Sharing Economy in the U.S. and Japan Wendy Li (U.S. Bureau of Economic Analysis) Makoto Nirei (Ministry of Finance of Japan and University of Tokyo) Kazufumi Yamana (Ministry of Finance of Japan) January 6, 2017 Society of Government Economists session, [email protected] Motivation and Research Question Sharing technology Enabling to share goods and services via online platforms Few studies with exceptions: Nadler 14; Matzler, Veider, and Kathan 15; Wallsten 15 Q: How much is the quantitative impact of sharing technology? Zervas, Proserpio, and Byers 14; Cohen, Hahn, Sevitt, and Metcalfe 16 This study Focuses on Transportation industry Hotel/Hospitality industry Estimates the impacts of Uber and Airbnb on incumbent firms such as
Rental cars: Hertz, Avis Taxi related: Medallion financial, DaiwaMT (taxi in Japan) Park24 (parking in Japan) Hotels: Hyatt, Starwood, Japan Hotel REIT Online travel agencies Key Measurement Items Depreciation rate of organizational capital (OC) Stock of OC Methodology drawn on intangibles study Stock share valuation General connections between OC and stock returns are empirically shown by Eisfeldt and Papanikolaou 13 Data Compustat Nikkei Financial Quest Daily price data from NYSE, NASDAQ, Tokyo Fund raising history of Uber and Airbnb Key Findings Firms adopting sharing technology are more OC-intensive
Incumbents not adopting sharing technology exhibit higher depreciation rates of OC Suggests a creative destruction nature of sharing technology Introduction of sharing technology caused a negative impact on the stock prices of incumbents and a positive impact on the entrants Suggests a transfer of rents to consumer surplus Organizational Capital and its Depreciation Firms U.S. Hospitality Firms _OC [%]OC [%] Expedia 8% Priceline 19% Hyatt 36% Starwood 33% TripAdvisor 17%
Japanese Transportation Firms Park24 21% DaiwaMT 26% US Rental Car Companies Hertz 14% Avis 36% US Taxi Related Company Medallion financial No SG&A data Estimation results Depreciation rates are lower for sharingtechnology intensive firms Estimated stock of organizational capital in transportation industry 10 5
2008 2009 2010 2011 2012 2013 2014 Year Higher rates of accumulation estimated for sharing-technology investing firms Growth rate of OC for recent 3 years: Avis 5.6%; Hertz 2.7%; Park24 16.0%; Daiwa -3.0% 2015 Estimated stock of organizational capital in hospitality industry High rates of growth
10 2000 2005 2010 Year 2015 Impacts on Stock Prices Methodology: Extended difference-in-differences Share price developments after entry Event study Bayesian Structural Time Series (Scott and Varian 14; Brodersen et al. 15) Cumulative impacts Bayesian Structural Time Series Transportation industry Incumbent Entrant with sharing technology
Car + Driver Taxi U.S. Medallion Financial Corp Medallion in Chicago Daiwa MT Uber Lyft Car Car sharing Zipcar Park24 Rental car Avis Hertz Summary of findings Ubers entry had negative effects on Medallion financial and Chicago Medallion Ubers entry had a positive effect on Avis, who had bought Zipcar Hertzs exit from car-sharing had a negative effect Hertzs alliance with Uber and Lyft had a positive effect Entry of Park24 in car-sharing had a positive effect Hotel firms and REIT did not respond to Airbnbs entry
Medallion Financial Corp 4 3 original Log share price 2 Real line: Actual Dotted: Mean posterior prediction Shaded: 90% CI 1 1 0 pointwise Log difference from day 0 -1
-2 0 1000 2000 3000 4000 5000 (days) Enter Uber: August 22, 2013 (major fund raising) Actual price deviates downward from counterfactual conditional prediction Chicago Medallion price 14 original 13 12 Real line: Actual
Dotted: Mean posterior prediction Shaded: 90% CI 11 1 pointwise 0 -1 -2 -3 0 100 200 300 (transaction ticks) Avis 4 original 3
2 1 Real line: Actual Dotted: Mean posterior prediction Shaded: 90% CI 0 3 pointwise 2 1 0 -1 0 500 UBER entry August 22, 2013 Ubers major fund raising January 2, 2013 Avis announced to buy Zipcar 1000 1500
1500 2000 UBER entry January 2, 2013 Avis announced to buy Zipcar August 22, 2013 Ubers major fund raising September 2015 Hertz ended car-sharing service (launched in 2008) June 30, 2016 Hertz struck alliance deal with Uber and Lyft 2500 Hertz 2 Pull-back from car-sharing service Hertz 3 4 original 3
2 1 2.0 pointwise 1.5 1.0 0.5 0.0 0 500 1000 1500 2000 2500 Alliance with Uber and Lyft Daiwa Motor Transportation (Taxi and limousine services in
(days) August 5, 2014 Uber started limousine-hiring service in Japan, but not ride-sharing Park24 (parking and car-sharing in Japan) Founded 1971 (Nishikawa store): Manufacturing and selling signboards No Parking Increasing number of individually owned automobiles Few supply of parking spaces Sales of park-lock system 1991: Launched pay-by-the-hour parking business Times Unmanned operation on many small lots 16,000 sites; 550,000 car spaces Online network system: Real-time availability info on smartphones March 24, 2009: Launched car-sharing service Times Car Plus Acquisition of Mazda Rental Car Times (Park24) coin-parking Park24 8 original
6 4 pointwise 4 2 0 0 1000 2000 3000 Car-sharing service 4000 What stock prices measure 5
E 55 Hotel Industry Intervention event: May 22, 2014 Airbnb raised USD 475M (with 10B estimated valuation) Started business in Japan in the same month Incumbents High-end: Mariott, Starwood, Intercontinental, Hyatt Mid-range: Choice, Wyndham, Japan Hotel REIT Starwood Mariott
Intercontinental 5 4.5 5 4.0 4 3 3 3.5 original original original 4
0 500 1000 1500 2000 2500 Conclusions Firms incorporating sharing technology have a higher degree of organizational capital intensity and have accumulated a higher stock of organizational capital Estimated depreciation rates of organizational capital indicate a creative destruction of the sharing technology Sharing technology had a positive impact on the share prices of introducing firms and a negative impact on incumbents Some thoughts on the impacts on consumer surpluses
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