Innovative business models can frequently be upended
, not by direct assaults on their product or strategy, but by unanticipated threats to their financial processes and economic outcomes.
History is replete with examples, from Depression-era Chicago gangster Al Capone being convicted not of murder, but tax evasion; to Sony's technologically superior Betamax being supplanted by the corporate alliance supporting the DVD; to Apple's lightning-fast dominance of the music industry via a new distribution system called iTunes.
And so it seems possible, as the following article explains, that the sharing economy Airbnb model may be challenged by the fact that as more apartment, condo and housing units are converted to rental - or app-driven, on-demand contracting, the growth of the industry may be affected not by opposition from those concerned about the economic impact on people who need a place to live, but by the inability of the insurance industry to provide affordable coverage to owners, renters and corporate intermediaries.
Just as there may need to be a redefinition of what it means to be an employee or contractor, so there may need to be a new conceptual approach to the meaning of home. And ownership. JL
Rebecca Burn-Callander reports in The Telegraph:
Insurance companies don’t have enough data to work out the level of
risk. Sharing economy business are all very different, so
it’s difficult to work out a template that suits all of them. Even if it does find insurance, the premium is prohibitively high. Who bears the risk? The platform or the consumer?