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POLITECNICO DI MILANO Master of Science in Management Engineering
How Customer Journey has been Influenced by Emerging Socio-Cultural Model: Sharing Economy
Case Study: Shared Mobility
Supervisor: Emillio Bellini Co-supervisor: Giuseppe Pinto
Author: Ekaterina Vernezi (813375)
Milan, April 28th 2017
2
Abstract In this paper we are going to investigate the emergence of a new socio-cultural model, so-called sharing economy or collaborative consumption, the move from the ownership to the access of the product/services. This phenomenon is reshaping the business approach of the traditional companies in different business fields, pushing them to adapt new business models in order to stay successful in the market. This paper represents an attempt to deeply identify the influence on the customer experience being impacted by the sharing economy phenomenon. In this work we investigate different types of shared mobility, such as car sharing, ridesharing and car on demand as a part of sharing economy, on the instance of the following case studies: Zipcar, Uber and BlaBlaCar. As a result, applying the customer journey canvas for each case aforementioned, we compare the customer journeys in the shared mobility field with a traditional car ownership, thus we can identify the way sharing economy is shaping the customer experience. Abstract Questa tesi intende investigare l’affermazione di un nuovo modello socio-culturale, il cosiddetto sharing economy o ‘consumo collaborativo’, che dovrebbe favorire il passaggio dal concetto di proprieta a quello di accesso al prodotto/servizio. Questo fenomeno tende a rimodellare l’approccio commerciale delle tradizionali aziende in differenti campi commerciali, spingendole ad adattare il loro business model per poter restare competitive sul mercato. Il presente lavoro costituisce un tentativo di identificare in maniera approfondita come il fenomeno della sharing economy possa influenzare l’esperienza dei consumatore. In questo lavoro analizziamo differenti tipi di shared mobility, come ad esempio car sharing, ridesharing e car on demand come parte di una sharing economy, utilizzando altresi i seguenti case studies: Zipcar, Uber and BlaBlaCar. Ai fini della nostra ricerca, una volta applicato il customer journey canvas ad ogni caso specifico di cui sopra, abbiamo confrontato il customer journey in una shared mobility con una tradizionale car ownership, per individuare il modo in cui la sharing economy stia modellando l’esperienza del consumatore.
Table of Contents o Abstract……………………………………………………………………………...2
o List of graphs ……………………………………………………………………….5
o List of tables ………………………………………………………………………...7
o 1 Chapter. Executive Summary ... ………………………………………………..8
1.1 Research Methodology & Framework…………………………………………..8
1.1.1 Getting started: definition of the research question………………... 9
1.1.2 Literature analysis. ………………………………………………….9
1.1.3 Selecting and conducting cases ……………………………………..9
1.1.4 Analyzing the data. ………………………………………………...10
1.1.5 Shaping hypothesis. ………………………………………………..10
1.1.6 Value of the research & future development …………………...…10
1.2 Literature analysis ……………………………………………………………..11
1.2.1 Customer journey …………………………………………………11
1.2.2 Sharing economy…………………………………………………...12
1.3 Shared mobility ……………………………………………………………….13
1.4 Case study ……………………………………………………………………..14
1.5 Result of the research and future development ………………………………. 15
2 Chapter Research: Methodology & Framework ………………………………16
2.1 Getting started: definition of the research question …………………………...16
2.2 Literature analysis…………………………………………………………….. 16
2.3 Selecting cases …………………………………………………………………17
2.4 Analyzing the data ……………………………………………………………..17
2.5 Shaping hypothesis……………………………………………………………..18
2.6 Value of the research & future development …………………………………..18
3 Chapter Literature Analysis: Existing marketing research on customer experience
3.1 Defining customer experience & customer experience background …………..19
3.2 Customer Journey lifecycle ……………………………………………………23
3.3 Consumer decision journey …………………………………………………....24
3.4 Traditional funnel metaphor vs circular journey ………………………………25
3.5 Touch points …………………………………………………………………...26
4
3.6 Customer Journey map ………………………………………………………...28
3.7 Customer journey canvas ……………………………………………………..29
Literature analysis on Sharing Economy or collaborative consumption
3.8 Concept of sharing instead of concept of ownership …………………………31
3.9 Evolution of SE concept ………………………………………………………32
3.10 Pillars of SE………………………………………………………………..33
3.11 Motivation and drivers of SE ……………………………………………...33
3.12 Socio-cultural driver. Millennials: access, not ownership ………………...34
3.13 Sharing economy as a new economic paradigm …………………………..38
3.14 Types of CC ……………………………………………………………….38
3.15 New dimensions of sharing ………………………………………………..41
3.16 Collaborative economy honeycombs ……………………………………...42
4 Chapter Sharing economy in transportation field: Shared Mobility
4.1 Shared mobility as a part of sharing economy ………………………………...45
4.2 Evolution and expansion of OEMs’ mobility services………………………... 46
4.3 Shared mobility service categories……………………………………………. 47
4.3.1 Integrated mobility ………………………………………………………47
4.3.2 On demand ride services (Car on demand) ……………………………...50
4.3.3. Ride sharing ……………………………………………………………..52
4.3.4. Car sharing …………………………………………………………….. 52
4.4 Carsharing and Millennials ……………………………………………………55
Case studies
4.5 Case study BlaBlacar ……………………….…………………………………57
4.5.1 Business model…………………………………………………… 58
4.5.2 Customer journey…………………………………………………. 59
4.6 Case study: Uber ………………………………………………………...……62
4.6.1 Business model ……………………………………………………63
4.6.2 Customer journey…………………………………………………. 64
4.7 Case study: Zipcar ……………………………………………………………..67
4.7.1 Business model ……………………………………………………68
4.7.2 Customer journey ………………………………………………….71
5 Chapter. Result of the Research & Future investigations ……………………75
o List of literature………………………………………………………………... 78
o Apprendix A: Glossary terms: Shared mobility
5
LIST OF GRAPHS
o Graph 1.1. Shared mobility services
o Graph 3.1 The Progression of economic value
o Graph 3.2 The traditional funnel metaphor
o Graph 3.3 The circular journey
o Graph 3.4 Generic customer journey mapping
o Graph 3.5 The customer journey canvas
o Graphs 3.6 How important is it for Millennials to own the followings?
o Graph 3.7 Collective Ingenuity Map
o Graph 3.8 Dimensions of sharing: Life cycle, community design and currency
o Graph 3.9. Five categories of Collaborative economy
o Graph 3.10 Twelve categories of CC
o Graph 4.1 Sharing economy sector and traditional rental sector projected revenue
growth. PWC, 2016
o Graph 4.2 Evolution and Expansion of Mobility services: the services in the red
frames belong to the shared mobility services
o Graph 4.3 Shared Mobility Service Categories
o Graph 4.4 Integrated mobility brands
o Graph 4.5 Integrated mobility: From mono-modal habits to inter& multi-modal
lifestyle
o Graph 4.6 Integrated mobility: example of customer journey
o Graph 4.7 Integrated Mobility Landscape
o Graph 4.8 Car on demand brands
o Graph 4.9 Global on demand ride services market, 2016
o Graph 4.10 Ride-sharing brands
o Graph 4.11 Comparative market positioning of Ridesharing business model
o Graph 4.12 Integrated mobility brands
o Graph 4.13 Car sharing market: top 10 countries, Global, 2015
o Graph 4.14 Willingness to car share in Europe, 2016
o Graph 4.15 Millennials: renters, as a percentage of total population, 2005-2013
o Graph 4.16 Hierarchy needs: how important it is to own the car, 2013
o Graph 4.17 Growth of BlaBaCar members 2008-2015
o Graph 4.18 Uber on the rise nationwide. Jan. 2014-March 2015
6
o Graph 4.19. Uber vs Taxi vs Car rental
o Graph 4.19 Member and vehicle Zipcar growth, global 2009-2015
o Table 4.20 Zipcar Business model
o Graph 4.21 How Zipcar works
o Graph 4.22. Zipcar’s customer
o Graph 4.23 Zipcar: Operation management scheme
o Graph 4.24. Zipcar: Business collaboration
7
List of Tables o Table 1.1 Touch point categories/elements
o Table 1.2 Types of SE or CC
o Table 3.1 Economic distinctions
o Table 3.2 Evolution of differentiation strategies 1970-current years
o Table 3.3 Phases of customer journey
o Table 3.4 Classic journey vs circular journey
o Table 3.5 Touch points categories
o Table 3.6 Touch points elements
o Table 3.7 Drivers/motivation for participation in SE
o Table 3.8 Deference between generations: Millennials, Generation X and Baby
Boomers
o Table 3.9 Features/characteristics which differ millennials from other generations
o Table 3.10 Types of Collaborative consumption (CC)
o Table 4.1 Carsharing models
o Table 4.2 Key findings of European carsharing market 2015
o Table 4.3 BlaBlaCar profile
o Table 4.4 Uber profile
o Table 4.5 Customer journey canvas: Pre service phase. BlaBlaCar vs Car ownership
o Table 4.6 Customer journey canvas: During & Post Service phases: BlaBlaCar vs Car
ownership
o Table 4.7 Customer journey canvas: Pre service phase. Uber vs Car ownership
o Table 4.8 Customer journey canvas: During & Post Service phases: Uber vs Car
ownership
o Table 4.9 Zipcar profile
o Table 4.9 Zipcar Business model
o Table 4.11. Zipcar revenue stream
o Table 4.12Customer journey canvas: Pre service phase. ZipCar vs Car ownership
o Table 4.13 Customer journey canvas: During & Post Service phases: ZipCar vs Car
ownership
o Table 4.14. Customer journey canvas. Car ownership: pre-service phase.
8
Chapter 1. Executive Summary Sharing economy has been referred to under different terms such as: collaborative
consumption, access economy, community-oriented economy, free economy, gift economy
and others, even though these terms essentially point out similar things. However, to make it
simply hereafter the sharing economy (SE) term will be used. Sharing economy concept
describes the rapid explosion in traditional sharing, bartering, lending, trading, renting, gifting
and swapping reinvented through network technologies on a scale and in ways humans never
seen before.
Millennials is a cohort following Generation X, starting at early 1980s as birth years and
ending birth years ranging from mid -1990s to early 2000s. The reasons why on context of
sharing economy we are going to refer to the so-called Millennials cohort are multiple, among
which we have to emphasize the followings: millennials have different values (they want to be
flexible in terms of geographical, financial and schedule independence) and they are more
interested in the experience itself rather than material things. Thus, millennials are turning to a
new set of services that provide access to products without the burdens of ownership, given
rise to the “sharing economy1”. As a consequence, we assume that the buying behavior of
millennials differ from the previous cohorts, thus influencing and shaping differently
customer experience.
1.1 Research Methodology & Framework
As a theoretical base we have been using the qualitative way to build theory from case study
research. Case study research method is an empirical inquiry that investigates a contemporary
phenomenon within its real-life context; when the boundaries between phenomenon and
context are not clearly evident; and in which multiple sources of evidence are used2. We applied
the exploratory way of qualitative research. This kind of studies set to explore the sharing
economy phenomenon in relation to customer journey.
The purpose of our research is to analyze the nature of sharing economy, as a socio-cultural
model and the nature of customer journey, in order to collect insights and information that can
enable us to find out the way customer journey has been influenced by sharing economy.
The process of inducting theory applying case study research from specifying the research
question to reaching closure has been based on the adaption of proposed by K. M Esdenhardt
approach3, which includes the following 6 steps, described below.
1 http://www.futureleadersglobal.com/future-labs 2 Yin, R.K. (2013). Case study research: Design and methods. Sage publication 3 Eisenhardt, K.M. (1989). Building theories from case study research. Academy of management review, 14 (4), 532-550
9
1.1.1 Getting started: definition of the research question. As has been mentioned before we
applied the exploratory case study, and identified the research question as following:
Does customer journey has been influenced by the emergence of new socio-
cultural paradigm: sharing economy. If so, how it has been shaping customer
experience in a shared mobility field?
1.1.2 Literature analysis. Comprehensive literature analysis of both sharing economy and
customer journey, has been conducted to provide solid ground of already existed
researches in the area of investigation.
The literature analysis has been conducted using around 150 sources, belonging to
different categories, mainly: scientific articles, HBR articles, Oxford articles, scientific
books/ebooks, dictionaries, researches made by different agencies/companies, such as
BCG, McKinsey, Frost & Sullivan.
The analysis of literature review has helped us to observe which areas of research could
be interesting or valuable to address. From the conducted research, it has been possible
to hypothesize the crossover between the sharing economy and its customer journey, as
well as the way how to emphasize this influence on the latest stages of the research.
