We contribute to the lack of shared conceptualisation by creating a taxonomy for digital platforms.The taxonomy gives an overview of digital platform properties, with property values expressing the possible variations between digital platforms depending on their type. These properties and property values are then used in the typology giving a clear overview of all the digital platform types and how these types are related.
Taxonomy
Market sides (Hagiu and Wright 2015) indicates the number of different groups of platform users in the market that are connected. Affiliation (Sanchez-Cartas and Leon 2019) refers to different ways that users (per group) can be connected to the platform. Centralization (Acquier et al. 2019; Sutherland and Jarrahi 2018) depends on the way the users can connect to each other. This can be via a decentralized search by the users of one side, or a centralized, automated matching by the platform software. The following two attributes are only applicable if the platform has multiple sides; Participation (Ehikioya 2018; Täuscher and Laudien 2018) indicates if the market that is intermediated by the platform is Consumer-to-Consumer (C2C) or Peer-to-Peer (P2P); the latter case holds when platform participants are considered as ‘equals’, where C2C is a specialisation of P2P when users of at least two sides are only allowed to be private persons . The offering orientation (Ritter and Schanz 2019) differentiates between product selling, result-oriented services or user-oriented when it’s a combination of the previous two. The last two attributes are only relevant for user-oriented offerings. A digital platform offers immediate access (Andersson et al. 2013; Gobble 2017) if access to the product is possible when the customer needs it. Under-utilized (Frenken and Schor 2017) indicates that the product is offered because of excess capacity. For each property value an ontology module is constructed and visualized in the ontology page.
The taxonomy also includes the inclusiveness/exclusiveness and relations of the properties and their values. Inclusive properties can have more than one value for the same property and are visually positioned under each other (e.g., user affiliation can be both registration and non-transaction, but not simultaneously non-transaction and investment). Exclusive properties cannot have more than one value and are always positioned next to each other (e.g., offering orientation is either product, or result, or user). If a value for a property excludes a value for another property or makes another property irrelevant, then this is indicated in grey (e.g., for a product oriented offering, immediate access and under-utilized are irrelevant and cannot have values; if user affiliation is non-transactional, then participation cannot be C2C).
Digital platform types
The figure below shows the instantiations of digital platform type as super- and subclasses of each other. This means that every digital platform type captures the common features of the digital platforms that are instances of the type.
On level one of our overview we have the root superclass ‘digital platform’, meaning that all instances of our digital platform types are considered digital platforms following our working definition.
On level two, the platform type is instantiated depending on the number of market sides. A market is a place where agents can gather to facilitate the economic exchange of goods and services (Kenton, 2020). In case the platform users cannot be classified into roles that have different interests in the service offering (e.g., as distinct groups of content creators and consumers, or providers and customers), the platform operates in a one-sided market and is defined as a one-sided platform (Filistrucchi et al., 2014). Examples are the dating platforms Tinder and Grinder and the communication platform WhatsApp. Unfortunately, for Multi-Sided (MS)markets there is not a clear and widely accepted definition (Sanchez-Cartas and Leon, 2019). The term was first used by noble price winners Rochet and Tirole (J. Rochet and Tirole, 2001) and defined as a market including at least two distinct but interdependent sides to have direct and clearly identified interactions with each other creating cross-side network effects. A cross-side network effect is created when the increase in value of the platform to the users of one side of the market is associated with an increase in the number of participating users on another side (Hagiu, 2018). Because of such effect, MS markets typically face the chicken-and-egg problem (D. S. Evans, 2005), having difficulties to find users of one side without having users of another side. It is gradually becoming acknowledged that MS markets pose specific challenges to market regulation and innovation policy as this strategy has strong indirect network effects that can lead to dominant market power and monopolies (Katharina Hoelck, 2016). Because of the complexity of the definition of Rochet and Tirole (J. Rochet and Tirole, 2001), we used the more convenient and also popular definition of (Hagiu and Wright, 2015): “A MS market enables direct interactions between multiple sides with each side affiliated with the market”. We therefor define a MS platform as a digital platform operating in a MS market. This definition obviously includes the two-sided platform as a subtype.
On level three, the main driver for classifying the types is the user affiliation to the platform. A multi-sided transactional market is characterized by the presence and observability of direct transactions between the users by which usage externalities arise. This can be a one or two-way tariff depending on the pricing structure, but even when one side has no charge, the market can still be defined as multi-sided (Filistrucchi et al., 2014). When these transactions are facilitated by a digital platform, it is called a (multi-sided) transaction platform by P. C. Evans and Gawer (2016). In case users of one side make an investment of financial resources that benefits users of another market side, the platform is an investment platform, as defined by P. C. Evans and Gawer (2016). This type includes online stockbrokers (e.g., Degiro, Keytrade) that intermediate financial instruments between stock exchanges and investors.
