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A friend of mine asked me whether something odd was going on, including the following picture:

Third party economy

Basically, the companies listed (Bitcoin, Uber, Facebook, Alibaba and Airbnb) sell a service in a market where usually inventory is required. Whether it's cash, vehicles, content, inventory or real estate, usually those companies have something and sell/rent it. The companies listed are (among) the biggest in their sector and only act as a third party.

What is the term for such constructs?

Best I could think of was a "third party economy", a modern version of service suppliers. It's taking being an intermediary to the next level. But I'm sure there's an actual term for both the economy going this way and the companies carrying it. I suspect even those words being highly related, thus asking this in one question.

Feel free to point out I'm completely on the wrong track if that's the case.

closed as off-topic by user42405, ChrisInEdmonton, Dheer, mhoran_psprep, Michael Dec 17 '17 at 21:13

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  • "Questions on economics are off-topic unless they relate directly to personal finance." – Community, ChrisInEdmonton, Dheer, mhoran_psprep, Michael
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    I challenge the assumptions that #1 Bitcoin is a bank, and #2 that Facebook is a media owner. I'm also dubious that Airbnb is the world's largest accommodation provider. – RonJohn Dec 15 '17 at 18:50
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    Bitcoin's market cap as of right now is just shy of 300 billion USD. That's nowhere near the top 60 of largest banks, worldwide: en.wikipedia.org/wiki/List_of_largest_banks – ChrisInEdmonton Dec 15 '17 at 20:59
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    @RonJohn Also, Bitcoin is not a company. – Michael Dec 15 '17 at 22:58
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    @Mast words have meaning, and thinking that unfacts are facts leads you to deviate further from reality. – RonJohn Dec 15 '17 at 23:05
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    @Mast "I'd think most people consider that partial ownership." then they'd be wrong. For example, you don't own in any way shape or form the photo you licensed Getty Images. – RonJohn Dec 15 '17 at 23:09
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Uber, FB and Airbnb are facilitators, since they, well, facilitate connections between the consumer and the provider.

Alibaba and Amazon are in that role, too.

  • Any taxi service is a facilitator, right? Even if they own their own taxis. So I'm not sure this holds up. – Mast Dec 15 '17 at 18:54
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    @Mast if a taxi company owns it's own taxis, then it is the provider. There's no one third party to facilitate a transaction with. – RonJohn Dec 15 '17 at 18:57
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    Amazon is a facilitator, but they are also a provider. They own plenty of warehouses full of stuff, which they sell directly to consumers. – Kevin Dec 16 '17 at 3:36
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Agents or brokers. Bitcoin is an outlier (and I don't know if I'd agree with the cartoon text for it in any case), but the others listed are like travel agents or concierges, or consignment sellers, who also don't have inventory, and don't have demand until a customer reaches out to them, and their work is to match a specific customer to one of several candidate suppliers.

What's novel about them is that the "supplier" isn't necessarily a corporation, but often a natural person supplying the asset that may be personal property or personally generated that the customer uses (broadly increasing the supply, as well as making the supply over time much more volatile); and the matching uses computer technology to replace older models of agent labor. Facebook gets paid by advertising, and "pays" the supplier with a currency of certain personal value (likes, shares) that engages dopamine centers in the brain; in the other cases, the agent scrapes their pay out of a cash flow from the customer to the supplier.

5

Most people refer to such models as a "sharing economy." Essentially, these are characterized by increased connections between asset owners and asset users.

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    What are they sharing? – RonJohn Dec 15 '17 at 18:58
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    @RonJohn It's not that these companies are sharing, but they are facilitating the sharing by their users on both sides of the transactions. – Ben Miller - Reinstate Monica Dec 15 '17 at 19:00
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    @BenMiller hmm. Then someone doesn't know what the word "share" means in this circumstance (like "sharing your house with someone"), if they think it includes charging a fee. That's renting (or whatever motels do). – RonJohn Dec 15 '17 at 19:04
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    @RonJohn That "someone" might be you. :) Sharing does not necessarily mean giving something to someone for free. – Ben Miller - Reinstate Monica Dec 15 '17 at 19:08
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    @BenMiller I can own a share of a vacation condo (aka "timeshare"), but me sleeping in your house for money just... isn't sharing. It's renting. – RonJohn Dec 15 '17 at 19:20

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