Tài liệu Some regulatory challenges arising from the operation of foreign investors providing ride hailing service under the sharing economy model in vietnam, british experience and recommendations.

HO CHI MINH CITY UNIVERSITY OF LAW FACULTY OF INTERNATIONAL LAW -----------***------------ TRAN BAO NGAN Student ID: 1651101030091 SOME REGULATORY CHALLENGES ARISING FROM THE OPERATION OF FOREIGN INVESTORS PROVIDING RIDE-HAILING SERVICE UNDER THE SHARING ECONOMY MODEL IN VIETNAM, BRITISH EXPERIENCE AND RECOMMENDATIONS. BACHELOR’S THESIS School Year: 2017 – 2022 Supervisor: Dr. Nguyen Thi Hoa Ho Chi Minh City – Year 2022 DECLARATION I hereby declare that the thesis "Some regulatory challenges arising from the operation of foreign investors providing ride-hailing service under the sharing economy model in Vietnam, British experience and recommendations" is the result of my research, conducted under the scientific supervision of Dr. Nguyen Thi Hoa, ensuring honesty and compliance with the rules on citation and annotated bibliography. I take full responsibility for this declaration. Ho Chi Minh City, June 29, 2022 Tran Bao Ngan LIST OF ABBREVIAITONS CIEM Central Institute for Economic Management Civil Code Civil Code No. 91/2015/QH13, dated November 24, 2015 Decree 10/2020 Decree No. 10/2020/ND-CP on Auto Transport Business and Conditions for Auto Transport Business. Dated January 17, 2020 Decree 126/2020 Decree No. 126/2020/ND-CP Elaboration of the Law in Tax Administration, dated October 19, 2020 Decree 31/2021 Decree No. 31/2021/ND-CP Elaboration of Some Articles of the Law on Investment, dated March 26, 2021 Labor Code Labor Code No. 45/2019/QH14, dated November 20, 2019 Law on Investment Law on Investment No. 61/2020/QH14, dated June 17, 2020 UK United Kingdom VAT Value-add tax WTO World Trade Organization TABLE OF CONTENTS INTRODUCTION .......................................................................................................... 1 CHAPTER 1: AN OVERVIEW OF THE SHARING ECONOMY AND ITS CURRENT STATUS IN VIETNAM ............................................................................ 9 1.1. Overview of the sharing economy...................................................................... 9 1.1.1. Definition and characteristics of the sharing economy .................................. 9 1.1.2. Some forms of business in the sharing economy ......................................... 13 1.2. An overview of business activities of business entities under the sharing economy concept in Vietnam................................................................................... 18 1.2.1. Operational status of business entities under the sharing economy concept in Vietnam .............................................................................................................. 18 1.2.2. The impact of the sharing economy on the overall economy ...................... 21 CONCLUSION OF CHAPTER 1 .............................................................................. 23 CHAPTER 2: MARKET ACCESS CONDITIONS FOR FOREIGN INVESTORS PROVIDING RIDE-HAILING SERVICE ............................................................... 25 2.1. An overview of market access for foreign investors ...................................... 25 2.2. Business line identification ............................................................................... 28 2.3. Specific market access conditions for foreign investors providing the road passenger transport services. .................................................................................. 29 2.3.1. Holding of charter capital by foreign investors ........................................... 29 2.3.2. Investment methods ..................................................................................... 30 2.3.3. Scope of investment ..................................................................................... 30 2.3.4. Capacity of investors and partners participating in investment activities and other conditions ...................................................................................................... 31 CONCLUSION OF CHAPTER 2 .............................................................................. 33 CHAPTER 3: SOME REGULATORY ISSUES ARISING FROM THE OPERATION OF FOREIGN INVESTORS PROVIDING RIDE-HAILING SERVICE ...................................................................................................................... 35 3.1. The essentials of a legal framework for the sharing economy model........... 35 3.2. Some regulatory issues arising from the operation of foreign investors providing ride-hailing services in Vietnam and the UK ....................................... 