Introduction

Sharing Economy is a term for a way of distributing goods and

services, a way that differs from the traditional model of
corporations hiring employees and selling products to
consumers.

How does the sharing economy work?

It is a form of collaborative consumption facilitated through
digital platforms that enable ordinary people to participate in
peer-to-peer transactions of under-utilized assets, resources,
time and skills.

Why is sharing economy important?

The sharing economy allows many people to make extra money
which for some of could be a lifeline. As a result, it increases
the supply of goods and services, which makes them more
affordable, and will result in downward pressure on the cost of
living and inflation.
Challenges of Sharing Economy
SWOT Analysis of Shared
Economy
Opportunitie
Strengths Weakness Threats
s
• Addresses • Sharing • Potential • Trust and
the Local Economy Brand Safety
Economy in may never Partnership record is
ways larger resonate s/Sponsors. unblemishe
Internet outside of • Large d.
Companies densely Segments • Any major
could not. populated of accidents
• Sharing cities. Population or crime
Economy • Conversion not yet on- could ruin
Connects hampered board. that.
users to by tedious
their back and
community forth
. communica
tion.
So Let’s Talk about
Governance of
Platforms !
The governance of the sharing economy is
defined as collaborative governance because
platform users are expecting to participate in the
decision making process and in the governance of
the platform and to collaborate with the platform
owner.
Platform Governance
Approaches
 As internet users have moved from being passive
consumers of information to interactive participants
and “prosumers” of digital information. They have
begun to actively contribute to website content, both
providing and sharing information choices by
providing their opinions, usually in form or ratings
and reviews.

 Through social media and websites, they increasingly

rate and review products, experiences and brands,
thereby responding to people's need for clarification,
verification and for transparent and reliable decision-
making information.
 Platform Governance
Approaches
 Indeed, forms of accountability have been recently
identified within virtual communities and online
marketplaces, where user generated reviews and
ratings are reshaping the role of accountability and
engendering trust among users.
 From being accountable to a small number of guests
and inspectors, hotels have become accountable to
“the crowd” via the TripAdvisor ranking (TripAdvisor
Popularity Index), thereby reconfiguring traditional
accountability relationships investigates the role of the
online reviewer in electronic commerce.
 Amazon is an online marketplace where customers
review and rate the quality of the products to support
the buying decisions of other users and, at the same
time, can use reviews and ratings to make their
purchase choices depending upon users' reviews and
ratings to build trust and reputation within the
marketplace.
 Roles of accounting and management
control in the governance of sharing
economy
 The role of accounting in platform governance of
the sharing economy is analyzed by investigating
how accounting and control practices are
employed by the platform owner and the
platform users (Airbnb hosts) as a mechanism for
platform governance.

 The governance and control of platform

organization depends upon how the users
perform their activities on the platform thereby
requiring the platform owner to be able to
coordinate and control such activities.

 The Platform owner commonly uses formal

bureaucratic control systems as mechanisms to
govern and control its users. Through users
compliance, their activities are made visible to
the platform owner, which in turn maintains
control over the value creation process.
Governance of Shared Economy
Who What

• Platform Owner • Access to platform

• Verification of hosts and users
• Service fees
• Deactivation of host accounts
• Managing Active Users and
Giving their Perks
• Pricing
• Web Interface /Data
Connectivity
• Listing Availability
• Booking Process
Governance of Shared Economy

Platform • Pricing-Bargaining
• Rules of sharing the asset

Consumer • Un-certainty Avoidance

• Ratings & Review
• Adhering to Etiquettes
user • Humane Orientation

• Privacy Risk/Security
• Societal Image
Platform • Entrepreneurial Orientation
• Social Responsibility

Producer • Un-certainty Avoidance

• Ratings & Review
• Power Distance
user • Humane Orientation
• Collectivism
Other factors that Govern are

Underutilized assets

Control Over Standards

Economies of Scale-Managing the Scale in terms of People dealing Privately

IT Governance Framework

Resources

Time and skills

Value creation

Digital platforms Reviews(eg.,social media)

Financial performance

Authenticity of Information-Users & Producers.

Approach towards sustainable future environmental consciousness

Social consciousness – users /producer /society state.

