People are nowadays renting their spare everything, for example cars, apartments or knowledge to other people through platforms. Recently, four friends developed the Cycleswap platform (Trouw, 2015). Cycleswap provides the opportunity to rent a bike directly from local citizens of Amsterdam. The platform connects tourists and visitors to local citizens. This is the ideal opportunity for tourists and visitors to rent a cheap bike.
Local citizens place a rental price on their bike and list it on the website. The platform provides the tourist or visitor with the best alternative according to their location. When someone requests to rent a bike, the owner receive a mobile message. The owner can accept or decline the request, according to his own preferences. If the owner accepts the request, the bike can be picked up on an agreed pickup location. The payment has to be done in advance at the website. At the end of the rental period, the user has to return the bike to the pickup location. The user can rate the owner of the bike after returning the bike, so others can see their average rating. During the rental period, the user has full insurance. Cycleswap provides an alternative to the traditional bike rental companies. It has benefits for the owner and the user of the bike, like economic gains. The renter also connects and meets a local citizen, which might be useful in determining the route or which sights to see.
Cycleswap is a two-sided platform (Hagiu and Wright, 2015), which means that one side attracts more of the other. So when more citizens are offering their bike for rent at the platform, more people are attracted to the platform to rent a bike. This also works the other way around, when more people become interested in renting a bike from a local, it becomes more attractive for locals to offer their bike for rent.
As already mentioned in our class, there are a lot of such initiatives. For example, Über, Zipcar and Airbnb. Those platforms are competing with the traditional businesses, e.g. taxi’s, car rental companies and hotel companies. The platforms don’t own the products they offer, they only provide the service of connecting the two sides as an intermediary (Ketema and Ronéus, 2015). The usage of such platforms is not only benificial it can also be risky, because they also have their disadvantages. Like, abuse of your product, damages and accidents. The responsibilities are not always clear in such cases. At this moment the amount of platforms is rising. Not all of them might be as reliable as the leading ones. This may lead to an increasing amount of problems when using platforms. Legislation might be needed to create more assurances for both sides.
I think that at this moment, the traditional companies are still able to compete against platforms, because they are able to provide a standard service level which is very hard to achieve for platforms. But maybe in the future platforms will be able to outperform the traditional competition.
Hagiu, A., & Wright, J. (2015). Multi-sided platforms. International Journal of Industrial Organization, 43, 162-174.
Ketema, D., & Ronéus, G. (2015). Driven by a Stranger: UberPOP and the Creation of Peer-to-Peer Trust.