37 3.2.1. Employment issue ........................................................................................ 37 3.2.2. Tax issue....................................................................................................... 46 CONCLUSION OF CHAPTER 3 .............................................................................. 55 CONCLUSION OF THESIS ....................................................................................... 57 1 INTRODUCTION 1. Rationale “The sharing economy phenomenon proved to be more than just a frail and temporary trend and has been capable of overturning competition across the globe. Within the wide variety of organizations that have flourished based on the concept of “sharing” underutilized assets, a group of internet-based platform businesses have been thriving in many different industry sectors and internationally.”1 According to a Pwc’s survey, five major industries, including tourism, transportation, finance, human resources, online music and video, which apply the sharing economy model, have the potential to increase global revenue from $15 billion in 2014 to approximately $335 billion by 2025. One-third of Europe's population and seventy-two percent of North America's population have used services via shared platforms. This demonstrates that the potential for future global growth of the sharing economy is enormous. In Vietnam, according to a recent study by the Department for National Economic Issues under the Ministry of Planning and Investment, sharing economy is a new trend that goes hand-inhand with the revolution in information technology, becoming one of the key pillars of the digital economy, and is the primary concern of entrepreneurs and start-ups in many countries. Initially, the sharing economy concept has begun to attract attention from 2014, as a result of Uber and Grab’s market entry. In 2019, there were approximately sixty sharing economy businesses currently active in Vietnam, providing services ranging from transportation to lodging, finance, and labor. For instance, Airbnb, an accommodation sharing platform firm, registered 1,000 rooms to be shared in Vietnam Belk (2014) and Möhlmann (2015), as cited in Parente, R. C., Geleilate, J. M. G., and Rong, K. (2018), “The sharing economy globalization phenomenon: A research agenda”, Journal of International Management, 24(1), p.1. 1 2 in 2015; by 2018, this number had risen to 40,800 rooms, accommodating over 400,000 people annually.2,3,4 Although there are numerous foreign investors operating and thriving under the concept of the sharing economy in Vietnam, and the government also encourages this growth,5 the absence of a suitable legal framework for the operation of foreign ridehaling platform providers results in many regulatory challenges such as tax, employment, etc. Therefore, the author deems it necessary to address these issues and propose recommendations based on experience from foreign laws. 2. Literature review The concept of sharing economy piques the interest of various academics, thus, there are a great number of documents have been written about this topic, both in Vietnam and throughout the world. Some notable research is summarized in the below section. 2.1. Vietnamese materials Phạm Khánh Nam (2021), “Mô hình kinh tế chia sẻ: các vấn đề quản lý ở Việt Nam” (The Sharing Economy: Governance Issues in Vietnam), UEH Digital Repository: This article provides the definition of the sharing economy, how it functions, and how to limit its unwanted effects while promoting its growth to contribute to the development of Vietnam in the context of the Industrial Revolution 4.0. Particularly, the article focuses on the analysis of the passenger transport business of technology firms to Phạm Khánh Nam (2021), “Mô hình kinh tế chia sẻ: các vấn đề quản lý ở Việt Nam” (The Sharing Economy: Governance Issues in Vietnam), UEH Digital Repository, p. 79. 3 Trần Thị Hằng (2019), Development of sharing economy in Vietnamese in the context of the industrial revolution 4.0 and some recommendations, Journal of Science and Technology - Hanoi University of Industry, No. 54, 2019, p. 89. 4 Đỗ Thị Nhung, “Phát triển mô hình kinh tế chia sẻ ở Việt Nam và một số đề xuất” (Developing sharing economy model in Vietnam and some recommendations), Financial Journal Online, dated May 19, 2018, https://tapchitaichinh.vn/nghien-cuu--trao-doi/trao-doi-binh-luan/phat-trien-mo-hinh-kinh-te-chia-se-o-viet-namva-mot-so-de-xuat-139063.html, assessed on May 20, 2022. 5 On August 12, 2019, Prime Minister Nguyen Xuan Phuc signed Decision No. 999/QD-TTg giving approval for Scheme for Development of Sharing Economy. 