Uber Might Buy Me a Mercedes Benz: An Empirical Investigation of the Sharing Economy and Durable Goods Purchase

63 Pages Posted: 20 May 2017 Last revised: 11 Jan 2018

See all articles by Jing Gong

Jing Gong

Temple University - Department of Management Information Systems

Brad N Greenwood

University of Minnesota - Twin Cities - Carlson School of Management

Yiping Song

Fudan University

Date Written: May 19, 2017

Abstract

In this work, we examine how the introduction of sharing-economy platforms (e.g., Uber, Lift, and Airbnb) affects durable goods purchase. On the one hand, the introduction of such platforms may cannibalize sales, as they may change the decision-making calculus of consumers by offering a lower cost “rental” option in lieu of purchase. On the other hand, such platforms might stimulate purchase, as the presence of these platforms could enhance the value of ownership, because participants may seek to capture the rents associated with participating in the sharing economy. In this study, we resolve this tension using a unique dataset of new vehicle registrations in China. In doing so, we exploit the variation in timing of Uber entry across different locations, to estimate the effect on vehicle purchase for personal use. Findings suggest Uber entry is associated with a considerable increase (8%) in new vehicle ownership, indicating that consumers are actively changing their stock of held resources in order to capture excess rents offered by these platforms. Further, results indicate that the effect of Uber entry varies considerably across gender, age, and vehicle type.

Keywords: sharing economy, platform, ridesharing, car sales, durable goods purchase, difference in difference

Suggested Citation

Gong, Jing and Greenwood, Brad and Song, Yiping, Uber Might Buy Me a Mercedes Benz: An Empirical Investigation of the Sharing Economy and Durable Goods Purchase (May 19, 2017). Available at SSRN: https://ssrn.com/abstract=2971072 or http://dx.doi.org/10.2139/ssrn.2971072

Jing Gong

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Brad Greenwood

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Yiping Song (Contact Author)

Fudan University ( email )

670 Guoshun Road
Shanghai, 200433
China

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