1.1.3 Selecting and conducting cases. As a starting point we have been investigating the
shared mobility field, and as a result we identified its 4 following types: integrated
mobility, on-demand-ride services, ridesharing and car sharing.
Even though the first one belongs to the shared mobility concept, it has been decided
to not focus on it due to the fact that it doesn’t propose new kind of mobility itself, but
combined different kinds of existing mobility types in complex way.
Thus the research has been decided to focus on the 3 shared mobility types: on-
demand-ride services, ridesharing and car sharing. We decided to conduct the case
study based on each shared mobility solution. Regarding the way to choose the cases
study it is important to mention, that as criteria, we used the following requirements:
• Case study should belong to one of the 3 investigated types of shared mobility
mentioned above
• It should be the leader in the industry (market share, or the number of
members/rides globally)
• It should involve high level of customers
• It should be globally popular and growing service among customers
10
• It should be possible to conduct the customer journey canvas to be able to
compare the shared mobility journey with a classical one (car ownership).
Regarding the above mentioned requirements, after the research on existing in the shared
mobility area service providers, it has been decided to use the following case studies, which
are fully in line with the proposed above requirements:
• On demand ride service: Uber
• Ridesharing: BlaBlaCar
• Carsharing: ZipCar
1.1.4 Analyzing the data. Case study analysis has been focused on the following areas:
company overview, business model and customer journey as well as a creation of
customer journey canvas, which is the valuable tool in terms of customer journey
comparisons. As a result, we were able to map customer journey canvas for each type
of shared mobility, taking as a reference the classical customer journey (car ownership.)
It gave us the possibility to understand through the implementation of customer journey
canvas tool does classical customer journey differ from the one belonging to shared
mobility, and if so, in which way.
1.1.5 Shaping hypothesis. The first observation we get is that the shared mobility customer
journey differs from the classical ownership customer journey. In all 3 cases we have
“before” the experience part in a shared mobility area, which is almost absence in the
classical ownership journey. Thus, the customer journey in the shared mobility field is
shaped differently and represents not linear but circular journey. This shows us the new
way to conceptualize the customer journey, and can be explored in further
investigations as a valuable input to capture the value for the customers in order to
create exceptional customer experience, where all the phases of customer journey are
delivered seamlessly across all the touchpoints and in a consistent way.
1.1.6 Value of the research & future development.
With our research we have been able to show the influence of shared mobility on the customer
journey. This research may potentially help automotive OEMs to shape their business models
in a way more convenient for customers according to existing socio-cultural trends. One of the
way to fulfill the currently absent “before” stage of the customer experience for the OEMs
maybe the implementation of connected services, making the customer journey more circular,
instead of linear, thus improving overall customer experience.
11
1.2 Literature analysis
Literature analysis has been structured according to the following main streams of the research:
▪ Customer journey
▪ Sharing economy
1.2.1 Customer journey. As far as we are going to analyze the influence of different socio-
cultural models, taking as a reference the sharing economy vs ownership (millennials vs pre-
millennials) on customer journey, our analysis has been started from the investigation of
customer experience.
Customer experience is a sum-totality of how customers engage with a company and brand,
not just in a snapshot in time, but through the entire arc of being a customer4. Considering the
evolution of the market development, the value of the CX has been changing drastically: from
ignoring to emphasizing it’s the greatest importance. Nowadays, effective business strategy
moves its attention from product marketplace towards creating the value for the customer.
Thus, engaging and lasting customer experience becoming a main point of difference, on which
business strategy is build.
During the journey, customer goes through different phases of customer life cycle, while
the interaction and relation with a company is changing. The phases itself may differ from
customer to commitment perspective and from customer experience perspective. It is important
to mention that, customer isn’t looking for each particular engaging phase, but is seeking the
experience., where all the phases are delivered seamlessly across all the touchpoints in a
consistent, connected and personalized way, thus shaping the total experience.
Customer journey consists of different touchpoints created in a way to organize the best
communication between customer and company. Customer touchpoints are all the different
ways consumers experience a product or service, from when they first become aware of it, until
they dispose of it.5 Touch points can be categorized in a different way, in our research we refer
to two approaches, such as touch point categories and touch point elements, which are
summarized in the table 1.1
4 Richardson A. (2010). Understanding customer experience. HBR 5 Greenwald M. (2014). 20 ways Apple masters customer touchpoints and why it’s great for business. Forbes.
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Table 1.1 Touch point categories/elements
Touch point categories/elements Author Source Touch point's categories
▪ Product; ▪ Interaction; ▪ Messages; ▪ Settings.
Adam Richardson
Source: extracted from “Adam Richardson (2010) Touchpoints bring customer experience to life”. HBR
Touch point's elements
▪ Atmospheric; ▪ Technological; ▪ Communicative; ▪ Process; ▪ Employee-customer interaction; ▪ Customer-customer interaction; ▪ Product interaction.
A. Stein, B. Roamaseshan
A. Stein, B. Roamaseshan (2016). Towards the identification of customer experience touch point elements”. Journal of retailing and consumer services, Elsevier.
Source: compiled by the author
Regarding the tools to map the customer journey, there is no one solution, meanwhile we
can see a variety of different approaches. In our work we have been focused on the following
tools: customer journey map (CJM) and customer journey canvas (CJC). The first one provides
structured visualization of a user experience through a high-level overview of the factors
influencing user experience (from the user perspective), while the second aim to deliver the
same output, providing visualization of services before, during and after the journey.
After analyzing existing literature, it has been suggested to apply CJM to the Zipcar
customer journey while analyzing the car sharing vs car owning customer experience.
1.2.2 Sharing economy. The sharing economy concept describes the rapid explosion in
traditional sharing, bartering, lending, trading, renting, gifting and swapping reinvented
through network technologies on a scale and in ways humans never seen before.
Summarizing the researches of different authors, 4 main drivers of SE has been
distinguished, among which are the followings: economic, environmental, technological and
socio-cultural. Even though the concept of sharing has been around for centuries, as a business
model SE appeared recently, mainly being positioned on the following pillars: Digital
platforms; more collaborative forms of consumption; Transactions that offer access over
ownership; branded experience that drive emotional connection; Understanding an economy
built on trust; Rethinking value exchanged.
In order to identify the types of SE, different approaches have been investigated and
summarized below, in the table 1.2
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Table 1.2 Types of SE or CC
Types of SE or CC Type Approach Source
• Product service system; • Redistribution system; • Collaborative lifestyle.
3 systems proposed by author
Rachel Bostman and Roo Rodgers (2010). “What is mine is yours: the rise of collaborative consumption”.
• Lifestyle; • Community design; • Currency.
Is based on the main dimensions of sharing
Latitude (2010). The New sharing economy report.
Honeycomb: • Goods; • Services; • Money; • Space; • Transportation.
According to the field where they are explored.
1Mila.com
Honeycomb, version 2.0: • Learning, municipal, money,
goods, health &wellness, space, food, utilities, transportation, services, logistics, corporate
According to the field where they are explored.
1Jeremiah Owiang , Mesh Labs
Source: compiled by the author
The rise of sharing economy is deeply connected with a so-called Millennials cohort. They
have come of age of globalization and technological changes, being the first generation of
digital natives, they have a set of behavior which is differ from the previous generations. Their
unique experiences are changing the ways we buy and sell, forcing companies to examine their
traditional business models to be able to adapt them to the new customer needs, moving from
the concept of owning towards accessing /sharing and from material towards experiential
purchases.
The main goal of this chapter is to demonstrate the current input researches has been made
investigating the customer journey and sharing economy areas.
1.3 Shared mobility
To be able to conduct the case study, as a first step we are going to investigate the area of
the case: shared mobility.
Among different sectors of sharing economy, shared mobility in nearest future is going to
occupy the biggest place, making it one of the most promising sector for investment
opportunities. Shared mobility is defined as an innovative transportation strategy that enables
users to gain short-term access to transportation modes on as-needed basis. The evolution of
14
OEM’s mobility services currently consists of the 3 following stages: Car ownership ->Car
services ->Car independent. Shared mobility services occupied the 2nd and 3rd stages including:
car on demand, ride-sharing, care sharing and integrated mobility respectively, see graph 1.1
Graph 1.1. Shared mobility services
Source: compiled by the author
• We refer to integrated mobility when more than one means of transport is marketed in
the form of a cooperation of several service providers;
• On demand ride services are provided by a motor vehicle, licensed to transport
passengers in return for payment of a fare and typically fitted with a taximeter, they
include the following options: Ride sourcing or transportation network companies
(TNCs); Ride splitting; e-Hail services (Taxis).
• Ridesharing is the sharing of vehicles by passengers to reduce vehicle trips, traffic
congestion and automobile emission. This includes vanpooling and carpooling.
• In a car sharing model, individuals gain the benefits of private vehicle use without the
costs and responsibilities of ownership: rather than owning one or more vehicles, a
household or business accesses a fleet of shared vehicles on an as-needed basis. This
includes the following types: roundtrip, one-way and personal vehicle sharing.
As has been mentioned before, millennials cohort is deeply involved in sharing economy
concept, which we can also see referring to their attitude towards shared mobility: carsharing.
Globally, 35% of millennials are willing to car share, while among the generation X and Baby
boomers only 17% and 7% respectively prefer car sharing.
The aim of this chapter is to investigate the shared mobility area and its types in order to
be able as a next step to conduct the case study.
1.4 Case study
As has been mentioned before we conducted 3 case study in regarding to the different types of
shared mobility:
15
• On demand ride service. Uber belongs to the shared mobility concept, in particular to
car on demand service. It is a world’s famous transportation network company,
operating in 570 cities worldwide. The types of available cars include uberX, Taxi,
Black, SUV and LUX. The most affordable option is UberX, which directly compete
with traditional e-hail services (taxi).
• Ridesharing. BlaBlaCar belongs to the shared mobility concept, in particular to
ridesharing. It is a world’s largest long-distance ridesharing company, with more than
40 million members and 600 employees across 22 countries6, with more than more
than 21 million mobile app downloads (iPhone + Android)7.
• Carsharing. Zip car belongs to the shared mobility concept, in particular car sharing:
one-way car sharing (point-to point car sharing). Zipcar is the world’s largest station-
based operator with 950,000 members in over 50 cities;
In each case study, we have been focusing on the company overview, business model and
customer journey. As a result of case studies we mapped the customer journey applying the
customer journey canvas.
1.5 Result of the research and future development.
As a result of the research, using customer journey canvas we observe that some par
The first observation we get is that the shared mobility customer journey differs from the
classical ownership customer journey. In all 3 cases we have “before” the experience part in a
shared mobility area, which is absence in the classical ownership journey.
Thus, the customer journey in the shared mobility field is shaped differently and represents
not linear but circular journey. This shows us the new way to conceptualize the customer
journey, and can be explored in further investigations as a valuable input to capture the value
for the customers in order to create exceptional customer experience, where all the phases of
customer journey are delivered seamlessly across all the touchpoints and in a consistent way.
With our research we have been able to show the influence of shared mobility on the
customer journey. This research may potentially help automotive OEMs to shape their business
models in a way more convenient for customers according to existing socio-cultural trends.
One of the way to fulfill the currently absent “before” stage of the customer experience for the
OEMs maybe the implementation of connected services, making the customer journey more
circular, instead of linear, thus improving overall customer experience.
6 https://www.blablacar.com/about-us 7 https://www.linkedin.com/company/blablacar
16
Chapter 2. Research Methodology & Framework
As a theoretical base in the following research we have been using the qualitative way to
build theory from case study research. Case study research method is an empirical inquiry that
investigates a contemporary phenomenon within its real-life context; when the boundaries
between phenomenon and context are not clearly evident; and in which multiple sources of
evidence are used8. In our research among different categories of the cases study, we applied
the exploratory one. This kind of studies set to explore the sharing economy phenomenon in
relation to customer journey.
The purpose of our research is to analyze the nature of sharing economy, as a socio-cultural
model and the nature of customer journey, in order to collect insights and information that can
enable us to find out the way customer journey has been influenced by sharing economy.
The process of inducting theory applying case study research from specifying the research
question to reaching closure has been based on the adaption of proposed by K. M Esdenhardt
approach9, which includes the following 6 steps, described below.
2.1 Getting started: definition of the research question. As has been mentioned
before we applied the exploratory case study, and identified the research question as following:
Does customer journey has been influenced by the emergence of new socio-cultural
paradigm: sharing economy. If so, how it has been shaping customer experience in a
shared mobility field?
