cic iwom panel：fudan professor zou on the new sharing economy powered by online social network

The New Sharing

Economy Powered by

Online Social Network

Deqiang Zou, Ph.D.

School of Management, Fudan University

November 15, 2010

From Social Media to Social Business

© Copy rights reserved, Zou Deqiang

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Movie: Purchase or Rental?


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WHY Buy When You Can Rent?

• What about extending the idea of share movies via

Netflix and stream music rather than buying CDs to

the idea of sharing a car?

Car ownership provides great convenience— but at the

price of great inefficiency

The average American

spends 18% of his income

on running a car that is

usually stationary


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Underused Assets

• People are growing impatient with “idle capacity”

(i.e., waste)

On average, a British car is driven for less than an hour a

day but costs about £5,500 a year to own

Half of American homes own an electric drill, but most

people use it once and then forget it

The number of drivers using car-sharing networks

increased 117% between 2007 and 2009 in North America


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Substitutes for Owning / Using Goods

Drive Own Car Rent a Car and Drive it

Hire a Chauffeur to Drive

Hire a Taxi

Car Pooling

Own a Physical GoodRent Use of a

Physical Good

Perform Work Oneself

Get Someone to Do Work


6

ZipCar: Wheels When You Want Them

• World’s largest provider of car-sharing services

Customers include consumers, businesses, universities, and

fleets

Drivers register online and, depending on the service, pay an

initiation fee of about $25 and an annual fee, often $50

Hourly rates range from $7 to $17, include gas (a credit card is

placed in each car) and insurance

Largest selection of vehicles, from the Mini Cooper and Mazda 3

($8 an hour) to the BMW 328i ($17 an hour)


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ZipCar: How It Works?

• Get all the jobs done

Just with your cell phone

By mid 2010, 400,000

members, 4,400

locations and 9,000

vehicles

ZipCar/2009-10-05 Talking_Tech_Zipcar_and_iPhone.mp4


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ZipCar: Business Performance

• Annual revenues are $130 million, and is growing about 30% a year

• 80% of the US market share About 8,500 companies have signed up for the service,

including Lockheed Martin, Gap, and Nike. So have 120 colleges and universities, such as Carnegie Mellon and the University of Miami

• Generate about $23,000 per car annually, with each employee supporting about 30 vehicles

That’s about double the revenue and efficiency of a traditional car rental company


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ZipCar: Consumer Wellbeing

• Customers buy just the amount of car they actually

need

• An average Zipcar member saves more than $5,000

dollars a year compared with owning a car

• “Consumer Philandering”

Today’s a BMW day, or is it a Volvo day?


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ZipCar: Social Benefits

• “Let’s use fuel efficient cars.”

Reduce our fossil fuel needs by 4%

• Each vehicle operated by Zipcar is equivalent to

taking 15~20 cars off the road

• Car sharers report reducing their vehicle miles

traveled by 44%

• CO2 emissions are being cut by up to 50% per user


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What’s Shared?

• Financial / Accounting analysis

• Total Cost= Fixed Cost + Variable Cost

Car purchase

Annual taxes,

fees, etc.

Fuel, Parking

fees, etc.

Car Sharing Ride Sharing


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Evolution of the Car Market Sector

Car

Ownership

Car

Sharing

Ride

Sharing

P2P Car

Sharing

P2P Ride

Sharing


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Ride Sharing

• Today, 75% of the trips are single-occupancy

vehicles

• GoLoco: share trips with your friends, and friends of

friends

Join a group or create groups to travel with

Post your trip for your friends, coworkers, or everyone on

GoLoco to see. Whether you are driving somewhere or

looking for a ride, posting your trip helps you find others to

GoLoco with!

Receive email alerts about trips to places you want to go

GoLoco/GoLoco_-_How_does_it_work.mp4


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P2P Car Sharing

• WhipCar (London) and RelayRides (Boston) aim to

get car-owners to rent their vehicles to strangers

when not using them themselves

Need a car? Borrow cars for $6/hr (RelayRides)

Own a car? Share it and earn cash

• How WhipCar works?

• Convenience and efficiency as compared to ride

sharing

WhipCar/Hire_Cars_on_WhipCar_-_Local_Car_Rental_Put_Your_Car_to_Work.flv


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P2P Ride Sharing

• OpenRide

Enables drivers to offer spontaneous

shared rides when already on the

road

One special feature of is the

openness of its infrastructure

which offers established rideshare

agencies and communities a simple

means of connecting up with

OpenRide and thus gaining a foothold

on the market for mobile ad hoc

rideshare opportunities

OpenRide/OpenRideFlashEngl.swf


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Increased Need For…

Car

Ownership

Car

Sharing

Ride

Sharing

P2P Car

Sharing

P2P Ride

Sharing

Need for IncreasesTechnology TrustNetwork

Externality


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1. Technology: Connected

• Technology: more affordable and more convenient

sharing

Technologies such as high-speed Internet, mobile

broadband and GPS are enabling new ways of providing

value to customers

Zipcar’s available vehicles report their positions to a

control centre

• Without technology, how would Zipcar’s members know

where the cars were? How would they get access to cars?

