firms rarely support the companies that are showing signs of failing and as such, their support for Turo is an indication that the firm is on the right path (Lawler, 2015). Global expansion is only undertaken by companies that have succeeded in their homes markets. As such, by expanding to UK and Canada, Turo can be said to have conquered the home market in the US. In this case, success is defined based on the global expansion initiatives and trust by venture capital institutions.Diversification is another measure of success that one can use to rate the success of Turo. After managing to compete with other firms in car renting venture, Turo seems to be diversifying to other business niches. For instance, the firm is reported to be promoting classic cars to the potential car owners (Konrad, 2015). By engaging in promotion activities, the firm can be said to think ahead and as such, it has succeeded in identifying gaps in the market. Turo has managed to get clients to promote their cars within few years of entry into the promotion segment of the market. The ease of getting clients in this competitive segment is an indication of success of the firm. However, one can opine that Turo is diversifying to avoid the losses that may come with the stiff competition from other market leaders in car sharing businesses such as Uber. Whether this opinion can be proven is a matter of conjecture. Interestingly, the fact that Turo is a market leader in this business makes it a market influencer that can make its competitors either fail or succeed. Opinion about Turo Inc.      The sharing economy has become large and rapidly growing part of economies and companies like Uber and Turo have been making an impact on it with their concepts and realization of their concepts. Turo has created a model that future startups with similar ideas can use as a guideline, and that is a huge contribution as most startups are very vulnerable in their first years. Also, it has given a wide range of consumers the means to drive to their destinations without owning a car themselves. It has also contributed to people in general as it is a close substitute for taxis, therefore increasing competition and hence lowered taxi prices. The purpose of the sharing economy is to connect buyers and sellers and allow them to transact at their convenient prices (Van Alstyne, Parker & Choudary, 2016). The sharing economy model should lower prices that buyers pay to access services. Turo Inc. has managed to meet these requirements and as such, one can say it has contributed significantly to the growth of the sharing economy. The fact that car owners and their clients can conveniently transact through the Turo platform is an indication that the firm has contributed to the advancement of the sharing economy.  However in 2013 Turo was under attack from the state of New York. The firm had issued a consumer alert and a cease-and-desist due to a misrepresentation of what the insurance would cover. This alert was misleading to customers and car-owners. In addition to this Turo, had to pay a fine of 200,000$ for false advertising and unlicensed insurance activity among other smaller charges. To this date, New York is the only US state where Turo is not present. Whether or not the state of New York was doing the right thing is not clear. However, it seems strange that all other US states did not have a problem with RelayRides insurance policies or advertisements. Besides, Turo was able to expand into Canada and the United Kingdom without facing these problems. Perhaps the laws in New York are more strict with insurance policy matters than other states or countries. This year, Turo was sued for violating the San Francisco Airport permit where it tried to park its cars at the airport for more hours than allowed in the permit (Zaleski, 2018). The case is in progress and the lawsuit claims that the firm in engaging in unfair business practices by obtaining an unfair advantage over its competitors and who use the airport as a destination. Possible research question For a very long time, the taxi industry was uncontested and the taxi services could act like monopolies. According to Castillo-Manzano and Sanchez-Braza (2010), taxi fares can be quite unpredictable and be far higher than what the consumer may expect. As a result, people have become attracted to car sharing services because they charge lower fares than taxis. As such, car sharing services have eaten into the market share of taxis. Therefore, an interesting research question could be: “To what extent have car sharing platforms like Turo reduced the market share and market power of traditional Taxi services?”. Another question could be: How has Turo contributed to the growth of the sharing economy in the US? In formulating the hypothesis, the researcher will need to consider the research questions and make a claim that seems to support the focus of the research question. As such, the hypothesis will be: Turo and other car-sharing platforms have boosted the sharing economy and reduced the market share of traditional taxis. ReferencesArun, S. (2013). From Zipcar to the Sharing Economy.  . Harvard Business Review.Bellafante, G. (2018). What the Sharing Economy Really Delivers: Entitlement. New York Times. Retrieved 28, Jan, 2018 from:, R. (2014, October 10). Sharing’s Not Just for Start-Ups. Retrieved January 25, 2018, from, J., Sanchez-Braza, A. (2010, June).An Evaluation of the Establishment of a Taxi Flat Rate from City to Airport. Sage, Retrieved January 27, 2018, from, A. (2015). With $47 Million and A New Name, Car-Sharing Startup RelayRides Seeks Rebirth. Forbes. Retrieved Jan, 28, 2018, from:, R. (2014, August 12). RelayRides Adds $10 Million From Trinity And Looks To Expand Peer-To-Peer Airport Rentals. Retrieved January 26, 2018, from, A., & Van Alstyne, M. (2014). The dark side of the sharing economy… and how to lighten it. Communications of the ACM, 57(11), 24-27.Morrison, M (2011, Semptember 17). Living for the city: What’urban boom’means for marketers.Retrieved January 28, 2018, from, J., Tran, C., & Silva, C. (2013). The collaborative economy. Altimeter, United States. Retrieved January 27, 2018, from, J, (2014), Debating the sharing economy. Retrieved 28, Jan, 2018, from: Alstyne, M. W., Parker, G. G., & Choudary, S. P. (2016). Pipelines, platforms, and the new rules of strategy. Harvard Business Review, 94(4), 54-62.Zaleski, O. (2018). San Francisco Sues Daimler-Backed Rental-Car Upstart Turo. Bloomberg. Retrieved 28, Jan, 2018 from:


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