World Class Faculty & Research / February 15, 2017

Could This Be the Key To a Better Sharing Economy?

SMITH BRAIN TRUST – The car you rented as part of your auto-share club reeked of cigarette smoke and a cross-country roadtrip worth of crumbs littered the seats and floor. There was a slight and mysterious stickiness on the gear shift. It made you wonder: Why are some of the vehicles in the car-sharing club kept meticulously tidy while others arrive icky?

As the sharing economy grows, with prominent players Zipcar, Airbnb, Uber and Rent The Runway, heads of companies are wondering the same thing. And they're wondering how they can encourage their customers to be better custodians of the goods they share.

In new research, Rosellina Ferraro, associate professor of marketing at the University of Maryland's Robert H. Smith School of Business, seeks to answer those questions. The study, which focuses on car-sharing, asks: Is customer misbehavior contagious, and what can companies do to encourage customers to be their better selves?

"When people are using the same products, we suspected that social influences would play a role," Ferraro says. What they didn't know was exactly how they would play out. 

The research, with co-authors Tobias Schaefers of Germany’s Technical University of Dortmund, Kristina Wittkowski of Finland’s Aalto University, and Sabine Moeller of London’s University of Roehampton, was published in a recent issue of the Journal of Service Research. 

In a series of lab and field experiments, the researchers found that signs of misbehavior from previous users, with candy wrappers and other litter left behind, encouraged others to behave in a similar manner.

"You could argue that this is an obvious result, given the prior research showing that when one person litters, it increases the likelihood that someone else will litter," Ferraro says. "However, product-sharing is a much different situation than littering on a public street. In car-sharing, the user is paying to use the service and the user knows that another user will get into the car soon afterward. Thus, it was important to show that misbehavior is contagious in this context."

The studies offer some managerial lessons for companies across the sharing economy, whether they are lending cars, bicycles, bedrooms, luxury gowns or handbags.

Ferraro cites another study, which found that people who used Zipcar vehicles tended to treat it like a hotel room – anonymously and as though housekeepers would clear their debris. "They didn't feel in any way connected to the greater community," she says. 

As part of her research, Ferraro conducted a field test in an environment where there was a sense of community among the borrowers of the cars. In the study, drivers took better care of their borrowed vehicles, and even cleaned up messes left behind by previous car users. 

"Not only did it reverse the effect, but people tried to make up for the bad behavior of other people," she says. 

The researchers also found that drivers were less likely to intend to repeat bad behavior when borrowing a car from a company with a strong brand or when they saw the owner as an individual, rather than an impersonal service entity. She suggests that companies in the sharing economy feature employees in virtual customer contacts. 

"We make the point that if you are a company in this area, do you want to punish people with fees? Do you want to engage in surveillance to see what people are doing? Probably not," Ferraro says. "Those aren't the kinds of things that generate goodwill toward the company."

And in this sector, where online reputation and social media have played a sizable role, goodwill may pave the road toward big business. 

The global sharing economy market was valued at $26 billion in 2013 and some project it will swell to $335 billion by 2025. According to Pew Research study last year, some 72 percent of American adults had used at least one of 11 access-based companies. 

"The sharing economy is going to be even bigger than it is now," Ferraro says. "People are predicting, with the automobile, that someday everyone will be driving like this. And sharing computers, sharing of all kinds of things. It will be interesting to see how it evolves."

Read more
"Contagious Effects of Customer Misbehavior in Access-Based Services" was published in 2016 by the Journal of Service Research.



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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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