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Fighting fire with fire: the use of an auxiliary platform to address the inherent weaknesses of a platform-based business

Cheuk Hang Au (College of Management, National Chung Cheng University, Minhsiung, Taiwan)
Barney Tan (School of Information Systems and Technology Management, The University of New South Wales, Sydney, Australia)
Chunmian Ge (School of Business Administration, South China University of Technology, Guangzhou, China)

Internet Research

ISSN: 1066-2243

Article publication date: 24 May 2023

103

Abstract

Purpose

The success of sharing economy (SE) platforms has made it attractive for many firms to adopt this business model. However, the inherent weaknesses of these platforms, such as their unstandardized service quality, the burden of maintenance on resource owners and the threat of multi-homing, have become increasingly apparent. Previous prescriptions for addressing these weaknesses, however, are limited because they do not account for factors such as compliance costs and information asymmetry, and tend to solve the problem on only one side of the platform at the expense of the others. By exploring the strategies deployed and actions undertaken across the development of Xbed, a successful accommodation-sharing platform in China, this study aims to explore an alternative solution that would overcome the aforementioned weaknesses without the corresponding compromises.

Design/methodology/approach

The authors conducted a case study consisting of secondary data and interviews with 15 informants who were representatives of Xbed's top management, organizational IT functions and its various business units.

Findings

The authors identified three inherent weaknesses that may be found in SE business models and how these weaknesses can be overcome without compromising other stakeholders through an auxiliary platform. The authors also discuss the advantages, characteristics, deployment and nature of auxiliary platforms.

Originality/value

This model contributes an in-depth view of establishing and nurturing auxiliary platforms to complement a primary SE platform. Owners and managers of SE platforms may use our model as the basis of guidelines for optimizing their platforms' development, thereby extending the benefits of SE to more stakeholders.

Keywords

Acknowledgements

An earlier version of this study was accepted as a research-in-progress paper at the International Conference on Information Systems in 2019. This research was supported by grants from the National Natural Science Foundation of China (Grant ID: 72272055, 71872065, 72034002), the Natural Science Foundation of Guangdong Province for Distinguished Young Scholars (Grant ID: 2019B151502027), and the Guangzhou Philosophy and Social Science Planning Project (Grant ID: 2022GZYB24).

Citation

Au, C.H., Tan, B. and Ge, C. (2023), "Fighting fire with fire: the use of an auxiliary platform to address the inherent weaknesses of a platform-based business", Internet Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/INTR-10-2021-0746

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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