It Takes Two to Tango

In recent years, sharing economy platforms have revolutionized how we access goods and services. From catching a ride with Uber to booking a vacation rental on Airbnb or finding a handyman on TaskRabbit, these digital marketplaces have made it easier than ever to connect consumers with service providers.

As the sharing economy continues to expand rapidly, platforms face a critical challenge: keeping users engaged and coming back. Our research focuses on a crucial factor that could make or break a platform’s success: the interactivity between consumers and service providers.

The Power of Two-Way Communication and Participation

Our study identifies two dimensions of interactivity that drive customer engagement on sharing economy platforms: two-way communication and participation.

Two-way communication involves the back-and-forth exchange of information between customers and service providers. This could be a guest chatting with a host on Airbnb or a rider communicating with a driver on Uber. When customers feel heard and can easily communicate their needs, they are more likely to engage with the platform.

Participation goes a step further, involving customers actively engaging with the service process. This might include sharing feedback, participating in discussions, or collaborating with the service provider to enhance the experience. Such involvement not only deepens the customer’s connection with the platform but also increases their overall satisfaction.

Interestingly, we found that joint problem-solving—where customers and service providers work together to resolve issues—does not significantly boost engagement as one might expect. While collaboration is important, it seems that other factors like communication and participation play a more crucial role in keeping customers engaged.

The Role of User and Platform Characteristics

The impact of interactivity is not the same across different settings. Our results highlight that the effectiveness of these interactive elements can vary depending on users’ familiarity with the platform and the type of service being offered.

Novice users benefit more from two-way communication, which helps them navigate the platform and feel secure in their transactions. In contrast, experienced users are more likely to appreciate opportunities for joint problem-solving, as they are already familiar with the platform and seek deeper engagement.

The type of service also matters. Ownership-based services tend to require more two-way communication, as customers need to clarify their specific needs. On the other hand, access-based services may benefit more from joint problem-solving, as the service often involves ongoing collaboration.

What This Means for Platform Owners

These insights are crucial for sharing economy platform owners. Enhancing two-way communication tools and encouraging customer participation should be a priority. Whether it is through real-time chat functions, forums for discussion, or easy feedback mechanisms, creating opportunities for interaction can help build a loyal customer base.

However, it is not a one-size-fits-all approach. Platforms must tailor their engagement strategies based on whether users are new or experienced and consider their business model (access-based vs. ownership-based) when designing interaction features.

The Bottom Line

In the competitive landscape of the sharing economy, fostering customer engagement is essential for business growth and long-term viability. By understanding the role of interactivity—especially two-way communication and participation—platforms can better serve their users and create a more engaging and satisfying experience for everyone involved.

Disclosure: This blog post was created with partial assistance from AI tools.

Full reference: Yuan, Ruizhi, Yanyan Chen, and Timo Mandler (2024), “It Takes Two to Tango: The Role of Interactivity in Enhancing Customer Engagement on Sharing Economy Platforms,” Journal of Business Research, 178, 114658. https://doi.org/10.1016/j.jbusres.2024.114658

Cite for: Sharing economy, digital platforms, customer engagement, interactivity, two-way communication, participation, joint problem-solving, consociality, ownership-based services, access-based services, platform familiarity