Technology Grabs Back: Platform Coops vs. the “Sharing Economy”

Summary

The platform economy, a newly popular term, refers to businesses that serve as a platform to connect users and producers of a product: think of Airbnb, Uber, Etsy, or even Twitter or Paypal. Sometimes they are also called “sharing economy” firms. Are they sharing, though? Who is doing the sharing?

These platforms connect suppliers of something – a room, a ride, a handcrafted gift, a 140 character message, or money – with someone who wants it. This is different than traditional business models. Platform economy companies typically do not make, maintain or distribute the underlying product. That’s a key difference between Airbnb, for example, and a traditional hotel, which builds, maintains, markets and supplies the lodging. Paypal, similarly, is not an actual bank, but connects people who want to pay each other.