2.2 Literature analysis. Comprehensive literature analysis of both sharing
economy and customer journey, has been conducted to provide solid ground of already existed
researches in the area of investigation.
The literature analysis has been conducted using around 150 sources, belonging to
different categories, mainly: scientific articles, HBR articles, Oxford articles, scientific
books/ebooks, dictionaries, researches made by different agencies/companies, such as BCG,
McKinsey, Frost & Sullivan. The analysis of literature review has helped us to observe which
areas of research could be interesting or valuable to address. From the conducted research, it
8 Yin, R.K. (2013). Case study research: Design and methods. Sage publication 9 Eisenhardt, K.M. (1989). Building theories from case study research. Academy of management review, 14 (4), 532-550
17
has been possible to hypothesize the crossover between the sharing economy and its customer
journey, as well as the way how to emphasize this influence on the latest stages of the research.
2.3 Selecting cases. Selection of cases is an important aspect of the process of
building theory from case study research. As a starting point has been investigating the shared
mobility field, and as a result identified its 4 following types: integrated mobility, on-demand-
ride services, ridesharing and car sharing.
Even though the first one belongs to the shared mobility concept, it has been decided to not
focus on it due to the fact that it doesn’t propose new kind of mobility itself, but combined
different kinds of existing mobility types in complex way.
Thus the research has been decided to focus on the 3 shared mobility types: on-demand-
ride services, ridesharing and car sharing. We decided to conduct the case study based on
each shared mobility solution. Regarding the way to choose the cases study it is important to
mention, that as criteria, we used the following requirements:
• Case study should belong to one of the 3 investigated types of shared mobility
mentioned above
• It should be the leader in the industry (market share, or the number of
members/rides globally)
• It should involve high level of customers
• It should be globally popular and growing service among customers
• It should be possible to conduct the customer journey canvas to be able to
compare the shared mobility journey with a classical one (car ownership).
Regarding the above mentioned requirements, after the research on existing in the shared
mobility area service providers, it has been decided to use the following case studies, which
are fully in line with the proposed above requirements:
• On demand ride service: Uber
• Ridesharing: BlaBlaCar
• Carsharing: ZipCar
2.4 Analyzing the data. Case study analysis has been focused on the following areas:
company overview, business model and customer journey as well as a creation of customer
journey canvas, which is the valuable tool in terms of customer journey comparisons. As a
result, we were able to map customer journey canvas for each type of shared mobility, taking
as a reference the classical customer journey (car ownership.) It gave us the possibility to
18
understand through the implementation of customer journey canvas tool does classical
customer journey differ from the one belonging to shared mobility, and if so, how exactly.
2.5 Shaping hypothesis.
The first observation we get is that the shared mobility customer journey differs from the
classical ownership customer journey. Implementing customer journey map, we divided the
journey on the “before, during and after” the experience. It can be clearly seen that in all 3
cases we do have complete “before” the experience part in a shared mobility area, which is
absence in the classical ownership journey.
This shows that the customer journey in the shared mobility field is shaped differently
and represents not linear but circular journey. This shows us the new way to conceptualize the
customer journey, and can be explored in further investigations as a valuable input to capture
the value for the customers in order to create exceptional customer experience, where all the
phases of customer journey are delivered seamlessly across all the touchpoints and in a
consistent way.
2.6 Value of the research & future development.
With our research we have been able to show the influence of shared mobility on the
customer journey. Taking into consideration fact that the success of customer experience
depends on the sum of all interactions and experience along the customer lifecycle, requires a
complete, robust customer experience solution that delivers consistent information and
functionality across all points of interaction10, this research may may potentially help
automotive OEMs to shape their business models in a way more convenient for customers
according to existing socio-cultural trends.
10 Oracle (2012).Customer Experience Reference Architecture. Today’s winners are defined by customer experience.
19
Chapter 3. Literature Analysis: Existing marketing research on
customer experience
In this chapter we would like to present the literature analysis, which will bring us to the
actuality and reasonability of current investigation, at the same time showing the demand for
the research and highlighting its importance. The literature review in this chapter has been
concentrated mainly on 2 topics: customer experience and sharing economy or collaborative
consumption.
3.1 Defining customer experience & customer experience background
The investigation of the customer experience will be started from the understanding of the
term experience. The word experience comes from the Greek word “empeiria” and the Latin
word “experience”, which refers to the experience as a process or the result of consciousness
or awareness. As a philosophical term experience has been used since 1800s regarding the
concept of life and living11. Kant asserted that experience is empirical knowledge, explaining
it as a knowledge by means of connected perception12. Oxford dictionary defined experience
as followings13:
• as a noun meaning: practical contact with and observation of facts or events; an
event or occurrence which leaves an impression on someone
• as a verb, meaning: feel (an emotion of sensation); encounter or undergo (an event
or occurrence);
• as an adjective, meaning: involving or based on experience and observation.
In managerial literature experience is defined as a whole events experienced by a person,
often affect emotions, and occurs when the interaction takes place through the simulation of
goods and services consumed14. Regarding the marketing perspective, the notion of experience
states that it is something unique, which can be remembered and suitable over time. It may
involve emotional, physical, intellectual and spiritual aspects of the individual.15
11 Gunnar Prause, Urve Venesaar (2011). BWV Berliner-Wissenschafts-Verlag. University-Business Cooperation, Tallinn 12 http://www.philosophy-dictionary.org/experience 13 www.oxforddictionaries.com 14Hirschman E.C and Holbrook M.B(1982). Hedonic Consumption: Emerging Concepts, Methods and Propositions. Journal of Marketing, Vol. 46, No. 3 15 Pine B. J. ll and Gilmore L. H. (1999). Welcome to the experience economy. HBR
20
The value of customer experience has been changing in accordance to the evolution of
market development. In the beginning of the 1950th customer was seeing as a rational decision
maker in the information process perspective. The consumer experience itself was ignored and
the marketing activities were traditionally focused on the physical aspects of the products and
services as quality, functionality, availability, price, delivery and customer support.
Despite the recognition of customer experience importance among practitioners, the
academic literature regarding this topic was limited. One of the first researches who
emphasized that consumption has experiential aspect were Holbrook and Hirshman in 1982.
They noted the role and importance of the emotions in consumer behavior, selection of the
brands, purchasing process and use of the goods. In particular they referred to the hedonic
consumption concept, which designates those facets of consumer behavior that relate to the
multisensory (receipt of experience in multiple sensory modalities including tastes, sound,
scents, tactile impressions and visual images), fantasy and emotive aspects of one’s experience
with products16. In 1999 next step in identifying the importance of customer experience was
made by Schmitt. He explored the way companies create experiential marketing through
customer sense, feel, think, act and relate to a company and its brands. At the same time Pine
and Gilmore proposed to see the progression of economic value as the four stage evolution,
where the last one represents experience economy with the experience in the center of the
concept 17.
The progression of economic value consists of the following stages: extract commodities,
make goods, deliver services, stage experience, later on “guide transformation’ was added as a
5th stage of the progression (see the graph 3.1).
16 Hirschman E.C and Holbrook M.B(1982). Hedonic Consumption: Emerging Concepts, Methods and Propositions. Journal of Marketing, Vol. 46, No. 3 17 Pine B. J. ll and Gilmore L. H. (1999). Welcome to the experience economy. HBR
21
Graph 3.1 The Progression of economic value
Source: B. Joseph Pine ll and Lames H. Gilmore (1999). Welcome to the experience economy. HBR
The authors called experience as a development of economic value, where the company
does not sell experience, but provides tangible facilities and a favorable context of experience
in a way consumers are satisfied with a unique experience. Authors argue that economic
offerings differ according to the stage of economic value. The description of stages is presented
below in the table 3.1.
Table 3.1 Economic distinctions
Economic offerings Commodities Goods Services Experiences Transformations
Economy Agrarian Industrial Service Experience Transformation Economic function
Extract Make Deliver Stage Guide
Nature of offering
Fungible Tangible Intangible Memorable Effectual
Key attributes
Natural Standardized Customized Personal Individual
Method of supply
Stored in bulk Inventoried
after production
Delivered on demand
Revealed over a
duration
Sustained through time
Seller Trader Manufacturer Provider Stager Elicitor Buyer Market Customer Client Guest Aspirant
Factors of demand
Characteristics Features Benefits Sensations Traits
Source: Pine B. J. ll and Gilmore L. H. (1999). Welcome to the experience economy. HBR
22
After the B. Joseph Pine ll and Lames H. Gilmore work , under the concept of customer
experience were working different researchers as Schitt, Shaw and Ivens, and Caru and Cova,
mainly emphasizing the aspects of value creation of the company and the customer18.
Furthermore, Meyer and Schwger 19proposed to consider two types of customer
experience as direct and indirect. The first occurs in the place when customer buy, use and
receive services intended to consumers. The second one may have a form of unexpected
interaction through company’s product representative, services or brands and positive
recommendations or criticism, news, reports, advertisements and others.
Nowadays, effective business strategy is no longer based on traditional physical elements20.
Companies move their attention from focusing on product marketplace to creating the value
for the customer, providing engaging and lasting experience. Last decade customer experience
became the main point of difference on which business strategy is build. In the table below you
can see the differentiation of strategies companies have been using last 50 years21
Table 3.2 Evolution of differentiation strategies 1970-current years
Years Differentiators
1970s Functionality, quality
1990s Brand, price
Early
2000 Service, information, delivery
Mid 2000s Customers’ emotional attachment with the brand, the brand community and the brand company
via customer experience22
Source: Mascarenhas O.A, Kesavan R and Bernacchi M. (2006). Lasting customer loyalty: a total customer
experience approach. College of Business Administration, University of Detroit Mercy, Detroit, Michigan, USA
Different authors name different reason for improving the customer experience. Mainly
they concerned with increase of customer satisfaction and therefore customer loyalty, increase
confidence and trust, create emotional bonds with customers and provide competitive
18 Andajani E. (2015). Understanding customer experience management in retailing. 2nd Global Conference on Business and Social science. University Surabaya, Indonesia 19 Meyer C, Schwager A (2007). Understanding Customer Experience. HBR 20 MacMillan I and McGrath R.G, (1997) Discovering New Points of Differentiation. HBR 21 Mascarenhas O.A, Kesavan R and Bernacchi M. (2006). Lasting customer loyalty: a total customer experience approach. College of Business Administration, University of Detroit Mercy, Detroit, Michigan, USA 22 Mascarenhas O.A, Kesavan R and Bernacchi M. (2006). Lasting customer loyalty: a total customer experience approach. College of Business Administration, University of Detroit Mercy, Detroit, Michigan, USA
23
advantage23. The research conducted by R. Johnston and X. Kong in 1991 shows that superior
customer experience affects customer satisfaction, delivers customer loyalty, influences
expectations, instils confidence supports the brand, creates emotional bonds with customers or,
conversely, leads to emotional scarring24. Another research shows that organization is able to
skillfully manage the entire experience by reaping enormous rewards: enhanced customer
satisfaction, reduced churn, increased revenue, greater employ satisfaction25. Thus, we can see
that today customer experience plays predominant role on the way to successful development
of the company.
Concerning the definition of customer experience (hereinafter CX), many different
approaches have been applied, in order to sum them up Harvard Business Review ( further on
HBR) suggested to see CX as sum-totality of how customers engage with a company and
brand, not just in a snapshot in time, but through the entire arc of being a customer26
3.2 Customer Journey lifecycle
Customer journey can be seen as conceptualizing approach of capturing people’s
experience from process-oriented method27. This is a transition from the point never-a-
customer to “always-a-customer”. On this journey customer goes through different phases of
customer life cycle, while the interaction and relation with a company change.
Usually the customer life cycle starts from the need or wiliness of the customer to acquire
a product or service and continues till the moment when the product is reclaimed, redeemed or
renewed. The successful journey should be managed in the way to maximize value for both the
organization and the customer. Regarding the customer journey phases different authors
suggest different amounts of them, meanwhile there is no big differences, only the level of
details.
Below are presented the phases of customer journey from both customer and company
perspective of view (see table 3.3)
23 Johnston R, Xiangyu Kong (1991). Managing service quality: a road map for improvement. Journal of service theory and Practice. 24 Johnston R and Xiangyu Kong (2011). The customer experience: a road-map for improvement. Warwick Business School, University of Warwick, Coventry, UK. 25 Rawson A,, Duncan E., Jones C. (2013). The truth about customer experience. HBR. 26 Richardson A. (2010). Understanding customer experience. HBR. 27 Nenonen, Suvi (2008). Customer journey a method to investigate user experience. Helsinki University of Technology.
