Why consumers love the sharing economy

There’s only one other country that comes close to matching the U.S. in terms of ride-sharing market volume. Gross bookings in China are expected to amount to roughly $10 billion this year, and as the graphic shows above, well ahead of the U.K. and Japan which are ranked third and fourth. The Chinese market is dominated by local player Didi Chuxing, which acquired Uber’s China business last year in exchange for a sizeable stake in the newly merged company. But why is it that the Chinese are so willing to adopt ride-sharing apps? According to new research, it is not just about cost.

In a new paper just published in the International Journal of Contemporary Hospitality Management, HRSM professors Kevin So and Simon Hudson – along with Ge Zhu from Beijing Information Science and Technology University - explored what motivates consumers in China to adopt ridesharing apps. Using social cognitive theory as the theoretical framework, the team developed a value adoption model to illustrate important factors that influence adoption of ridesharing applications. What they found was that it wasn’t just functional values such as convenience and cost-effectiveness that motivated consumers. They were also attracted to ride-sharing because of the emotional and social benefits. This tends to support research that has been done with users of Airbnb where consumers say that the sharing economy provides more fun, is better for the environment, and builds a stronger community. What this suggests is that traditional companies trying to compete with the sharing economy could compete by making more of an emotional/social connection with customers. Dr. Hudson is exploring this further within the context of accommodations, and has just written a paper with PhD student Jing Li for Journal of Hospitality & Tourism Cases illustrating how hotels can compete with the sharing economy by ‘getting social’.