Abstract
Research Summary
We explore the challenges that digital platform‐based sharing economy ventures confront in establishing legitimacy for their business models by examining the dynamics that ensued when Uber Technologies deployed its ridesharing business model in four U.S. cities. Uber entered each city to jump‐start network effects by establishing cognitive legitimacy while deepening a sociopolitical legitimacy crisis that emerged due to mismatches between its business model and existing regulations. Operating between existing categories, Uber used a series of interrelated market and nonmarket strategies, which we label as liminal movement, to generate cognitive and sociopolitical legitimacy.
Managerial Summary
Sharing economy ventures based on digital platforms confront market and institutional challenges in each context they enter. On entry, these ventures must rapidly build an ecosystem of users and service providers, and engage with local regulators, administrators, and social groups in order to gain acceptance. The key to a venture's survival and success is liminal movement or in other words, its ability to adapt its digital platform and business model to continually leverage opportunities and address concerns as they emerge.
| Original language | English |
|---|---|
| Pages (from-to) | 447-475 |
| Number of pages | 29 |
| Journal | Strategic Management Journal |
| Volume | 43 |
| Issue number | 3 |
| Early online date | 21 Apr 2020 |
| DOIs | |
| Publication status | Published - 1 Mar 2022 |
Bibliographical note
Funding Information:We thank the anonymous SMJ reviewers for their generative inputs, and are grateful to Tobias Kretschmer, Aija Leiponen, Melissa Schilling, and Gurneeta Vasudeva, the editors of the special issue, for their detailed feedback on earlier versions of this paper. We thank Diane-Laure Arjalies, Tima Bansal, Stav Fainshmidt, Joel Gehman, Connie Helfat, Philipp Tuertscher, Lee Watkiss, Charlene Zietsma, and the faculty at the Ivey Business School for their inputs. We also thank participants of the 2018 SMJ Platform Ecosystems Special Issue conference held in Minneapolis, Minnesota, for their valuable comments on an earlier draft of this paper. Anna Roberts' work on this paper was supported in part by funding from the Smeal College of Business at Pennsylvania State University. Raghu Garud thanks Mike Farrell for his continued support.
Funding Information:
We thank the anonymous reviewers for their generative inputs, and are grateful to Tobias Kretschmer, Aija Leiponen, Melissa Schilling, and Gurneeta Vasudeva, the editors of the special issue, for their detailed feedback on earlier versions of this paper. We thank Diane‐Laure Arjalies, Tima Bansal, Stav Fainshmidt, Joel Gehman, Connie Helfat, Philipp Tuertscher, Lee Watkiss, Charlene Zietsma, and the faculty at the Ivey Business School for their inputs. We also thank participants of the 2018 Platform Ecosystems Special Issue conference held in Minneapolis, Minnesota, for their valuable comments on an earlier draft of this paper. Anna Roberts' work on this paper was supported in part by funding from the Smeal College of Business at Pennsylvania State University. Raghu Garud thanks Mike Farrell for his continued support. SMJ SMJ
Publisher Copyright:
© 2020 John Wiley & Sons, Ltd.
Keywords
- business models
- ecosystems
- platforms
- regulatory entrepreneurship
- sharing economy
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management