24
Table 3.3 Phases of customer journey
From customer to commitment perspective
From customer experience perspective
Suspect - could the customer fit to company’s target market
Need – I am considering a purchase – who should I approach?
Prospect-customer fits the profile and is being approaches for the first time
Enquire – I make general enquiries to possible suppliers.
First time customer – customer makes first purchase
Approach – I decide to make more specific enquiries to a selected few
Repeat customer-customer makes more purchases
Recommendation – they make recommendations and/or send proposals
Majority customer-customer selects your product/company as supplier of choice
Purchase – I decide to purchase and place my order with one supplier
Loyal customer – customer is resistant to switching suppliers, strong attitude
Experience – the supply and I use the product or service
Advocate – customer generates additional referral currency
Problem – I have a problem that is reported to and handled by supplier Reconsider – I am considering purchasing something else – should I go back
Source: extracted from “Nenonen, Suvi (2008). Customer journey a method to investigate user experience. Helsinki University of Technology.”
Customers are looking for an exceptional customer experience, where all the phases of
customer lifecycle are delivered seamlessly across all the touchpoints and in a consistent,
connected and personalized way. The success of customer experience depends on the sum of
all interactions and experience along the customer lifecycle, requires a complete, robust
customer experience solution that delivers consistent information and functionality across all
points of interaction28.
3.3 Consumer decision journey
Over the last decades the development of ICT has changed the way customer behave
regarding the traditional customer life cycle. Consumers became experts in their use of
products/services, they know what and when they want and can get it to their doorsteps. In
response, marketers and big data analytics focused their attention on deeper understanding
customers in order to be able to anticipate their needs. One of the tools to influence on the
customer is to analyze them through the moments of interaction or touch points- any interaction
28 Oracle (2012). Customer Experience Reference Architecture. Today’s winners are defined by customer experience.
25
points that are between a customer and a brand. For years, touchpoints have been understood
through the metaphor of a “funnel”, while today “circular journey” the more sophisticated
approach has appeared.
3.4 Traditional funnel metaphor vs circular journey
Traditionally “funnel metaphor” method was believed to be followed by customers, however
it was substitute with “circular journey” approach as long as the companies became more
advances in the development of their marketing strategies.
3.4.1 Traditional funnel metaphor
In the traditional funnel metaphor, consumers systematically narrow the initial
consideration set as they weight options, make decisions and buy products, thus the start with
a set of potential brands and methodically reduce that number to make a purchase29. Then, the
post-sale period is a trial to determine consumer loyalty and the probability to renew the
purchase. The funnel metaphor provides a way to understand the strength of a brand in
comparison with its competitors at different stages, highlight the bottlenecks and focus in the
marketing challenge. The funnel itself consists of the followings: awareness, familiarity,
consideration, purchase, loyalty (see the graph bellow).
Graph 3.2 The traditional funnel metaphor
Source: David Court, Dave Elzinga, Susan Mulder, Ole Jorgen Vetvik, (2009). The consumer decision journey.
McKinsey. 3.4.2. Circular journey
While analyzing the purchase decision data, it was suggested that rather than a linear process
most consumers are engaged in a more circular journey30. It consists of four following phases:
initial consideration, active evaluation, or the process of researching potential purchases,
closure, when consumers buy brands, and post purchase, when consumers experience them
29 Court D., Elzinga D., Mulder S., Ole Jorgen Vetvik, (2009). The consumer decision journey. McKinsey. 30 Szmigin I and Piacentini M. (2015). Consumer behavior. Oxford University Press.
26
(see the graph below)31
Table 3.4 Classic journey vs circular journey32
Classic
journey
Consumers engaged in an extended consideration and evaluation phase before either entering into
the loyalty loop or proceeding in to a new round of consideration and evaluation that may lead to
the subsequent purchase of a different brand.
Circular
journey
It compresses the consider step and shortens or entirely eliminates the evaluate step, delivering
customer directly into the loyalty loop and locking them within it.
Source: extracted from: Court D., Elzinga D., Mulder S., Ole Jorgen Vetvik, (2009). The consumer decision journey. McKinsey.
Graph 3.3 The circular journey
Source: Court D., Elzinga D., Mulder S., Ole Jorgen Vetvik, (2009). The consumer decision journey. McKinsey.
3.5 Touch points
Customer touchpoints are all the different ways consumers experience a product or service,
from when they first become aware of it, until they dispose of it.33 Customer journey consists
of different touchpoints created in a way to organize the best communication between customer
and company. Touch points along the customer journey can be categorized in some different
31 Court D., Elzinga D., Mulder S., Ole Jorgen Vetvik, (2009). The consumer decision journey. McKinsey. 32 Edelman D.C. and Singer M (2015). Competing on Customer Journeys. HBR. 33 Greenwald M. (2014). 20 ways Apple masters customer touchpoints and why it’s great for business. Forbes.
27
ways. Thus, Adam Richardson, suggests to divide them into the 4 following categories:
products, interactions, messages and settings. Below you can see the table with categorized
touch points and their descriptions34.
Table 3.5 Touch points categories
Touch point Description
Product The hardware, software and services themselves
Interaction Two way interaction that can be in person (i.e. in the store), on the phone, or virtual: websites, blogs, social networks, user forum presences and others.
Messages One way communications that include brand, collateral, manuals, advertising, packaging etc.
Settings Anywhere that the product is seen or used: a retail store, a friend’s house, TV product placement, events, shows etc.
Source: extracted from: Richardson A. (2010). “Touchpoints bring customer experience to life”. HBR
Another approach regarding the categorization of touch points was suggested by A. Stein
and B. Ramaseshan35. Their research revealed the following seven distinct theme relating to
the elements of CX touch points: atmospheric, technological, communicative, process,
employee-customer interaction, customer-customer interaction and product interaction
elements.
Table 3.6 Touch points elements Touch point
elements Definition Codes
Atmospheric The physical characteristics and surrounding customers observe when interacting with any part of retailer
Store layout and design, store attractiveness, ambience, amenities, store display
Technological A customer's direct interaction with any form of technology during an encounter with a retailer.
Technology-ease of use, technology-convenience, self-service technology
Communicative One-way communication from the retailer to the customer, including both promotional and informative messages.
Promotional message, informative message, advertisement,
Process The actions or steps customers need to take in
order to achieve a particular outcome with a
retailer.
Waiting time, navigation, service
process
Employee-
customer
interaction
The direct and indirect interactions customers
have with employees when interacting with any
part of the retailer.
Helpful employee, personalized
service, friendly greeting,
argumentative employee
34 Richardson A. (2010). “Touchpoints bring customer experience to life”. HBR 35 Stein A., Roamaseshan B. (2016). Towards the identification of customer experience touch point elements. Journal of retailing and consumer services. Elsevier.
28
Customer-
customer
interaction
The direct and indirect interactions customers
have with other customers when interacting with
any part of the retailer.
Customer reviews, WOM, direct and
indirect customer interaction
Product
interaction
The direct or indirect interactions customers have
with the core tangible or intangible product
offered by the retailer.
Product quality, product assortment,
direct and indirect product interactions
Source: extracted from “Stein A., Roamaseshan B. (2016). Towards the identification of customer experience touch point elements. Journal of retailing and consumer services. Elsevier
Several researches ague that CX cannot be absolutely controlled by the company itself, but
also by the external factors. It happens because experiences are constructed by customers’
interpretations of encounters, meaning that experience cannot be controlled by the company36.
In this case instead of creating experience, company should focus its attention on designing
and orchestrating the prerequisites, stimuli, touch points to be able to deliver the desired
experience to the customers.
3.6 Customer Journey map
A customer journey map (CJM) was firstly introduced through the Acela high-speed rail
project of IDEO in a service design in 1999. Nowadays it is one of the most widely used tool,
which helps to understand how prospects and customers interact with a company through touch
points how the organization is perceived and how company would like its customers and
prospects experiences to be37.
CJM is a diagram that illustrates the steps a customer(s) go through in engaging with a
company, whether it is a product, an online experience, retail experience, or a service, or any
combination38. A CJM provides structured visualization of a user experience providing
high-level overview of the factors influencing user experience (from the user perspective).
The creation of the CJM starts form the identifying crucial in terms of importance touch points
through diverse methods as interviewing customers, blogs, video diaries etc. Once the touch
points identified they are connected together to show the overall experience in a way visually
engaging enough to make it easily accessible39.
For the generic customer journey map, please refer to the picture below (graph 3.4).
For each of the customer touchpoints against each element of the customer journey, the
organization then needs to identify:
o An owner
36 Meyer, Christopher, Schwager, Andre (2007). Understanding customer experience. HBR. 37 Nenonen, Suvi (2008). Customer journey a method to investigate user experience. Helsinki University of Technology. 38 Richardson A. (2010). Using Customer Journey Maps to Improve Customer Experience. HBR, 39 Stickdorn M (2012). This is service design thinking”. Wiley
29
o The impact it has upon customer’s experience
o The gaps between desired and current performance
Graph 3.4 Generic customer journey mapping
Source: http://www.customerchampions.co.uk/customer-journey-mapping-cjm/
3.7 Customer journey canvas
Customer journey canvas (CJC) was introduced by M. Stickdorn and J. Schneider as a tool
for auditing existing services during the pre-service, time associated with the encounter and
post-service phases of the journey. Customer journey maps are typically focused on the front
stage encounter from the customer’s point-of-view, the example of the CJ map is presented
below in graph 3.5
30
Graph 3.5 The customer journey canvas
Source: Design for service: research, patterns and observations. http://files.thisisservicedesignthinking.com/tisdt_cujoca
31
Literature analysis on Sharing Economy or collaborative consumption
3.8 Concept of sharing instead of concept of ownership: Sharing Economy
Having set-up the understanding of the customer experience, we continue our research of
sharing economy with the concept of sharing.
According to Oxford dictionary share is a “use, occupy, or enjoy something with another or
others” or “have a portion of something with another or others” 40. Sharing is a fundamental
consumer behavior that we have either tended to overlook or to confuse with commodity
exchange and gift giving41.
According to J. Price Sharing is the most universal form of human economic behavior,
distinct from and more fundamental than reciprocity42.Author argues that cooperative
behaviors are natural and not learned from adults. Starting from childhood children are
cooperative by nature, while after the age of three, they adopt social norms and rules shaped
by the culture43. Sharing is deeply connected with the evolution of human beings44. Starting
from the ancient times humans have been cooperating and sharing the animal fur, hunting
equipment, food etc. Over the centuries due to development of speech capacity, social skills,
culture and technologies, human interaction has become more complicated and sophisticated.
The concept of sharing is natural not only for humans but also for a wild world. Animals
share their work, cooperation or resources in order to be stronger as a group, to perform better
their own work or to protect species from enemies. Looking to the ant’s behavior we can see
the division of the work among them aiming to strive and grow the population. Lions, hunting
in a group, attack a victim in a way the whole group contributes and share the food at the end.
Even though, we can see sharing mechanism in everyday life, as taking a book in library or
washing clothes at laundromat, todays the concept of sharing among humans allow us to share
in ways and on a scale that differ from the ancient time and that has never been possible before.
This is happening due to the emergence of several permanent factors which can be identified
as trends in society, for instance, sustainability, economic crisis, development of technologies,
new demographic cohort: millennials and others. To understand deeply the motivation and
40 http://www.oxforddictionaries.com/definition/english/share?q=sharing#share__12 41Belk R(2010). Sharing. The university of Chicago press and journal of consumer research. 42 Price, John A. (1975), “Sharing: The Integration of Intimate Economics,” Anthropologica, 17 (1), 3–27. 43 Tomasello M. (2009). Why we cooperate. Boston Review Book, Massachusetts Institute of Technologies. 44 Buszynski B. (2013). Sharing is good. How to save money, time and resources through collaborative consumption. New society publishers.
32
drivers of sharing in current society and its connection as well as its influence on economy, the
concept of sharing economy, its evolution and development is investigated below.
3.9 Evolution of SE concept
Sharing economy has been referred to under different terms such as: collaborative
consumption (most commonly used today along with sharing economy), access economy,
community-oriented economy, free economy, gift economy and others. All these terms
essentially point out similar things, however, to make it simply hereafter the sharing economy
(SE) term will be used.
It is worth to know and understand that the concept of “sharing economy” is not
considerably recent. It dates back to XVll century “where individual users acting independently
according to their own self-interest behave contrary to the common good of all users by
depleting that resource through their collective action”45. The term coined by William Forster
Lloyd “the commons” became widely known over a century, mainly due to another article
written by Garret Hardin in 1968 “The tragedy of the commons”46.
