The globaleconomy has caused a significant increase in competition and a rise in thenumber of digital platforms, which according to Saariko (2017) are used inorder to be able to accomplish complexity and stimulate development. This risein number of digital platforms has caused a transformation of the economy intoa digital economy with the use of advanced digital technologies and the unconventionalway of matching supply and demand (Gururaj, 2015). A key aspectof digital platforms is that the platforms are merely selling access to thesoftware, rather than producing or selling their products or contentthemselves. Digitalplatforms have also created the foundation for the sharing economy.
There is alot of controversy about this term and there is no generally accepteddefinition. Katz (2015 defines it as an online intermediate that acts as a marketfor people-to-people services and facilitates exchanges by lowering transactioncosts. Anexample of a digital platform that participates in the sharing economy is DogVacay,founded by Aaron Hirschhorn and his wife, Karine Nissim-Hirschhorn. DogVacay isan online service connecting pet owners to people who are willing to look afterpets (Henry, 2017).
It started in L.A in March 2012, but it quickly expanded tocities all over the U.S.A and Canada. Peopletend to focus on the positive aspectsthat are related to the formation of digital platforms and the upswing of the sharingeconomy, however there are several characteristic controversies. One such acontroversy would be that digital platforms are difficult to regulate. Thesharing economy has enabled a significant rise of non-professional andnon-regulated service providers.
DogVacay also operates on this principle, sincethe pet sitters can all easily sign up online, without having to actually applyfor the job. In addition, since these platforms are difficult to regulate, itis easier to bypass taxes. This has caused that industry incumbents complainabout losing revenues (Rauch & Schleicher, 2015). However, it is uncertain howthe formation of digital platforms like DogVacay have influenced competition inthe traditional markets. Thisessay will focus on how successful DogVacay was in disrupting the industrymarket. Firstly, it will concentrate on the DogVacay platform in greaterdetail. Secondly, it will discuss DogVacay’s role in the sharing economy. Thirdly,it will focus on competition in the market.
It ends with a conclusion. Thisanalysis will be done using a literature review.