2 3 highlight the common issues associated with the sharing economy model and recommend appropriate management strategies. Hà Thị Thanh Bình (2021), “Kinh tế chia sẻ và sự điều chỉnh của pháp luật” (Sharing economy and the regulation of laws), Vietnamese Journal of Legal Sciences, 02(141): This article analyzes the characteristics of the sharing economy and advocates the need for the regulation of this business model. In addition, the author examines and provides suggestions as to the content and extent to which the law should control the sharing of underutilized resources. Also, the article analyzes and proposes certain legal solutions for participants’ obligations, tax administration, and worker protection in the sharing economy. The recommendation from this article is a good source for legislators to improve the law to catch up with the development of the economy. Chu Thị Hoa (2021), “Kinh tế chia sẻ và quyền tự do kinh doanh” (Sharing economy and business freedom), Electronic newspaper of the Ministry of Justice: In this paper, the author introduces and analyzes the realization of business independence in the sharing economy model, thereby fostering the growth of this industry in Vietnam. Dương Kim Thế Nguyên and Huỳnh Thiên Tứ (2021), “Kinh tế chia sẻ và dịch vụ kết nối: Nhu cầu điều chỉnh về mặt pháp lý trong bối cảnh chuyển đổi số ở Việt Nam” (Sharing economy and connected services: legal adjustment needs in the context of digital transformation in Vietnam), Vietnamese Journal of Legal Sciences, 04(143): The study analyzes various trends in the growth of the sharing economy and makes a compelling case for the necessity to enact rules on these subjects. The authors then recommend amending Vietnamese law to cover the sharing economy development trends and intermediary service providers' activities. Lê Thị Thúy Nga (2021), “Hoàn thiện pháp luật thuế về kinh tế chia sẻ tại Việt Nam” (Perfecting tax laws on sharing economy in Vietnam), Economy & Forecast Review Online, 16(770): In the context of industrial Revolution 4.0, accessing and 4 mastering the application of science and technology, especially information technology, to the management, exploitation, and operation of sharing economy activities is an inevitable tendency. However, the current issue is how to properly manage and "stimulate" the development of the sharing economy, which is a difficult issue for many nations, including Vietnam. The article focuses on clarifying several aspects of tax legislation and tax administration in Vietnam for the sharing economy model. Trần Thị Việt Hà (2020), “Một số vấn đề pháp lý đặt ra đối với quy định phát triển mô hình kinh tế chia sẻ ở Việt Nam hiện nay” (Several legal concerns raised about Vietnam's current sharing economy legislation), Vietnamese Journal of Legal Sciences, 04(43): The article provides an overview of sharing economy as well as its current status in Vietnam. Based on that, the author demonstrates the necessity of completing the legal framework for the sharing economy model in order to foster its development and limit its possible negative effects on social life, participants of this model, and the overall economy. Trần Thi Hằng (2019), "Phát triển kinh tế chia sẻ tại Việt Nam trong bối cảnh Cách mạng Công nghiệp 4.0 và một số khuyến nghị” (Development of the sharing economy in Vietnam in the context of the Industrial Revolution 4.0 and some recommendations), Journal of Science & Technology, No. 54.2019: This article examines several aspects of the sharing economy, including its theoretical foundation and the current state of its development in Vietnam, and provide some suggestions for developing the sharing economy in the context of Industrial Revolution 4.0. Lê Huy Khôi (2018), “Xây dựng và hoàn thiện hạ tầng chính sách phát triển mô hình kinh tế chia sẻ tại Việt Nam” (Building and completing the policy infrastructure to develop the sharing economy model in Vietnam), Financial Journal Online: The article discusses the current state of the sharing economy around the world as well as in Vietnam. On the basis of an analysis of the limitations of this model in Vietnam over the 5 past few years, the article proposes orientations to build and complete the infrastructure policy in order to create a driving force for the development of sharing economy. 