Following Lloyd, next reference to the concept of sharing economy belongs to Marcus
Felson and Joe L. Spaeth, the authors of the paper: “Community structure and collaborative
consumption: a routine activity approach” more precisely using the term “Colaboraive
consumption”, by which they mean those events in which one or more persons consume
economic goods or services in the process of engaging in joint activities with one or more
others47. Later, in 2007 Ray Algar in his article “Collaborative consumption” re-coins the
phrase collaborative consumption to describe the way in which the web allowed people to
connect and harness their collective wisdom to search, compare, review, select and consume a
vast array of goods and services48. The next important step in defining the collaborative
consumption was given by Rachel Bostman and Roo Rodgers in the book “What is mine is
yours: the rise of collaborative consumption”. According to its authors collaborative
consumption describes the rapid explosion in traditional sharing, bartering, lending, trading,
renting, gifting and swapping reinvented through network technologies on a scale and in ways
humans never seen before49.
45 Lloyd w. F.(1833). Two lectures on the checks to population., Oxford University, 46 Hardin G. (1968). The tragedy of the commons. ScienceN13. 47 Felson, M. & Spaeth, J.L. (1978). Community structure and collaborative consumption: A routine activity approach. American Behavioral Scientist, 21(4). 48 Algar, R. (2007). Collaborative Consumption by Oxygen Consulting. Retrieved from: Oxygen-consulting.co.uk. Leisure Report Journal. 49 Botsman, R. & Rodgers, R. (2010). “What’s mine is yours: The Rise of Collaborative Consumption”. New York, NY: Harper Business.
33
3.10 Pillars of SE
Sharing has been around forever, meanwhile as a business model, the sharing economy
according to PWC report is distinguished by the following core pillars50:
• Digital platforms that connect spare capacity and demand
• More collaborative forms of consumption
• Transactions that offer access over ownership
• Branded experience that drive emotional connection
• Understanding an economy built on trust
• Rethinking value exchanged
3.11 Motivation and drivers of SE
To understand the SE phenomenon, we look at motivation behind the sharing philosophy
and its drivers. Different researches identify factors depending on the scale of their works. We
evaluated a number of publications of leading academics in this field and compiled a table of
drivers and motivation for participation in sharing economy in the table 3.7.
Table 3.7 Drivers/motivation for participation in SE Drivers/motivations Authors
o Economic o Environmental o Social o Technophilia o Participants are ideologically committed to the
concepts of sharing and collaboration
Reish A., Thogersen J, 201551
o Environmental concern: which is the intrinsic outcome of sustainability generated through sharing, swapping, renting out, and selling used items o Sense of community: as a result of online interactions
that have made people more open to share with strangers and the fact that “social media revolution has broken down trust berries o Global recession: lower incomes encourage people to
the idea of sharing for generating savings or earnings
Latitude Research & Shareable Magazine, 201052
o Economic: more efficient and resilient use of (financial) resources; o Environmental: More efficient, sustainable and
innovative use of natural resources
“Listening to Sharing Economy Initiatives”, 2015
50 PWC (2015). The sharing economy. Consumer intelligence series. 51 Reish A. and Thogersen, J. (2015) Handbook on research on sustainable consumption. Edward Elgar Publishing. 52 Botsman, Gansky (2010) Latitude Research & Shareable Magazine. p132
34
o Community: Deeper social and personal connections among people o Cultural shift o Reduction on transaction costs o Sustainability advantages: the war against waste &
idle resources o Necessity for local resilience in times of economic
difficulties o Business interest and investments
Synthetic overview of the collaborative economy. (2012)53
o Technology o Community o Environmental concern o Global recession
The new sharing economy report. (2010)54
o Economic: economic crisis; unemployment o Social: increasing population; need for sustainability o Technological: internet becomes global; mobile
devices and platforms
Social Innovation & Cities, Prof Mario Calderini, Politecnico di Milano Laurea Magistrale program
According to different authors, diverse drivers are distinguishable for participation in SE.
Its analysis shows that the most common drivers are the followings: economic,
environmental, technological and social:
• Economic: there are several aspects of economic advantages coming from the
sharing economy concept. Firstly, economic benefits come from the possibility to
redistribute value across the supply chain, to producers and consumers, and away
from middleman. Secondly, the benefits comes from the possibility to use the
product/service which is not currently in use.
• Environmental impact: reduce the ecological impact, including carbon and
eco-footprints
• Technological: the development of ICT
• Socio-cultural: increase of social connections and build social-cultural
networks.
3.12 Socio-cultural driver. Millennials: access, not ownership
53 Synthetic overview of the collaborative economy (2012). P2P foundation. 54 Latitude: life, connected Website (2010) The new sharing economy report.
35
Millennials are the demographic cohort following Generation X and also known as
Generation Y, Generation me, Echo Boomers and Peter Pan. Demographers and researches
typically use the early 1980s as starting birth years and ending birth years ranging from mid -
1990s to early 2000s.
Millennials have come of age of globalization and technological changes, being the first
generation of digital natives, they have a set of behavior which is differ from the previous
generations. Regarding the buying process, in comparison to their parents, millennials are used
to instant access to product information, peer reviews and price comparisons. Below in the
table 3.8 you can see the features on which differ millennials are different from previous
generations.
Table 3.8 Deference between generations: Millennials, Generation X and Baby Boomers
Description Millennials Generation X Baby Boomers
The largest cohort Population 92M 51M 77M
Social and Connected: after searching online how you communicate with others about service, product, or a brand?
Text messaging 44% 32% 15% Social Media 38% 25% 11% Instant Messaging 38% 19% 8%
Blogging 16% 7% 2% Different Priorities: % of adults 18-31 married and living in their own household
Marriage can wait
23% 43% 56%
Source: extracted from: Goldman Sachs infographics http://www.goldmansachs.com/who-weare/index.html
According to the Goldman Sachs, millennials, the largest generation in the history are poised
to reshape the economy. Their unique experiences will change the ways we buy and sell,
forcing companies to examine how they do business for decades to come55.
According to author and economist Jeremy Rifkin: Millennials are turning to a new set of
services that provide access to products without the burdens of ownership, given rise to
the “sharing economy56”
55 http://www.goldmansachs.com/our-thinking/pages/millennials/ 56 http://www.futureleadersglobal.com/future-labs
36
The attitude to ownership is changing, for the millennials, the last researches shows that not
even for half of the population now is extremely important to have their own house, only 15%
would extremely need to have their own TV and only 10% would prefer to own a luxury bag
(please refer to the data below).
Source: extracted from: Goldman Sachs infographics http://www.goldmansachs.com/who-weare/index.html
Graphs 3.6 How important is it for Millennials to own the followings?
Source: Extracted from Goldman Sachs http://www.goldmansachs.com/our-thinking/pages/millennials/
10%
30%
25%
25%
10%
Luxury Bag
Extremely important
Important, but not priority
No intend to purchase onein near future
Do not feel strongly about it
Indifferent
40%
30%
15%
8%7%
House
Extremely important
Important, but notpriority
No intend to purchaseone in near future
Do not feel stronglyabout it
Indifferent
15%
30%
20%
20%
15%
TV
Extremely important
Important, but not priority
No intend to purchase onein near future
Do not feel strongly about it
Indifferent
37
As far as there is no scientific researches regarding this issue, the summary of the features and
characteristics which differ millennials from other generations has been made mainly based on
existing articles of internet bloggers and is provided below in the table 3.9.
Table 3.9 Features/characteristics which differ millennials from other generations
Millennials’ features/characteristics Description Different values They want to be flexible in terms of schedule,
financial and geographically independent. Millennials have no problem in changing jоbs or even their majоrs, they are leaving their jоbs at triple the rate of nоn-millennials. They are not looking for stability, instead for financial independence and flexibility to travel.
Lack of interest in material things In comparison with previous generations, Millennials prefer to not spend money on things that will tie them. There is no point to buy a house if there is a chance to move in the next few years for a new job.
Depreciation Physical purchases are going to be depreciated in price over time, experiences instead will have the same value no matter how long ago it was.
Buying things causes worry After buying things, especially the expensive once, we are getting worry about their condition. Car stretched can cause a lot of worries to its owner, meanwhile nobody can ever steal or ruin your life experience.
Experience helps making friends
From psychological point of view, people around us are not enjoying to listen about how many things we bought this year, meanwhile they do enjoy to listen about the experience we went through. For millennials experience worth much more than the material products.
Different concept of success To be successful you should invest in experiences instead of ownership of things57. Success people don’t buy property – they rent or share.
Source: various blogs and publishing companies: Fortune, gosocial.co, Thriveglobal journal, David Wolfe blog.
57 http://www.futureleadersglobal.com/future-labs
38
3.13 Sharing economy as a new economic paradigm
In order to identify the place of sharing economy in today’s world and to establish the solid
ground, the collective ingenuity map has been proposed by PNB Paribas.(the map is analysed
bellow as well as represented in the graph 3.7).
According to the report, collective ingenuity map incorporates five elements that comprise
it, the so-called new economic paradigms58, which includes the followings:
• co-creation: all the stakeholders in the eco-system, i.e. individuals, companies,
institutions, etc. – cooperate to co-develop solutions to problems facing our societies
that they could not resolve alone.
• maker-movement: everyone has the capacity and the means to create (fab lab,
DO It Yourself, 3D printers, etc.).
• circular economy: producing and consuming in a sustainable way, avoiding
waste and reusing resources as much as possible.
• sharing economy: a rationale of sharing among individuals and/or companies,
based on access rather than ownership. It is suggested to divide SE into the followings:
❖ B2B sharing. Pooling the resources of several companies in order to
make production cheaper and more efficient;
❖ Self-service. Giving users or customers freedom to acquire the products
or services they want.
❖ peer-to-peer (P2P). A system of information bartering on the internet
and a way of equitably distributing influence within the group;
❖ collaborative consumption. An economic model in which use is more
important than the ownership.
Among the mentioned above types of sharing economy according to existing literature the last
one was investigated much deeper than the others.
3.14 Types of CC
One of the important steps in defining the collaborative consumption was given by Rachel
Bostman and Roo Rodgers in the book “What is mine is yours: the rise of collaborative
consumption”, 2010.
58 PNB Paribas, 2014. How collective ingenuity is changing the world.
39
According to authors CC describes the rapid explosion in traditional sharing, bartering,
lending, trading, renting, gifting and swapping reinvented through network technologies on a
scale and in ways humans never seen before59. The authors give light to the thousands of
examples of collaborative consumption from around the world and they organize them into
three systems: product service systems (PSS), redistributions markets and collaborative
lifestyles. The CC types with their description and examples are summarized in the table 3.10.
59 Botsman, R. & Rodgers, R. (2010). “What’s mine is yours: The Rise of Collaborative Consumption”. New York, NY: Harper Business
40
Graph 3.7 Collective Ingenuity Map
Source: PNB Paribas, 2014. How collective ingenuity is changing the world.
41
Table 3.10 Types of Collaborative consumption (CC) Type of CC Description Example
Product service
system
Is based on a “usage mindset” Customer pay for the
benefit of a product without needing it outright.
Usage based:
• With high idling capacity
• Limited use because of fashion
(handbags)
• Temporary need (baby maternity
products)
• Value loss after usage (movies)
High entry costs (solar)
Extended life PSS:
• Products that are expensive to acquire or
require expertise to repair (electronic goods)
Products that need frequent update
Like nikesharing and
carsharing,
Usage based:
-cars, household
-handbags
-baby maternity
products
-movies
Extended life PSS:
-electronic goods
Redistribution
system
Used or pre-owned goods are redistributes from where they
are not needed to somewhere or someone where they are
Big market places;
Free exchanges sites for
books
Collaborative
lifestyles
Sharing and exchange of resources and assets such time,
food, space, skills, and money.
Couchserfing and the
lending Club
Source: extracted from the book “what is mine is yours: the rise of collaborative consumption”.
3.15 New dimensions of sharing. According to the research made by Latitude, the
classification is based on the main dimensions of sharing as life style, community design and
currency60.
Life cycle.
• Synhronus: a cyclical system of access where members rent or borrow goods,
then return them to the central pool for other members to access (Netflix).
• Asynchronous: a redistribution system where items are passed off – gifted,
traded, bartered, or resold – from one owner to the next so that they can be reused.
• Collaborative: simultaneous collaboration to achieve a shared goal; involved
joining resources like money, time or specialized knowledge (similar models were
suggested before by Botsman and Rogers in their book, in the latter chapters will be
presented).
