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IntroductionThe main distinction between Turo and traditional

IntroductionThe ascension of digital platforms over the past decade has transformed the way we think of a traditional company. This has redefined conventional wisdom about how business should be run. In turn, it has also started a new era in which ownership as we know it is being redefined. A large degree of these changes can be attributed to the rise of the so called “sharing economy”. Digital platforms have appeared and act as intermediaries to connect supply and demand. To achieve this, platforms offer a convenient way for consumers to bypass the traditional marketplace in favor of enjoying the same experience offered by individuals, rather than professional organizations. An example is Turo, a vehicle-sharing company that connects car owners with car renters through its peer-to-peer marketplace.Over the past two decades, platforms emerged to start the onset of the so-called “sharing economy.” Although peer-to-peer marketplaces such as eBay were launched in the late 90’s during the Internet boom, the common examples of sharing economy-based companies today are the likes of Uber and Airbnb. The term sharing economy came to be used more often in the mid-2000s. The sharing economy is defined as the peer-to-peer sharing of a service, good or access via an online-based community (Hamari, Sjöklint & Ukkonen, 2015). The idea for a new marketplace, connected by people’s common interests, came at a time when many people had lost assets such as investments, cars and homes due to the economic crisis of 2008. Due to lower expendable income, consumers became more price-sensitive, which in turn allowed for the rapid expansion and interest in the sharing economy’s concept, utilizing underused assets or services through a digital platform for free or a fee, which held a high value for consumers. At the same time, Turo users can be providers of vehicles as well.Companies such as the aforementioned Airbnb and eBay emerged and began the onset of this new era in which companies were launched to take advantage of people’s resources, prompting many to expand their vision of what the future might hold. Three people who were inspired by this newfound freedom decided to create their own peer-to-peer ride-sharing service. Their idea was to leverage underutilized vehicles as resources for the community, by the community, by connecting car owners who weren’t in need of their vehicles with people looking to rent. More than a ride-sharing service such as Uber, this company would be a rental service unlike its traditional peers. The company was launched as RelayRides in 2009 in Boston, Massachusetts, but was renamed Turo in November 2015. The main distinction between Turo and traditional rental services is that Turo owns none of the vehicles it offers. Turo provides renters with cars its providers offer on their platform. Simply said, it enables renters and car owners to connect. The topic of research will be regarding the following question: Does Turo’s service offer a new pathway to sustainability for profit-seeking companies in the sharing economy? Literature reviewTuro is one of several companies changing the way everyday ownership is perceived. This literature review will discover how it is changing the ride-sharing industry based on current academic literature. We will start by reviewing literature on held beliefs about the state of the sharing economy and how it relates to business today to gain an insight into the changing nature of the sharing economy and how Turo’s platform can help to shed a new light on the future of the sharing economy. Further, the topics of ownership and its changing definition will be explored. There is a vast amount of literature concentrated on the sharing economy and its impact on businesses today. However, the literature used will be focused more closely on the changing definition of ownership and the impact the sharing economy will have on car ownership itself. The review will be separated into three, closely related sections starting with a descriptive analysis, an opinion section and, lastly, a research section that will focus on needed research to further complement recent discoveries. DescriptiveIn recent years, peer-to-peer and collaborative production has emerged as a powerful trend in the digital, networked industries (Baek, Manzini, Rizzo, 2010). This in turn has allowed for the growth of digital platforms, which today are a staple of the so called sharing economy. Platforms can be defined as markets that play the role of facilitators of exchange between different types of consumers who could not otherwise transact with each other (Gawer, 2014). In other words, they are  multi sided digital frameworks that shape the terms on which participants interact with one another (Kenney, & Zysman, 2016). It is vitally important that a platform bring together consumers and producers who are willing to trade through a platform for it to function efficiently and effectively. Turo owns proprietary technology that allows it to connect its users with its listings providers. This is achieved by offering its mobile application and website as a free-to-use platform. This platform is not only used to offer listings, but it also is used to verify the identity of both car owners and of its users. A large concern for digital platforms is the ability to create