How would the system know how long they had the cars and

how many miles they drove?


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1. Technology: Connected

• Technology also streamlines and automates many

back-office functions at Zipcar

Determinine the best location for a car, utilization trends,

member demographics and spending patterns, or usage

prediction algorithms


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1. A Peek Into Netflix Queues

• Examine Netflix rental

patterns, neighborhood

by neighborhood, in a

dozen cities (Jan. 10, 2010)

• It is predictive

Self segmentation

http://www.nytimes.com/interactive/2010

/01/10/nyregion/20100110-netflix-

map.html?nl=multimedia&emc=focusem

b1


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2. Trust: Evidence or Confidence

• To ensure that both parties are trustworthy

WhipCar asks for details of both the rented car’s registration and

the renter’s license, and checks them against official data

RelayRides only accepts cars that have gone through a safety

check

• Social networks are helping to lower one of the biggest

barriers to sharing—trust

Couchsurfers, can see at a keystroke what others in the network

think of the stranger who wants to borrow their couch. If he is

dirty or creepy, they need not let him in


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2. Trust: Influentials


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2. Trust: I am My Connections

2~6

About 150

• a store

assistant

• a call center

employee

• the person

who wrote the

online hotel

review

• the person

who answered

your forum

question

• the person

who

commented

on your

YouTube

video

• the person

who you

bought from

on eBay


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2. Trust: Temporary Ties Works, too


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3. Network Externality

• Break through the critical mass or threshold of

customer base to take off

iTunes 10: Social network business

Instantly available to 160 million users: “This is about

talking to people about music”

http://www.apple.com/itunes/ping/


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Integrated Solutions to Sharing

• The mobile, spontaneous sharing opportunities with

the barriers of (1) technology, (2) trust, and (3)

network effect, can be realized by online social

network driven by location bases services (LBS)


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More than Check-ins and Badges


33

It Can Be Analytic or Predictive


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Share More, Beyond Car and Ride

• P2P car/ride sharing suggests that consumers could

increasingly make money on the side

• Now here’s one smart phone app that pays you to

use it

• Field Agent shows users a list of task people or

companies want to be completed

Tasks such as checking the price of a product in a store or

taking a picture of a product on a shelf will put you $2

ahead


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Micro Entrepreneurs?

• The most popular job

so far:

Spend 10 minutes on the

couch, listening to and

rating music.

With enough couch

potato jobs like that,

users can make around

$12 an hour, about 50%

more than the minimum

wage


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Sharing: New Engine for Economic Growth

• It is good for you, your community, business, and

the planet

• New businesses have emerged to serve this new

market, exploiting the ability of online social network

(esp. LBS) to create networks of shared interests

and trust and to simplify the logistics of collective

use

• Redefine a multi-sided market (e.g., Google) which

may facilitate free economy


37

The Faith

• Access often matters more than ownership, and

technology will make sharing more and more

efficient

• Social networking is a means to an end. You

need to understand what the end is


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“Creativity is just connecting things.”

Be A Connectionist


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Social Network: iPad and iPhone


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[email protected]


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References

• Barry, Keith (2010), “Hitchhiking Goes High Tech with Car2gether,”

Wired, September 8.

• Belson, Ken (2010), “Car Sharing: Ownership by the Hour,” New York

Times, September 10.

• Botsman, Rachel and Roo Rogers (2010), “Beyond Zipcar: Collaborative

Consumption,” Harvard Business Review, (October), 30.

• Botsman, Rachel and Roo Rogers (2010), What's Mine Is Yours: The Rise

of Collaborative Consumption, HarperBusiness.

• Economist (2009), The Connected Car, June 4.

• Economist (2009), Wheels When You Need Them, September 2.

• Economist (2009), The Electric-fuel-trade Acid Test, September 3.

• Economist (2010), Teaming Up with the Joneses, April 22.


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References

• Economist (2010), Collaborative Consumption, April 22.

• Economist (2010), “The Business of Sharing,”

Economist.com/blogs/Schumpeter, October 14.

• Fuhrmans, Vanessa (2010), “BMW Plans to Test Short-Term Car Rentals,”

The Wall Street Journal, October 24.

• Griffith, Scott (2009), “Zipcar: Selling cars, one ride at a time,” McKinsey

Quarterly, October 27.

• Keegan, Paul (2009), “Zipcar: The best new idea in business,” Fortune,

August 27.

• Taub, Eric A. (2010), “An App that Pays,” New York Times, April 20.

• Wikipedia (2010), ZipCar, http://en.wikipedia.org/wiki/Zipcar

cic iwom panel：fudan professor zou on the new sharing economy powered by online social network

Business

zou deqiang

car ownership

british car

car andwork

ridesharing14 copy rights

user10 copy rights

work car pooling

p2p car sharing whipcar