Community design.
60 Latitude (2010). The new sharing economy report.
42
• Centralized: sharable assets are owned by a single which provides access to
members. All members are renters/borrowers.
• Peer-to-peer: members pool their own assets to share amongst other members.
Owners/lenders and renters/bowers.
Currency
• Traditional: money
• Alternative: knowledge, skills and services, material items, time, reputation and
social reach.
Graph 3.8 Dimensions of sharing: Life cycle, community design and currency
3.16 Collaborative economy honeycombs
Another way to look at different types of collaborative consumption is to divide them
according to the field where they are explored. In this way different number of categories can
be proposed. As an example we will look at 2 similar approaches proposed by crowd service
company Mila and Jeremiah Owiang . The first one suggest to divide CC into the 5 categories
as: goods, service, money, space, transportation (graph 3.9).
43
Graph 3.9. Five categories of Collaborative economy
Meanwhile another approach suggests much more detailed division: learning, municipal,
money, goods, health &wellness, space, food, utilities, transportation, services, logistics,
corporate (see the graph 3.10)
44
Graph 3.10 Twelve categories of CC
Source: Collaborative Economy Honeycomb: version 2
45
Chapter 4. Sharing economy in transportation field: Shared Mobility
4.1 Shared mobility as a part of sharing economy
In the next 10 years according to the
projections made by different qualifies
agencies61 among the five main sharing
economy sectors, the transportation one
will occupy the biggest place, thus
making it one of the most promising
sectors for investment opportunities.
Fast development of Information
technologies and creation of new
business models made possible to provide
people new variety of transportation with
the implementation of connected
services. It became convenience to request
a car-sharing via the smartphone or laptop,
to share a ride with a co-worker, or even to grab a bike outside your home. This trends are
shaping the collaborative consumption in a transportation field, more precisely through shared
mobility. Shared mobility is defined as an innovative transportation strategy that enables
users to gain short-term access to transportation modes on as-needed basis.
Shared mobility means the shared use of a vehicle, bicycle, or other low-speed mode
that enables users to have short-term access to transportation modes on an “as-needed”
basis. Shared mobility includes carsharing; personal vehicle sharing (including peer-to-
peer/P2P carsharing and fractional ownership); bikesharing; scooter sharing; shuttle services;
carpooling and vanpooling; ridesourcing/transportation network companies (TNCs)—also
known as ride-hailing; microtransit; and courier network services (CNS)62. It may also include
alternative transit services, such as paratransit, shuttles, and private transit services.
61 https://www.marsdd.com/news-and-insights/ride-sharing-the-rise-of-innovative-transportation-services/ 62 Transportation Sustainability Research Centre (2015). Shared mobility: Definitions, industry developments and early understandings. University of California, Berkley.
Graph 4.1 PWC (2016). Sharing economy sector and traditional rental sector projected revenue growth. PWC
46
4.2 Evolution and expansion of OEMs’ mobility services as part of shared mobility
Fast development of Information Technologies pushed car manufacturers to move from the
business of manufacturing and selling vehicles to the provider of related services and multi-
modal mobility solutions. Thus, they became able to target also the new customers and to proof
their future business. The evolution of OEM’s mobility services currently consists of the 3
following stages: Car ownership ->Car services ->Car independent. These 3 main stages are
presented on the graph below:
Graph 4.2 Evolution and Expansion of Mobility services: the services in the red frames
belong to the shared mobility services
Source: Extracted and compiled by author from Intelligent Mobility 3.0. Future of mobility & New mobility Business Models. Frost& Sullivan, 2015 MB85-18
The main categories of shared mobility services are located on the 2nd and 3rd stages of
evolution of mobility services and include: integrated mobility, car on demand, ridesharing and
carsharing, and they are going to be presented below.
47
4.3 Shared mobility service categories
Shared mobility services generally are divided into 4 categories:
o Integrated mobility
o Car on demand
o Ride-sharing
o Car sharing
Below, on the graph 4.3 the shared mobility services with the examples of brands belonging to
each category are presented.
Graph 4.3 Shared Mobility Service Categories
Sources: extracted and compiled by author from Shared Mobility: Definitions, Industry, developments and early understandings (2015), University of Berkley; Frost& Sullivan, (2015). Intelligent Mobility 3.0. Future of
mobility; New mobility Business Models. MB85-18
4.3.1 Integrated mobility. We refer to integrated mobility when
more than one means of transport is marketed in the form of a
cooperation of several service providers. Today we observe the trend
towards the integrated mobility services: from mono-Graph 4.4 Integrated mobility brands
48
modal habits to an inter- and multi-modal lifestyle geared towards flexibility, convenience and
affordability63.
This kind of service is designed for the following groups of customers:
1. People who want to have access to a range of transport suppliers, the so-called multi-
optional availability, to able to choose the means of transport most suited for destination/aim
o trip (for different outings a day either tram or car-sharing vehicles).
2. People who want to use several means of transport in the so-called intermodal trips:
(rented car and train on one journey)64. Graph 4.4 visually represents the groups of people and
their choices.
Graph 4.5 Integrated mobility: From mono-modal habits to inter& multi-modal lifestyle
The main enabler of the integrated mobility services is the fast development of the
Information Technologies, which allows users to plan the trip route using the variety of
transportation and the possibility to pay online. Regarding the customer journey, as an example
of integrated mobility services, it can be presented by the following steps: “Planning-next one-
metro-eCar sharing- advanced parkig-car2x – new bus services and billing. The detailed
customer journey is shown below in the graph 4.6
63 Vincent M (2015). Integrated mobility. Siemens 64 Transport and Environment (2000) New, integrated mobility services. National Research Program NRP 41.Bern
Mono-modal habits Inter & Multi-modal lifestyle
49
Graph 4.6 Integrated mobility: example of customer journey65
Source: Vincent M. (2015). Integrated mobility. Siemens
Currently there are many different companies which are involved in the integrated mobility solution, as OEMs, leasing companies, travel management companies, car rental companies and others. The detailed description of them is presented on the graph 4.7.
Graph 4.7 Integrated Mobility Landscape
Source: Intelligent Mobility 3.0. Future of mobility; New mobility Business Models. Frost& Sullivan, 2015
65 https://ww2.frost.com/files/4214/3620/7699/Matthew_Vincent_-_Integrated_Mobility_FrostSullivan_June_2015_final-v3.pdf
50
4.3.2 On demand ride services (Car on demand)
Car on demand (Taxi) is a motor vehicle licensed to
transport passengers in return for payment of a fare and
typically fitted with a taximeter. The global car in demand
market is expected to reach 5 million vehicles by 2020 (growing
at a CAGR of 4%).
On-demand ride-services include the followings
transportation options:
• Ridesourcing or transportation network companies (TNCs):
Ridesourcing or TNC services use smartphone apps to connect community
drivers with passengers. This transportation option has a variety of names,
and can be also called as ride- hailing, and ride-booking.
• Ridesplitting: it involves splitting a ridesourcing/TNC-provided ride with
someone else taking a similar route. As an example, Lyft and Uber match
riders with similar origins and destinations together, and they split the ride
and the cost.
• e-Hail services (Taxis). Taxis can now be reserved by an “e-Hail” Internet or
phone application maintained either by the taxi company or a third-party
provider. According to Frost& Sullivan, e-hailing is dramatically increasing,
by 2020 the global taxi market is expected to reach 5 million vehicles growing
at CAGR (Compound annual growth rate) of 4% 66.
66 Frost& Sullivan (2015) Intelligent Mobility 3.0. Future of mobility; New mobility Business Models. MB85-18
Graph 4.8 Car on demand brands
51
Graph 4.9 Global on demand ride services market, 2016
Source: Frost& Sullivan (2015) Intelligent Mobility 3.0. Future of mobility; New mobility Business Models. MB85-18
4.3.3. Ride sharing. Ridesharing is the sharing of vehicles by
passengers to reduce vehicle trips, traffic congestion and
automobile emission. This kind of shared mobility facilitates
shared rides between drivers and passengers with similar
origin-destination pairings, it includes67:
o Vanpooling: grouping of 7 to 15 people commuting
together in one van.
o Carpooling involves groups from 2 to 7 people
travelling in one car together.
Rideshearing companies can be categorized into two following main groups based on their
business models68:
o Platform-based ride-sharing: companies that coordinate rides through a platform,
such as Uber, Lyft and BlaBlaCar.
o Inventory-based ride-sharing: companies that own assets, like fleets of cars or bikes,
that are shared among users, such as Bike Share Toronto, car2go and Zipcar.
67 Chan N., Bansal A., Cohen A. (2015). Shared mobility. Definitions, Industry Developments, and early Understandings University of California Berkley. 68 Armstrong E. & S. (2016). Ride-sharing: the rise of innovative transportation services. Connected world Market Insight.
Graph 4.10 Ride-sharing brands
52
Graph 4.11 Comparative market positioning of Ridesharing business model
Source: Frost& Sullivan (2015) Intelligent Mobility 3.0. Future of mobility; New mobility Business Models. MB85-18
There are already more than 23 million rideshare members in Europe, according to estimations
made by Frost& Sullivan, globally by 2025 is expected more than 132 million ridesharing
members.
4.3.4. Car sharing. Individuals gain the benefits of
private vehicle use without the costs and responsibilities
of ownership: rather than owning one or more
vehicles, a household or business accesses a fleet of
shared vehicles on an as-needed basis. The main types
of car sharing models are summarized and presented
in the table below.
Graph 4.12 Integrated mobility brands
53
Table 4.1 Carsharing models
Carsharing models
Roundtrip
What & How it works: Roundtrip carsharing, the earliest carsharing service model, allows members hourly access to a fleet of shared vehicles. Users must return vehicles to the same location from where they were picked up. The cost of using carsharing is a combination of annual or monthly fees, as well as time and distance costs.
Advantage: Roundtrip carsharing reduces the number of vehicles on the road, VMT, GHG emissions, and transportation costs for individuals.
One-way
What & How it works: One-way carsharing allows members to pick up a vehicle at one location and drop it off at another.
Advantage: One-way carsharing can allow increased flexibility and has the potential to further enhance first- and last-mile connectivity.
Personal
vehicle
sharing
(PVS)
What & How it works: Carsharing service model characterized by short-term access to privately-owned vehicle. Members access vehicles through a direct key transfer from the owner to the renter or through operator-installed in-vehicle technology that enables unattended access. There are 4 distinct models of PVS (they will be described below):
• P2P Carsharing • Hybrid P2P-traditional Carsharing • P2P marketplace • Fractional ownership
Source: N. Chan, A. Bansal, A.Cohen (2015). Shared mobility. Definitions, Industry Developments, and early Understandings University of California Berkley.
Personal vehicle sharing (PVS) models69:
• P2P Carsharing: Peer-to-peer carsharing employs privately-owned vehicles or
low-speed modes made temporarily available for shared use by an individual or members
of a P2P company. (Examples: RelayRides, Getaround, and FlightCar.)
• Hybrid P2P-traditional and P2P marketplace: individuals access vehicles or
low-speed modes by joining an organization that maintains its own fleet, but it also
includes private autos or low-speed modes throughout a network of locations. P2P
69 Chan N., Bansal A., Cohen A. (2015). Shared mobility. Definitions, Industry Developments, and early Understandings University of California Berkley.
54
marketplace enables direct exchanges among individuals via the Internet, including
pricing agreements.
• Fractional ownership model: individuals sublease or subscribe to a vehicle
owned by a third party. These individuals have “rights” to the shared vehicle service in
exchange for taking on a portion of the operating and maintenance expenses. This enables
access to vehicles that individuals might otherwise be unable to afford, and it results in
income sharing when the vehicle is rented to non-owners.
The Global carsharing market is expected to grow from 7,9 million members and 11,846
vehicles in 2015 to 36,37 million members and 427, 129 vehicles by 2025 (16,4 and 14,3%
respectively)70. The Global carsharing market is expected to grow from 7,9 million members
and 11,846 vehicles in 2015 to 36,37 million members and 427, 129 vehicles by 2025 (16,4
and 14,3% respectively)71.
