Collaborative business models and efficiency : potential efficiency gains in the European Union : impulse paper N° 7

With the advent of the all-embracing digitization, the internet-based collaborative economy, which harnesses the power of technology to connect people in transactions, is on the rise. It provides services in a different way than traditional economies: Traditional service providers typically adopt a pipe-like business model, employing staff within a single enterprise to supply a service directly to a particular segment of the market. The collaborative economy, by contrast, mainly consists of peer-to-peer (P2P) online platforms, which are characterized by network-based business models. The tremendous success of many collaborative platforms might be indicative of substantial efficiency gains that can be realized in collaborative business models, but not in traditional business models. The purpose of this impulse paper is twofold: First, it examines whether there are efficiency gains in the collaborative economy by carrying out a comparative analysis of the business model of a collaborative platform and a traditional enterprise providing broadly the same service. Second, given the efficiency gains realized in the collaborative economy, the growth trajectories of a US-based and of a European collaborative platform are compared in order to single out potential barriers arising in the EU environment. Based on these barriers, policy recommendations are provided that could foster the growth of collaborative platforms and thereby the realization of efficiency gains.