Arun-network effect

Uber has tangible marginal cost and doesn’t enjoy the traditional economies of scale, hard to be a global winner SE Loss of economic of scale? Yes: lose production benefits of scale, No: the need to make large fixed investments diminishes Though Uber has only “localized”  network effect, Airbnb has a global network effect and the demand-side economies of scale Larger market penetration: increased variety= grow of pie=increased consumption The mix of both is the best, hotel and airbnb is complementary labor market, Micro-entrepreneurship, democratization of opportunity. Social equality: “r” Returns on capital + of lower middle class P2P rental market: Access to rather than own durable/illiquid asset. Transaction cost, moral hazard(need reputation system), Study of P2P car rental market reveals that: 1.differently impact: affect lower-end hotels/used car more;2.gains in consumer surplus;3.suppliers/consumers of SE service are portionately below median income address economic disparities