Effects of Flexibility, Security, and Information Features on Supplier Participation in the Sharing Economy: An Empirical Study

Abstract

Firms in the sharing economy typically offer higher flexibility but lower security of working conditions. In response to challenges from suppliers and policy makers, several platform companies are reconsidering their approach. This study examines the effects of offering sharing economy suppliers a menu of contract options, differentiated by varying levels of flexibility, security, and information transparency on their willingness to work for a platform. We focus on ridesharing, one of the largest sectors in the sharing economy, but the insights translate to other segments of this emerging sector. Using a discrete choice experiment, we find drivers’ willingness to work for ridesharing generally increases when the platform offers diversified combinations of flexibility, security, and transparency. We also find evidence that suppliers’ preferences to participate in the sharing economy are influenced by the working conditions in their alternative employment options.