Carsharing operators expected to expand their activities into new countries and cities, in
addition having in future stronger support by favorable policy initiatives. From the
sustainability point of view, it has been estimated that car sharing could potentially remove
around 5.33 million vehicles from the roads by 2025, thus saving of 10,46 million tons of CO2
emission and 885,92 km in passenger’s travel. Regarding the geographical aspect, currently
Europe is leading the carsharing market with a 197 carsharing operators versus 40 in America
and 39 in Asia-Pacific and Africa. Key findings of European carsharing market 2015 are
summarized in the table 4.2
Table 4.2 Key findings of European carsharing market 2015
Key finding Description
Number of carsharing operators 197
Number of shared vehicules 50,041
Key carsharing opearators Car2Go, Autolib, Flinkster, Cambio Carsharing, DriveNow
Market leader Germany: 1.256 million members
Source: Frost & Sullivan (2016). Future of carsharing market to 2025. Frost & Sullivan
70 Frost & Sullivan (2016). Future of carsharing market to 2025. 71 Frost & Sullivan (2016). Future of carsharing market to 2025.
55
Graph 4.13 Car sharing market: top 10 countries, Global, 2015
Source: Frost & Sullivan (2016). Future of carsharing market to 2025
4.4 Carsharing and Millennials
As has been mentioned in the previous chapter, millennials are much deeply involved in the
sharing economy than previous generations. It is related to the different types of collaborative
consumptions, including shared mobility.
Source: Goldman Sachs infographic
Graph 4.14 Willingness to car share in Europe, 2016
56
Thus, globally, according to the Goldman Sachs research, 35% of millennials are willing to
car share, while among the generation X and Baby boomers only 17% and 7% respectively
prefer car sharing. In Europe the situation is slightly different, meanwhile we observe the same
trend, please refer to the graph 4.15.
According to the latest researches, the
growing percentage of older millennials
are choosing to rent, not to buy.
As has been mention before, the attitude
to ownership is changing, for the
millennials, the last researches shows
that only for 15% of population is
extremely important to own the car, meanwhile the quarter of population stays indifferent.
(Please refer to the graph 4.15)
Graph 4.16 Hierarchy needs: how important it is to own the car, 2013
Source: Goldman Sachs (2013). Fortnightly Thoughts intern survey. Business Insider.
Millennials were growing up during the time of technological change, globalization and
economic disruption, the must-haves for previous generations aren’t as important for
millennials, they are putting off major purchases – or avoiding them entirely.
Source: Goldman Sachs infographic
Graph 4.15 Millennials: renters, as a percentage of total population, 2005-2013
57
4.5 Case study: BlaBlaCar
BlaBlaCar belongs to the shared mobility concept,
in particular to ridesharing. It is a world’s largest long-
distance ridesharing company, with more than 40 million
members and 600 employees across 22 countries72, with
more than more than 21 million mobile app downloads
(iPhone + Android)73.
BlaBlCar was conceived in 2003 by Frederic Mazzella
and founded in 2006. BlaBlaCar connected drivers and passengers willing to travel together
between cities and share the cost of the journey.
Graph 4.17 Growth of BlaBaCar members 2008-2015
Source:
Frost& Sullivan, (2015) Intelligent Mobility 3.0. MB85-18
BlaBlaCar members should register themselves via web-portal and create a personal online
profile, where will be shown the ratings, reviews by other members, social networks
verification, rate of response, the number of members they interacted in relation to car-pooling,
as well as they willingness to chat during the trip.
BlaBlaCar scheme is easy to understand. It is important to mention that in the BlaBlaCar
case we have two groups of customers: drivers and passengers. Below we analize the details
of both.
72 https://www.blablacar.com/about-us 73 https://www.linkedin.com/company/blablacar
BlaBlaCar profile Established December 2006 Company HQ Paris, France Member base global 40 million
Key markets Europe, India
Table 4.3 BlaBlaCar profile
Source: Compiled by the author able X BlaBlaCar profile
58
Drivers: Once a driver decides to use BlaBlacar, he/she needs to register online: via email
address or Facebook. After signing-up, he/she should complete profile in order to increase the
chances of carpooling, verifying also the phone number and adding a profile photo. As a next
step, driver should upload the proposal for the upcoming trip, clarifying its date, time and
location, price, number of passengers available, and other preferences, such as: with/without
luggage, level of chatting, etc. While the driver receives the notification from passenger via
the web-platform/app, regarding the willingness to share the ride, he/she may accept or decline
it. If case of positive reply, driver will meet passenger at mentioned before place and time. The
cost of the trip will be sent to the driver by the end of the trip, as well as his rating will be
published at his own profile.
Passengers: Once a passenger decides to use BlaBlaCar, he/she needs to register online: via
email address or Facebook and after signing-up, he/she should complete the BlaBlaCar profile.
While the passenger decides to go for a trip, he/she goes to the BlaBlaCar web-portal searching
for the available proposals from drivers, evaluating also his/her personal preferences, such as
level of chatting, smoking/non-smoking etc. When the suitable proposal is found, the passenger
contacts the driver, and if both are agreed to go for a trip together, they are going to meet at the
proposed by the driver time and date. The cost of the trip is going to be automatically deducted
from the passenger account.
4.5.1 Business model
Key partners are driver (a customer willing to share his car for a journey) and payment
agencies ( such as Paypal and iDeal).
Key activities74: BlaBlaCar ensures trust within the community; keeps running the web-site
and app infrastructure, as well as improves their performances in order to deliver the best
possible experience for both types of customers: drivers and passengers.
Value proposition: Save money - meet new people - save CO2.
passengers are able to find the rides and drivers are able to share their cars using the web
platform/app. At the same time, this kind of experience facilitate the social interaction, enabling
to build a friendship, along with the environmentally friendly approach t save the planet by
eliminating emission of CO2.
Customer segments: B2C. Drivers who have a car and want to share it saving money not
travelling alone and passengers, who also want to save money having interesting social
74 https://prezi.com/pyzebtrw_g4y/business-model-canvas-blablacar/
59
experience. It is important to mention that the 3rd category of customer segment consist of the
people for whom the environmental benefits are very important.
Revenue streams. New countries: BlaBlaCar entry fee is freeuntil critical mass is
accomplished. For the countries which are established flat rate is 10-15% of trip price. A path
of 100km cost average €6.
4.5.2 Customer journey75.
Alex wants to share his city-to-city car journey. He
creates his own profile via BlaBlaCar web-portal/app,
and publish the date and the detail of his trip. The app
automatically calculates the contribution by the
person.
Kate, Stephane and Mike want to take the same trip as
Alex, but they are concerned about the kind of
transportation: train, car or a bus? Instead of those
options they decide to use BlaBlaCar.
They register themselves via the BlaBlaCar portal/app,
find a proposed by Alex journey and request to share
the ride. Alex receive request for the ride and accept it.
Kate, Stephane and Mike enjoy the comfort of the car
and Alex enjoy the cost split of the journey, while
having fun during the trip. After the journey they all
give a rating to each other to build a trust and
reputations of BlaBlaCar among community. The cost
is automatically deducted from the passenger’s profile and partially goes to driver’s account
and to BlaBlaCar company.
75 Extracted and compiled from the official BlaBlaCar video: How Does BlaBlaCar Work? | BlaBlaCar UK https://www.youtube.com/watch?v=0hKH4zmTX2U
60
Table 4.4 Customer journey: Pre service phase. BlaBlaCar vs Car ownership
Source: compiled by the author
61
Table 6.5 Customer journey: During & Post Service phases: BlaBlaCar vs Car ownership
Source: compiled by the author
62
4.6 Case study: Uber
Uber belongs to the shared mobility concept, in
particular to car on demand service. The name "Uber" is
a reference to the word "uber", which means "topmost"
or "super", and having its origins in the German word
über, meaning "above”. It is a world’s famous
transportation network company, operating in 570
cities worldwide. The types of available cars include uberX, Taxi, Black, SUV and LUX. The
most affordable option is UberX, which directly compete with traditional e-hail services (taxi).
The number of the rides made by the Uber is increasing dramatically, gaining 1.1 billionth ride
in 2016. (Please refer to the graph 4.18)
Graph 4.18 Uber on the rise nationwide. Jan. 2014-March 2015
Source: Certify SpendSmart™ Report, Fourth Quarter, 2016
It is important to mention that while Uber ride’s number increases, it directly correlates with
taxi ride decrease (Uber’s direct competitors), however car rentals stays relatively consistent
(see graph 4.19).
Uber profile Established March 2009
Company HQ San Francisco, California
Rides global 1,1 billion Key markets US, Europe, India,
Table 4.6 Uber profile
Source: compiled by the author able X Uber profile
63
Graph 4.19. Uber vs Taxi vs Car rental
Source: Certify SpendSmart™ Report, Fourth Quarter, 2016
In Uber case, as well as in the BlaBlaCar case, we should refer to two different kind of
customers: drivers and passengers. Passenger and driver’s journey interacts, however, further
on we are going to focus only on passenger journey, due to the fact that in this particular case
only the passenger has a need to need to move from point A to point B, meanwhile role of
driver is just to enable his journey. At the same time, referring to BlasBlaCar and Zipcar cases,
both groups and passengers and drivers have the need to move from point A to point B. From the passenger point of view, he/she should be registered on the web-portal/app, with
completed profile, and added credit card. While passenger wants to request the ride, he checks
availability of Uber cars nearby via app/web-platform, having also the access to the detailed
profile of the drivers. When the ride has been choosing a passenger checks the app on his/her
smartphone to see where the driver is and how long would it take to come by the requested
area. The driver brings passenger from point A to point B, while the trip payment goes
automatically via online system.
4.6.1 Business model.
Key partners are drivers, payment processors and map data providers.
Key activities: Uber maintains day-t-day operation regarding company run as well as keeps
developing and improving its platform to ensure positive experience from both ends:
passengers and drivers. To ensure adequate supply of drivers Uber is focused on marketing
activity at global and local levels.
64
Value proposition: to be always able to give a passenger ride when he/she needs it, at a
minimum cost (in comparison with their direct competitors, such as taxi), with a reduced
uncertainty (clear cost (i.e price surge) and trip details).
Customer segments: As has been mentioned before, Uber has 2 groups of customers (drivers
and passengers), meanwhile we are focusing only on passengers. It is important to mention that
Uber’s passengers have to have a credit/debit card and a smartphone, otherwise they are not
able to use the platform services.
Revenue streams. Uber moves the traditional taxi meter from the car to its servers – tracking
via GPS technology in the phone – and then charges the passenger based on the miles travelled
and whatever surge multiplier is in effect. If the passenger uses a different Uber brand the same
process applies but with different pricing76.
4.6.2 Customer Journey
Friday night Timothy is looking for the way to get
home from the pub. He decides to use Uber. He
downloads the app and register himself at the
platform, adding his credit/debit card to his profile.
He checks the available Uber cars nearby and send
the request to the driver. When the driver accepts the
request, Timothy can call him back to confirm the
request and trip details.
Driver arrives and brings Timothy to his home, while
the cost of the trip is automatically deducted from
Timothy’s credit/debit card. He can also see the
details of his trip via app/web platform and give a
rating to the driver contributing to building of a trust
community.
76 http://businessmodel.guru/the-uber-business-model-canvas/#BMC
65
Table 4.7 Customer journey: Pre service phase. Uber vs Car ownership
Source: compiled by the author
66
Table 4.8 Customer journey: During & Post Service phases: Uber vs Car ownership
Source: compiled by the author
67
4.7 Case study: Zipcar
Zip car belongs to the shared mobility concept, in
particular car sharing: one-way car sharing (point-to point
car sharing).
Zipcar is the world’s largest station-based operator
with 950,000 members in over 50 cities; its growth
strategy in 2015-16 has been to capitalize on Avis’
franchise locations and target cities for piloting its one-
way service.
Zipcar was co-founded by Antje Danielson and
Robin Chase based on existing German and Swiss companies in January 2000. In June 2000,
the first Zipcars hit the road around Boston, Massachusetts. Zipcar was acquired in 2013 by
Avis Budget Group (100%). After acquisition in 2013, the full year accounts showed $280
million revenue with 6% EBIT margin, 1.2% net margin.
Graph 4.19 Member and vehicle Zipcar growth, global 2009-2015
Source: Frost & Sullivan: Future of car sharing market to 2025, August 2016
Zipcar profile Established January 2000
Company HQ Boston, Massachusetts, US
Member base global 950,000
Key markets US, UK, Canada, Australia
Table 4.9 Zipcar profile
Source: Compiled by the author
68
In 2015, Zipcar member were more than 950, 000 using 12,000 vehicles in mora than 50
cities (see graph 4.20). Zipcar fleet offers more than 50 models of vehicles, including Audi,
BMW, Mini Coopers, pickup trucks, Prius Hybrids, and
others.