trust. Recent data based upon research in the hotel industry have shown that consumers tend to rely on easy-to-process information (Sparks and Browning, 2011). Turo relies on user-generated reviews to help build confidence for its platform’s users. At the same time, its providers can provide input about its users to help predict future behavior and help future car providers make better decisions about whom to rent their car to. Trust has become a key aspect that is needed to facilitate transactions in an online, unidentified, era (Furner, Racherla & Zhu, 2012). According to Abbey Stemler (2016)  there are three major drivers of the sharing economy. The first driver is modern trust, secondly technology and lastly economic and cultural pressures. This is particularly true considering the value of vehicles that are provided through this platform.Current literature shows that authors cannot agree on one definition for the sharing economy. However, one that defines it in an appropriate way is the “peer-to-peer-based activity of obtaining, giving, or sharing the access to goods and services, coordinated through community-based online services” (Hamari, Sjöklint & Ukkonen, 2015). Turo clearly belongs to this definition considering its platform offers a peer-to-peer-based service coordinated through its platform. Further, Turo is also able to benefit from network effects as the more people using Turo increases the offering of vehicles. Likewise, the more providers available to provide vehicles increases the likelihood of users and providers alike to use the service more. This network effects phenomenon is described as existing if a consumer’s utility of using a product increases with the number of other consumers using the product (Birke, 2009).Traditionally, a company had clearly defined actors surrounding its product. However, digital platforms create more complex dynamics as users can be providers as well. For example, a car owner who rents out a vehicle on Turo is also often a user of the platform. The owners of platforms control their intellectual property and governance. Providers serve as the platforms’ interface with users. Producers create their offerings, and consumers use those offerings (Van Alstyne, Parker & Choudary, 2016). In Turo’s case, renters are consumers, and car owners are the platform’s producers. However, a key characteristic of the sharing economy is that consumers and producers are able to switch roles easily. In other words, a car owner offering a vehicle on Turo may be renting another user’s car the next day. The terms can therefore be interchanged depending on the situation at a certain point in time. This is a key characteristic of the sharing economy that doesn’t take place in many other industries. Turo owns the platform and does not provide any listings itself. The idea behind the platform is to allow car owners to make money by renting their car to people searching for offers on its platform. This both eases the burden for car owners, who invest quite a bit of money in a vehicle which is not used often, and for renters who wish to circumvent traditional, more expensive rental companies. By not having to maintain and own a fleet, Turo is able to offer rentals at a lower price than traditional car rental services. Turo is a peer-to-peer-powered platform that cannot be successful without a streamlined process connecting its consumers (renters) with its providers (car owners). Digital platforms are today a vital part of any firm wanting to reach the maximum number of clients and reach the success and growth needed. (Kenney, & Zysman, 2016).. Besides this, it’s also allowing for one of the main concerns of the sharing economy to be solved, focusing on sharing resources in favor of focusing on generating profit. Turo is allowing for this to happen while still receiving investments from private equity sources.. As a result, investors forecast a positive future and an ability to generate profit in the long term. From an environmental standpoint, car sharing can reduce emissions in an impactful way. The trend of moving toward autonomous vehicles is poised to reduce the number of vehicles on the roads considerably. It has been estimated that each vehicle added to a car-sharing fleet reduces the number of automobiles on the road by 5 to 15 (Bondorová & Archer, 2017). Furthermore, a recent study (Namazu & Dowlatabadi, 2015) built on research in Vancouver, Canada, shows a 30% decrease in greenhouse gas emissions when car-sharing vehicles are used instead of privately owned cars. Opinion         Innovation is synonymous with disruption, and this doesn’t always go unnoticed by regulatory authorities. In 2013, New York’s State Department of Financial Services ordered Turo to cease operations in New York. According to the department, Turo misrepresented the insurance coverage it provided to its users. Turo has since halted operations and remains inactive in the state (Lieber, 2017).  