Platform Governance-How is this
Implemented?
Governance structure Governance structure
Decision rights
Ownership status
Resources & documentation Platform transparency
Platform boundary resources
Accessibility & control Platform accessibility
Process control
Platform openness
Trust & perceived risk Strengthen trust
Reduce perceived risk
External Relationships External relationship management
Implementation Struggles
• Legalizing Sharing Platforms
• Legal gray areas
• Intermediary liability
• Old risks, new parties
• New parties, new risks
• Importance of Insurance
Democratising Platform Governance- An
analytical framework
• Democratisation is also expected to contribute to realising
the sustainability goal of social equity by limiting the adverse
social impacts of platforms and by supporting a more
equitable distribution of the value created within the sharing
economy.
• In essence, there are hopes that emergence of these new
models of platform governance may contribute to a value
shift within the sharing economy, whereby social and
environmental values are promoted in addition to the more
instrumental values of the capitalist economy.
Here,
• Social values Include: humanistic altruism, social justice,
equality, mutual support, community and solidarity;
• Environmental values Include: biospheric altruism, harmony
with nature and post- materialism;
• Instrumental values of the capitalist economy include: Self-
interest, efficiency, financial wealth, material wealth, self-
sufficiency and economic rationality.
 Design and Governance of Platform
Ecosystems – Key Concepts and
Issues
Organisational perspectives on platform governance
• Decision rights partitioning – how decision making authority
is divided between the platform owner and developers
• Control – The formal and informal mechanisms implemented
by a platform owner to encourage desirable behaviours by
developers, and vice versa.
• The decision rights retained by Airbnb and those passed on
to the hosts and guests who use the platform (e.g. hosts
have the right to decide whether or not to accept a guest,
based on their profile and previous ratings); and also the
dynamics of control between Airbnb and users (e.g. Airbnb
offers insurance to encourage potential hosts to use the
platform).
• However, this model of platform governance is limited, in
the sense that it focuses on the dynamics of control within
an organisation and overlooks the dynamics of collaboration
between platform owners and users – dynamics that also
shape how decision rights are exercised.
Design and Governance of Platform
Ecosystems – Key Concepts and Issues
 Governance Research-IT Framework
• IT governance represents the framework for decision rights and
accountabilities to encourage desirable behaviour in the use of
IT.
• IT governance is not about what specific decisions are made.
Rather, governance is about systematically determining who
makes each type of decision (a right decision), who has input to
a decision (a right input) and how these people (or groups) are
held accountable for their role.
• Good IT governance draws on corporate governance principles
to manage and use IT to achieve corporate performance goals.
• The term “IT governance” was used to describe the set of
mechanisms for ensuring the attainment of necessary IT
capabilities.
• Advocates of democratic governance models claim that these
could help to create a more sustainable sharing economy by
ensuring that platforms promote social and environmental
values alongside the instrumental values of the capitalist
economy.
Lean government and
platform-based governance—
Doing more with less ! Scope
• Most citizens agree to have a smaller government,
but also that governments should still have the ability
and capacity to solve societal problems. These
seemingly contradicting requirements result in the
rise of a concept we label as ‘lean government’ (l-
Government for short).
• l-Government is about ‘doing more with less’ and is
about the changing role of government in responding
to complex political, managerial, and democratic
challenges.
• Driven by the financial crisis government have to
reduce their spending and reduce the size of their
administration, whereas the web enables to engage
with citizens and businesses, to build online
relationships and involve them in the tackling of
societal problems.
• In a lean government, responsibilities are assigned to
a single government agency, which is held account-
able, however, with the key understanding that such
responsibilities can only be fulfilled by collaboration
among multiple stakeholders— including citizens,
businesses, and NGOs.
• e-Government is the use of ITs to improve the
activities of public sector organizations. In the early
days e-Government was primarily focused on
creating citizen-centric service provisioning and on
government itself, without looking beyond the
boundaries of the public sector.
• e-Government was often discussed from the
technological perspective and often with no clear
connections to the public sector core values and
objectives. Over the years e-Government policies and
research have adopted a less techno-centric
approach and the focus shifted to viewing citizens in
their customer role and to creating customer-driven
services.
• A second wave of e-Government research is focused
on transformational government (t-Government)
theme, which is envisioned as a way to reform and
transform bureaucracy.
Types of customers of public platforms are at least the
following groups:
• Citizens in their role of user of services and content
or participating in democratic processes
• Application developers
• Different governments providing content or seeking
feedback From and interaction with their customers.
Lean government and platform-based
governance—Doing more with less
Innovation and Governance
Innovation Methods – Sustainability,
Testability and Market Opening
• The principle of sustainability, with its many aspects,
has now become deeply rooted in the innovations to
be implemented. The sharing economy is going in the
right direction as regards the efficient use of
resources and the spreading of a greater sensitivity
about environmental issues.
• The opportunity to test a given idea on the field is
often quite useful for both the producers and the
other players that are interested in knowing its details
and potential benefits.
• After all, the city itself does challenge the status quo,
by attracting so many people who wish to change
their social status. However, the fast pace imposed by
technological changes and the remarkable exchange
opportunities brought about by globalization, have
transformed some industries significantly,
MARKETING MYOPIA.
• If the city is a place where innovation develops more
easily, it is also true that the regulatory aspects of
economy are dealt with at some higher institutional
levels, i.e. regional, national and supranational ones.
Therefore, the sharing economy involves a series of
players operating at different levels.
• The ways in which new platforms (i.e. access tools
that are essential for the sharing economy), introduce
themselves to the markets recall the general problems
affecting the ecosystem of innovative startup
companies.
In particular, there are several limitations concerning:
• The taxation of new companies;
• Bureaucratic constraints for companies;
• The ability of the university system to educate and
train skilled IT staff;
• Difficulties in obtaining loans from financial
institutions.
Conclusion: Defining
platform governance as
“who makes what decisions
about a platform”
 The platform owner controls the platform, related
stakeholder interactions and dictates the rules of
engagement between the stakeholders in the
platform. The platform then, is the focal point of
engagement between the actors and aims to create a
community that lowers transaction costs and enables
some degree of control by its users.

 Within a platform system, power can be centralized or

decentralized between stakeholders in the platform
organization. This is important, given that recognizes
a platform ecosystem as including all stakeholders
interacting on the platform.
Conclusion: Defining
platform governance as
“who makes what decisions
about a platform”
 The control over standards and economies of scale
implicit in a centralized approach to IT control, as
compared with the responsiveness to stakeholder
needs implicit in a more decentralized approach to IT
control.

 Furthermore, the platform owner's trade-off between

retaining enough control over the platform while
relinquishing enough control to encourage autonomy
and initiatives of the users. Of course, control in the
platform environment can be bidirectional, where
platform owner and platform users can
simultaneously exercise control over each other.