Each vehicle has a home location: a reserved parking
space located on a street, driveway, or neighborhood
parking lot in the member's area, to which it must be
returned at the end of the reservation. The locations of all
Zipcars and models available at those locations are available
at the Zipcar website. Parking spaces are negotiated with
private or public locations, which is a key factor of the
business model (price/location).Regarding the Zipcar fleet,
in 2016 it had a fleet of nearly 10,000 vehicles.
Cities/location o Zipcar is now present in 40 states and 100 locations
and in set to launch its One>Way service in Los Angeles, Philadelphia, Denver, and
Providence.
o European expansion was initially through acquisition in Spain (Avancar), Austria
(Denzel), and the UK (Streetcar) and it is now focused on Avis’ franchise locations: France
(15 locations), Germany (1), Turkey (1) are new markets. London is Zipcar’s largest
European market (approximately 1,800 cars).
4.7.1 Zipcar business model77
Zipcar scheme is easy to understand. Once a customer decides to use the services of this
company, he/she needs to register online. There are 2 types of Zipcar usage: one time or pre-
pay membership. When a customer needs a car, he/she checks online via website or app, as
well as making a call to find the nearest location of car regarding his/her geolocation. Once the
chosen car is confirmed upon booking, its information and location are sent to the user. The
customer finds the car and texts the received code to unlock it and drives off for his/her business
ventures. Once the activity is completed, a user decides where to leave a car: either on a
specified Zipcarpark or any other parking lot by notifying company of car’s location. Graph
4.3 illustrates visually how the Zipcar works.
77 Funk J. (2013) Associate Professor at National University of Singapore. Business Models. Slide share
Source: Frost & Sullivan (2016): Future of car sharing market to 2025
Table 4.10 Zipcar Business model
69
Graph 4.21 How Zipcar works
Zipcar Services
Zipcar provides the following services to its customers:
o Comprehensive payment plan: petrol, insurance, parking and usage are included;
o Coverage car are widely located
o Flexibility: pay per use, reserve as last 15 mins before usage
o Convenience: pick up the vehicle, as per desired location.
Value proposition
o Ease and convenience. Zipcar’s efficient technology platform: 24/7 services, easy to
use and extra convenience (free parking, no fuel charge)
o Comparable and competitive costs. High cost of having and maintaining a car. Taxi
prices and availability are usually inconsistent, overcrowded public transport, high
fixed prices per day car rental companies.
Zipcar’s potential customers
Zipcar’s potential customer is located in the intersection between cost oriented customer and
convenience oriented customer, visually it is presented below.
Graph 4.22. Zipcar’s customer
Source: Jefrey Funk. Business Models. Slideshare
70
Revenue stream
The main revenue stream channels are the occasional drivers, preferred customers and
priority customers, including the one time membership fees (for Zipcard and credit of 35$),
please refer to the table below.
Table 4.11 Zipcar revenue stream
Source: Source: Jefrey Funk. Business Models. Slideshare
Operations management
Regarding the design and control of the process of service delivery, the Zipcar involves the
following four aspects: fleet, technology team, car servicing and frontline crew. The
visualized operational process for those aspects is shown below.
Graph 4.23 Zipcar: Operation management scheme
Source: Jefrey Funk. Business Models. Slideshare
Scope of activities: business collaborations
In order to successfully run the business, Zipcar is collaborating with external partners, among
which are the parking providing companies, petrol suppliers, malls and insurance providers.
Please refer to the picture below to better understand their role.
71
Graph 4.24. Zipcar: Business collaboration
Source: Jefrey Funk. Business Models. Slideshare
4.7 2 customer journey
Olivia wants to meet her friends which are gathering in the other part of the city.
Considering different types of transportation, she chooses for a first time to use car sharing:
Zipcar. The simplified customer journey of Olivia’ Zipcar trip is presented below.
1. Join Zipcar: Olivia is signing – up
through the app or online at zipcar.be. She needs
only: ID, driving license and credit card. Once it
approved, the Zipcar will arrive at her post.
2. Olivia now can find and unlock the car via
Zipcar app, once the car is founded, she can book
the car.
72
3. After booking, the Zipcar will be booked
for 15 minutes, which is supposed to be enough
time to reach the car. During this 15 minutes is
possible to cancel booking for free.
4. Once Olivia arrived, she can unlock the
door via the Zipcar app or by holding the Zipcar
by the driver side of the screen reader.
5. Olivia finds a keys inside the car. Before
starting the trip, she takes a look at the Zipcar in
order to check the damages, if she founds some,
she adds them into the damage booklet. She starts
the trip, if she wants to fuel she can use the credit
card, the fuel is on Zipcar.
6. When she wants to finish the trip, she
checks via the app where the closest Zipcar zone
is and locate vehicle there (as a confirmation she
sees the grey sign on the vehicle and confirmation
coming through the smartphone.)
7. She locks the door the same way as she
unlocked it. Then, the trip is finished and the
payment goes automatically from the credit card.
73
Table 4.12 Customer journey: Pre service phase. ZipCar vs Car ownership
Source: compiled by the author
74
Table 4.13 Customer journey: During & Post Service phases: ZipCar vs Car ownership
Source: compiled by the author
75
Chapter 5. Result of the research & Future investigations
As has been mentioned before, in our research initially we applied as a theoretical base the
qualitative, exploratory way to build theory from case study research. The purpose of our
research was to analyze the nature of sharing economy, as a socio-cultural model and the nature
of customer journey, in order to collect insights and information that can enable us to find out
the way customer journey has been influenced by sharing economy.
To explore the sharing economy phenomenon in relation to customer journey we identified
the research question: Does customer journey has been influenced by the emergence of new
socio-cultural paradigm: sharing economy. If so, how it has been shaping customer experience
in a shared mobility field?
The process of inducting the theory applying case study research took us through different
steps of research development including: literature analysis, selection and conduction of cases
studies, analysis of cases studies and brought us to the results and future developments.
In order to finalize our research and to answer the research question, we are going back to
the case studies. At the final part of each case study we were applying customer journey canvas,
comparing CJ of different types of shared mobility with the classical car ownership customer
journeys. (Please refer to the tables: 4.5; 4.6; 4.7; 4.8; 4.12; 4.13.) The customer journey canvas
was introduced by M. Stickdorn and J. Schneider as a tool for auditing existing services during
the pre-service, time associated with the encounter and post-service phases of the journey.
The result showed us that shared mobility customer journey differs from the classical one
especially in the “before” the journey phase. It is obvious that this phase plays predominant
role regarding the customer touch points in a shared mobility field, while it almost absence in
a classical ownership journey. To support our observation, we refer to the research conducted
by McKinsey78: according to the existing trend, most consumer are engaged in a more circular
journey, rather than linear. That means that regarding our research question, we can say that,
yes, the customer journey has been influenced by the evolving socio-cultural model: sharing
economy, in the way of differently shaping customer journey experience, making it more
circular. This shows us the new way to conceptualize the customer journey, and can be explored
in further investigations as a valuable input to capture the value for the customers in order to
78 Szmigin I and Piacentini M. (2015). Consumer behavior. Oxford University Press
76
create exceptional customer experience, where all the phases of customer journey are delivered
seamlessly across all the touchpoints and in a consistent way.
It is important to mention, that during our research, we also observe 2 interesting issues,
which may refer to the driver of customer buying preferences (why do they choose sharing
instead of owning):
1. Millennials prefers to get the access to the product instead of ownership.
2. Millennials prefer to buy experience, not things. Experience itself, as well as the
anticipation of the experience brings the higher level of happiness versus the fact
of ownership79. Waiting for the experience elicits more happiness and excitement
than waiting for a material good.
Value of the research & future development.
With our research we have been able to show the influence of shared mobility on the
customer journey. The success of customer experience depends on the sum of all interactions
and experience along the customer lifecycle, requires a complete, robust customer experience
solution that delivers consistent information and functionality across all points of interaction80.
It is important to mention, that nowadays several OEMs, which provide the car ownership
solution already started to change their business models, improving the “before” , as well as
“after” the journey phase, thus making it more sircular.
One of the approaches they use is the implementation of connected services, which allow
customers to stay connected with their vehicle (fulfilling the before and after the journey
phases), even if they are physically far away from the car. One of the example of such services
(regarding the “before” the journey phase) is presented by the remote monitoring and/or remote
control services, ability to check/control if the windows are opened or closed, to preheat the
seats before the journey or remotely charge the battery (for the electrical vehicles). Please refer
to the table 4.14.
79 Kumar A., Killingsworth M., T. Gilovich (2014) Waiting for Meriot: anticipatory consumption of experiential and material purchases. University of Callifornia, Berkley. 80 Oracle. 2012. Customer Experience Reference Architecture. Today’s winners are defined by customer experience.
77
Table 4.14. Customer journey canvas. Car ownership: pre-service phase, example of
connected services, already provided by OEMs in order to fulfill the “before” the
journey phase.
Source: compiled by the author.
It is important to highlight that this kind of services currently is in the initial phase of its
development, meanwhile taking into consideration the fast development of especially IT
technologies, we may see them implemented by the OEMs majority in the nearest future.
Mobility model
Remotely check/ control the status of the vehicle
Pre-journey adjustments
Remotely check the vehicle helth staus. Remotely check/start charging the vehicle's battery via an app or web-platform.
Remotely open/close windows, doors, roof.
Remotely control the air conditionng remote control, heating of the vehicle seats before the journey.
Car ownership
PRE�SERVICE
ACTION
Predictive Maintenance
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Apprendix A. Glossary terms: Shared mobility
Car sharing
A program where individuals have temporary access to a vehicle without the costs and responsibilities of ownership. Individuals typically access vehicles by joining an organization that maintains a fleet of cars and light trucks deployed in lots located within neighborhoods, public transit stations, employment centers, and colleges/universities. Typically, the carsharing operator provides insurance, gasoline, parking, and maintenance. Generally, participants pay a fee each time they use a vehicle.
Hybrid Peer-to-Peer (P2P)- Traditional Model (e.g.,
eGo)
Individuals access vehicles or low-speed modes by joining an organization that maintains its own fleet, but it also includes privately-owned autos or low-speed modes. The vehicles are distributed throughout a network of locations. Expenditures, such as insurance, are typically provided by the organization during the access period for both roundtrip carsharing and P2P vehicles. Members access vehicles or other low-speed modes through a direct key or combination transfer from the owner or through operator installed technology enabling “unattended access.”
One-way Car sharing (e.g., car2go, DriveNow,
BlueIndy)
Car sharing that enables members to pick up a vehicle at one location and drop it off at another. Also called a point-to-point car sharing system. One-way car sharing services can be station- based or free floating.
Peer-to-Peer (P2P) Car sharing (e.g., Flightcar, Getaround, RelayRides)
P2P car sharing can also be called a peer-to-peer access model. This model employs privately-owned vehicles or low-speed modes made temporarily available for shared use by an individual or members of a P2P car sharing company. Expenditures, such as insurance, are generally provided by the P2P organization during the access period. In exchange for providing the service, operators keep a portion of the usage fee. Members can access vehicles or low-speed modes through a direct key or combination transfer from the owner or through operator-installed technology that enables “unattended access.”
Personal Vehicle Sharing (PVS)
The sharing of privately-owned vehicles where companies broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance, and technology).
Ridesharing: Carpooling and Vanpooling (Carma
Carpooling, vRide, Zimride)
Ridesharing facilitates formal or informal shared rides among drivers and passengers with similar origin-destination pairings. Vanpooling consists of 7-15 passengers who share the cost of the van and operating expenses and may share the responsibility of driving.
Ridesourcing / TNCs (e.g., Lyft, Sidecar, Uber)
Ridesourcing services (also known as transportation network companies or TNCs) provide prearranged and on-demand transportation services for compensation, which connect drivers of personal vehicles with passengers. Smartphone applications are used for booking, ratings (for both drivers and passengers), and electronic payment. There are a variety of vehicle types that can be offered by these services including: sedans, sports utility vehicles, vehicles with carseats, wheelchair accessible vehicles, and vehicles where the driver can assist older or disabled passengers.
Ridesplitting (e.g., Lyft Line, UberPOOL)
A form of ridesourcing where riders with similar origins and destinations are matched to the same TNC driver and vehicle in real time, and the ride and costs are split among users.
Roundtrip Carsharing (e.g., City CarShare, Zipcar)
Car sharing that allows members hourly access to shared vehicles that must be returned to the same location from where they were picked up. Depending on the operator, users can choose from a variety of vehicles including: sedans, vans, sports utility vehicles, plug-in hybrid vehicles, and all-electric vehicles.