However, New York was the only state that made such a decision, leaving it to be negligible in the bigger scope of Turo’s operations. Uber brought a promise of allowing drivers to earn extra income by chauffeuring people around. However, a shift has occurred in which taxi drivers have switched over to the application rather than working for a traditional taxi company. This is contrary to the idea of a sharing economy, as these cars were purchased for the sole purpose of generating revenue through a taxi service. The fact that Turo offers a true peer-to-peer service makes it remarkable, as this represents the sharing economy in its idealistic version, using underutilized resources to help consumers.Turo has enjoyed significant growth in both its listings and in the number of countries in which it operates. Notably, it has expanded to Germany, which is known for its stringent regulations against similar sharing economy-based companies. Uber, for example, has been banned in the country. Compared to Uber or Lyft, Turo’s growth hasn’t been nearly as exponential. But this is to be expected as Uber and Lyft replaced traditional services while Turo opened a new sphere in which trust plays a more significant role. Compared to a similar competitor such as ZipCar, Turo’s business model is much more related to the sharing economy. ZipCar is able to offer short-term rentals, because it has its own fleet of vehicles. However, Turo is able to leverage its business model better to allow for exponential-like growth. As an example, Turo’s “fleet” renews itself naturally, there are no parking or logistics issues, and geographic expansion and scaling are more seamless. Reputation systems and active supplier screening maintain quality, and the need for insurance keeps customers from bypassing the marketplaces. Since its inception in 2009, Turo has been able to maintain constant growth and value adding which, on a larger scale, implies that it is possible for profit-seeking companies to function while continuing to benefit the external environment and its users at the same time. One of the main benefits for providers using Turo’s platform is that cars sit idle during a large part of the day while depreciating and accruing continuous maintenance costs. Car drivers in the United States and Great Britain use their vehicles an average of 1 hour a day (Giuliano & Dargay, 2006). Turo uses this to its advantage by allowing car owners to exploit an otherwise depreciating investment. A positive sign for car owners is that providers are able to set the pricing for their vehicles. Turo takes a fee of approximately 25%. The exact amount is variable due to the renter’s ability to select different packages for insurance. Though the fee is relatively high, the owner can predict the amount of money his or her car will earn when rented out, which is a powerful tool in an era of powerful platform owners. This way, owners can accurately estimate their potential monthly earnings, which can be used to cover costs such as vehicle maintenance and finance payments. This, in turn, makes the platform more sustainable as services such as Uber set prices for fares, leaving certain drivers with lower-than-expected wages.         The ability for Turo to offer a positive economic incentive paired with the aforementioned beneficial ecological impacts cover topics that are highly debated in today’s business circles. The renewed investments in the company also forecast a belief in its mission and goals that are refreshing in a sharing economy used as a guise for companies to profit extensively from a seemingly positive initiative. Turo’s platform, on the other hand, offers a new pathway to sustainability for profit-seeking companies in the sharing economy. ResearchWhile there are no exact measures of the impact the sharing economy has had on our socio-economic system as of yet, it is clear and agreed that there has been a large shift in the perceived value of assets and ownership. The question that was explored was: Does Turo’s service offer a new pathway to sustainability for profit-seeking companies in the sharing economy? With the current literature at hand, we can offer the following hypothesis: Turo has proven it is possible for profit-seeking companies to achieve success in several aspects including, but not limited to, profit returns, ecological benefits and financial support for both its users and providers.  It is premature to predict the impact of autonomous vehicles on businesses such as Turo, but the increase in the amount of literature on the topic is telling. To continue the advancement of our socio-economic system, future ecological impacts and the timeline for a change in the common perception on ownership should be researched to help predict positive and/or negative outcomes of the emergence of new platforms such as Turo. Conclusion The recent developments in technology and the increased use of platforms of differents shapes, has changed the way we conduct business, live our ordinary lives and interact with each other. Digitalization is the biggest force disrupting business circles worldwide today. The same way that Uber has changed the taxi business, or Airbnb has changed the hotel industry, Turo is changing car ownership as we know it. Turo’s platform has proven to be a fine example of how the sharing economy can function in a sustainable way and offers a new pathway for profit seeking companies to survive without neglecting surrounding actors in its environment.  There is much research in progress quantifying the impacts of companies such as Turo which will offer us clearer insights and prospects for the future. Whilst the research on ride sharing is quite new, the results are very promising. Hopefully new research will be able to shed an even better light on this new phenomenon which in turn may allow us to better our society as a whole.


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