Economic Explanation: From Sharecropping to the Sharing Economy
Kevin Tsui ()
Man and the Economy, 2016, vol. 3, issue 1, pages 77-96
I examine the sharing economy using a contractual approach pioneered by Cheung (1969, The Theory of Share Tenancy: With Special Application to Asian Agriculture and the First Phase of Taiwan Land Reform. Chicago: Chicago University Press). Progress in information technology that reduces transactions costs leads to the emergence of rental contract to supersede outright ownership, especially among goods and services in which search and monitoring costs had been major trade barriers. I present evidence that ridesharing indeed significantly lowers wait times. Trust cannot explain the economic success of some sharing economy companies (e. g., Airbnb, Uber) but not others (e. g., SnapGoods). Sharing power drill, the poster child of the sharing economy, is an economic failure because the major trade barrier is transportation rather than transaction costs. Changes in transaction costs lead to changes in contractual arrangements. In the case of contractual choice between ridesharing platform and drivers, findings about drivers’ characteristics and contract details are consistent with the theory of share tenancy. My analysis also sheds light on the current debate on the employment status of driver-partners.
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
https://www.degruyter.com/view/j/me.2016.3.issue-1 ... -0005.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bpj:maneco:v:3:y:2016:i:1:p:77-96:n:4
Ordering information: This journal article can be ordered from
Access Statistics for this article
Man and the Economy is currently edited by Ning Wang
More articles in Man and the Economy from De Gruyter
Series data maintained by Peter Golla ().