The term “sharing economy” is one of the biggest buzzwords out there. The sharing economy, also known as the peer-to-peer economy, is a socio-economic ecosystem that evolves around the sharing of resources (Matofska, 2015).. The sharing economy has developed very strongly over the past years due to the development and wide-spread availability of information technology. It has produced many interesting new business models, of which some have disrupted many traditional industries. Examples are of course UBER and AIRBNB. Another very interesting example of the sharing economy is Shout; a marketplace for “spots” in the form of a mobile application (Medium, 2016)!
A marketplace for spots? What do you mean with “spots”? A spot means any commodity that is linked to your name and can be physical or virtual (Smith, 2014; Chokkattu, 2014). Examples of physical spots would be a spot in the waiting line for the hottest nightclub in town, the new I-phone or even a nice spot in the park or at a beach. Examples of virtual spots are a reservation for a restaurant, a train ticket, a magazine subscription you want to share and anything else alike. The application provides you the opportunity to put out a “shout” that can either be an offer or a request for a certain spot. So how does it work in real-life? As an example, tonight you are going to one of the most popular restaurants in the city and you had put down your credit card number for the reservation. However, this morning you got the flu and you don’t want to be stuck with the cancelation costs. So what do you do? You go on to the Shout and see who would want it. You can either offer it for free or ask a certain amount of money for it. When another person accepts your “shout” you are put into a real-time chat to go over the details of the transaction. When everything is okay, the payment is done through the Shout application (Smith, 2014; Chokkattu, 2014).
Shout sounds a bit like an app-ified craigslist (Smith, 2014) .The founders, Zachariah Reitano and Henri Stern, don’t disagree that there is a resemblance. As mentioned in an article on the application, “Shout aims to have the same kind of local community bulletin-board vibe as craigslist, only less sketchy and unreliable” (Smith, 2014). And that last part of the sentence is why Shout is different, it is more trust worthy, safe and delivers better service. This is done in multiple ways. First, it manages the life-cycle of the transaction. Secondly it reserves the payed amount until the buyer has received what he paid for, which ensures a safe transaction. Third it verifies user identities, making it more trustworthy. Fourth, seller profiles can be reviewed by buyers through a review system (Smith, 2014), which will ensure a certain degree of desired behavior from sellers as they don’t want to damage their reputation.
Okay, that’s a great business model but how does Shout generate revenue? Well, for now they don’t. The plan is to ask a small fee for every transaction made on the application, but currently they are focused on platform growth (Chokkattu, 2014). Besides not earning any form of revenue there are some other downsides to the platform. First of all, there is a threat that the platform will (and probably already) attract a lot of scalping activities. Scalping is a commonly used term for the act of buying tickets to some sort of event, let’s say a popular concert or festival, with the goal of reselling them with a profit. It’s an acknowledged problem, but not a major one for large events that attract hundreds or thousands of people. However, the Shout platform also gives way for people trying this with restaurant reservations. For restaurant owners it would be a major problem if “scalpers” reserve half of their restaurant seats but are not able to sell them while the restaurant prepared for a maximum amount of people. This could financially kill certain restaurants if repeated frequently (Smith, 2014). This is definitely a very important issue the owners should address and try to minimize. Secondly, the service is currently only available in New York and I have some doubts whether this business model could be applied in smaller cities and in different countries. The ratio between demand and supply of certain “spots” would, in my opinion, differ greatly in smaller cities. Besides this, I argue that cultural differences would also affect the success of the platform in different counties. I, as a thrifty Dutch person, would never pay someone for a restaurant reservation. However, as stated in an interview “Shout wants to build a safe community within its service and allow users to leave it up to their imagination on what they want to use the platform for” (Chokkutta, 2014). In that hypothetical sense, the platform could be successful everywhere.
Chokkattu, J. (2015). Shout Is A Real-Time Classifieds App That Lets You Exchange Anything. Retrieved on 8 March 2016 from: http://techcrunch.com/2014/08/13/shout-is-a-real-time-classifieds-app-that-lets-you-exchange-anything/
Matofska, B. (2015). What is the sharing economy? Retrieved on 8 March 2016 from: http://www.thepeoplewhoshare.com/blog/what-is-the-sharing-economy/
Medium. (2016). Shout: A New Kind of Marketplace. Retrieved on 8 March 2016 from: https://medium.com/@UseShout/shout-a-new-kind-of-marketplace-48c4a57b1153#.na2jq9q6w
Smith, J. (2014). This App Lets You Scalp Your Dinner Reservation.Retrieved on 8 March 2016 from: http://observer.com/2014/05/this-app-lets-you-scalp-your-dinner-reservation/