Innovation in the sharing economy: Examining Uber's transformation

Abstract The sharing economy has altered transactions between providers and users in at least two pivotal ways. First, sharing economy offerings are often crowdsourced from a wide range of providers rather than a single firm. Second, these offerings are typically temporarily accessed rather than permanently owned. The effect of these two characteristics on how offerings are exchanged has generated considerable interest from scholars across a wide range of domains, including economics, management, and marketing. However, little is known about the impact of the sharing economy (and crowdsourced provision and temporary access), upon the way offerings are created. As a result, the degree to which innovation in the sharing economy differs from how it is typically conducted is largely unknown. Our research seeks to address this question. Specifically, we begin by reviewing the literature on innovation in the sharing economy and then offer a conceptual framework that focuses on the role of crowdsourced provision and temporary access within the innovation process. We then assess this framework by examining innovations introduced by Uber since its inception. In addition, we explore the degree to which sharing platforms differ from a typical profit maximizing firm by conducting an econometric analysis of the price differences between Uber and a traditional taxi service. We conclude by highlighting the implications of our research and suggesting avenues for future inquiry in this domain.