On level four, the digital platform type is dependent on the participation role the users can have. When the users are considered as peers, meaning equal participants, also called prosumers alternating in their role as producer and consumer (Ritter and Schanz, 2019), the platform operates in a P2P market. How we define this equality is further explained in our ontology, and this shows how our ontology can help to find and communicate generally accepted definitions. The P2P requirement makes the difference between a MS transactional platform and a digital marketplace. As defined by Täuscher and Laudien (2018), a digital marketplace needs to fulfil four conditions. The first condition, “connects independent actors from a demand and supply side and these individual actors can participate on both sides” (Täuscher and Laudien, 2018, p.320), implies that a digital marketplace needs to be MS and P2P. The second, third and fourth condition, respectively “these actors enter direct interactions with each other to initiate and realize commercial transactions”, “the marketplace platform provides an institutional and regulatory frame for transactions” and “the marketplace does not substantially produce or trade products or services itself” (Täuscher and Laudien, 2018, p.320), indicates a digital marketplace needs to allow transactions between the users of different sides. Hence, MS platforms without clear transactions between the users (e.g., YouTube) or intermediating non-P2P markets (e.g., Amazon) are not considered digital marketplaces. If the P2P condition exists for an investment platform, it is defined by Haas et al. (2014) as a crowdfunding platform, based on the P2P lending principles of Burtch, Ghose and Wattal (2013). An example is Kickstarter, helping projects to life by connecting creative people with their community (Kickstarter, 2020).
On level five and six, we specialize the type ‘digital marketplace’ using a combination of multiple property values. The definition of P2P sharing and collaborative consumption platform by Chasin et al. (2018) has four conditions. The first condition “individuals can assume the role of a peer-provider on the platform” (Chasin et al., 2018, p. 300) translates to a P2P participation. The second and third condition, respectively “peer-providers can offer physical resources on the platform” and “access to a resource is granted temporarily” (Chasin et al., 2018, p. 300) can be linked to the user-oriented offering definition of (Ritter and Schanz, 2019), which states that an offering can be placed on a continuous scale between product-oriented and result-oriented. Product-oriented offerings are geared towards sales of products, while in result-oriented offerings the provider is selling a result or competence, by offering a mix of services. In the middle of this continuum are the user-oriented offerings consisting of product leasing, renting, sharing and pooling (Tukker, 2004), which is in line with condition two and three by Chasin et al. (2018). The last condition, “Peer-consumers can search for resources offered by peer-providers” (Chasin et al., 2018, p. 300), means a decentralized market following the frameworks of (Sutherland and Jarrahi, 2018; Acquier et al., 2019). In a decentralized market, the platform exercises little control for exchanges beyond matchmaking. The provider sets the price and the customer can search for the right provider. In a centralized market, on the other hand, the platform provides access to a centralized resource pool and has a strong influence on the interactions between users by determining matches and setting dynamic and time-related prices. To conclude, the P2P sharing and collaborative consumption platform type includes platforms where customers can search and rent physical resources (in combination with other services) from their peers. This type includes platforms such as Airbnb for home renting, BlaBlaCar for carpooling, and Sharedesk to book a working spot.
The basic concept of an on-demand platform, as defined by Manonova (2018), is “immediately and effectively access to a product and service” with Uber as main example. Uber is clearly operating in a centralized market, also known as a matchmaker (Hafermalz et al., 2016), where the platform company acts as a brokering service offering and facilitating transactions between providers and customers (Hafermalz et al., 2016). Secondly, an on-demand platform is part of the (immediate) access economy described by Gobble (2017) as “offering customers access to a product and service where and when the customer needs it, and this can be straight away”.
A second-hand P2P platform as mentioned by Acquier et al. (2017, p. 8) is a decentralized, product-oriented digital marketplace, as it facilitates the searching and sales of used products between peers. An example is Carousell, a platform to resell used goods.
The definition most used for ‘sharing economy’ is the one by Frenken and Schor (2017): “Consumers granting each other temporary access to under-utilized physical assets (idle capacity), possibly for money” (Frenken and Schor, 2017, p. 4). A typical example of a platform operating in the sharing economy is Couchsurfing, where private persons rent out temporarily vacant accommodation (under- utilized physical good) to other private persons (C2C) for an agreed upon number of days (temporary access). It includes the six affordances of sharing economy by Sutherland and Jarrahi (2018) (i.e., generating flexibility, matchmaking, extending reach, transaction management, trust, and facilitating collectivity). In this paper we consider a sharing economy platform by Frenken and Schor (2017) as a platform where all transactions operate in the sharing economy. This is equal to the already discussed P2P sharing and collaborative consumption platform of Chasin et al. (2018), but with under-utilized products offered and consumed by private persons (i.e., the C2C specialisation of P2P).