Platform Economics and Regulatory Change : a multiple-case study on Airbnb and Uber

Abstract

The significant growth of platform companies has disrupted, altered and threatened our existing way of living and traditional industries. These platforms have fostered many debates about their business model which are questioning the prevailing set of institutions and regulatory frameworks. This thesis explores how platform economics change regulations over time. More specifically, how through their work and interactions with different actors, these platforms can change the existing regulatory framework. The objective is to understand which activities are undertaken by these companies to change regulations, their roles as well as the conditions enabling these regulatory changes. In this thesis, a framework is developed to explain and highlight the contributions and work of platform companies to influence and change regulations over time. The platforms’ impact is examined in a multiple-case study which focuses on two platform companies, Airbnb and Uber, in three European cities; Berlin, London, and Paris. From this study, a four-stages model has been derived. The first stage refers to the disruption brought by this new type of company in the economy. During this phase, the platforms’ objective is to grow and harness a significant user base on which they could rely on for the next phases. Moreover, this first phase is characterized by a lack of understanding from the regulators who are not able to define this form of new economy. The second stage is a phase of crisis during which platforms are facing important regulatory issues and see their models jeopardized. This phase is defined by a high level of institutional work in the case of a “political campaign” undertaken by the platforms to lobby their interests. The third stage is a moment of pacification in which platform companies are more inclined to self-regulate themselves and to listen more carefully to both regulators and traditional providers. This stage marks a shift in the strategy undertaken by the platforms where the focus is now put on the regulators and traditional providers. The last phase is the cooperation one since platforms are willing to partner with local authorities and help them enforce the regulations. These four stages display a change in the platforms’ strategy to change and influence regulations as well as a shift in their roles towards regulators. The generalizability of this model is tested in a further analysis on e-scooter sharing platforms which confirms the findings of this thesis.