2.2. Foreign materials Frenken, K., and Schor, J. (2019), “Putting the sharing economy into perspective”, A research agenda for sustainable consumption governance, Edward Elgar Publishing: The paper contextualizes the sharing economy by providing a conceptual framework that allows the author to define the sharing economy and its close relatives and understand its sudden rise from an economic-historical perspective. It also evaluates sharing economy platforms in terms of their economic, social, and environmental impacts and considers current regulations and alternative platform architectures. It concludes with research questions for future study. Sundararajan, A. (2017). “The sharing economy: The end of employment and the rise of crowd-based capitalism”, MIT press: The book outlines the shift toward what the author calls "crowd-based capitalism," which is a new form of organizing economic activity that has the potential to supersede the traditional model that is centered on corporations. The author explores not just the origins of this new style of working but also its repercussions, as well as how the concept of "sharing" shapes the political economy of the "asset-light" age. The book also highlights crucial policy options and recommends possible new approaches for self-regulatory organizations, labor law, and funding our social safety net. Ranchordas, S. (2015), “Does sharing mean caring: regulating innovation in the sharing economy”, Minnesota Journal of Law, Science and Technology, 16(1): This article examines the issues of governing the sharing economy from the perspective of "innovation law," claiming that these innovations should not be strangled by regulation, but neither should they be left unregulated. This article concludes by proposing that innovation in the sharing economy necessitates fewer but broader rules that do not stifle innovation but do impose a minimum set of legal requirements that take into account the 6 particularities of innovative sharing economy practices and leave room for future development. Belk, R. (2014), “You are what you can access: Sharing and collaborative consumption online”, Journal of business research, 67(8): This research examines the similarities and differences between sharing and collaborative consumption and concludes that both are gaining popularity nowadays. Examples are presented, and an analysis of the factors that have led to the recent proliferation of these activities as well as the consequences that these practices have for businesses that continue to rely on conventional forms of sales and ownership is provided. Botsman, R., and Rogers, R. (2010), “What’s mine is yours. The rise of collaborative consumption”, Harper Business: This is a groundbreaking and original book that articulates for the first time the origins of "collaborative consumption," Rachel Botsman and Roo Rogers' new term for the technology-based peer communities that are altering the traditional landscape of business, consumerism, and the way we live. Observably, the aforementioned studies provide an overview of the sharing economy yet do not delve into the current scenario in Vietnam in terms of challenges resulting from the operation of foreign investors providing the ride-haling platform, particularly in terms of market access conditions for foreign investors, conflicts between drivers and platform providers, or tax difficulties for this new sector. Although Pham Khanh Nam (2021) analyzes some governance issues in this field, this research has not updated the regulations of Decree 10/2020 governing the automobile transport business. This is an important legal document that will be referenced in many sections of this thesis. 3. Research purposes This research has three purposes: 7 First, giving an overview of the sharing economy and its current status in Vietnam market. Second, analyzing the market access for foreign investors providing ride-hailing service in Vietnam. Third, analyzing some regulatory issues arising from the operation of foreign investors providing ride-hailing service in Vietnam (tax and employment issues) and providing some recommendations based on the approach of the UK. 4. Delimitation Despite the fact that there are numerous regulatory challenges posed by the operation of foreign investors providing ride-hailing service in Vietnam, due to the limitation of time and resources, this thesis only focuses on the two most contentious issues, which are tax and employment. Although accommodation sharing and P2P lending are mentioned in Chapter 1 as components of the sharing economy in Vietnam, they are beyond the scope of this thesis. 5. Methodologies There are four main methods used in this research, namely: analytical, synthesis, historical, and comparative. In Chapter 1, the historical method is used to point out the origin of the sharing economy, the synthesis method is used when presenting various definitions and characteristics of the sharing economy in different research. The current status of the sharing economy in Vietnam and around the world is also addressed by synthesizing the information from numerous articles and surveys. In Chapter 2 and Chapter 3, the analytical and synthesis methods are primarily used to determine the market access and regulatory challenges (tax and employment) for foreign investors investing in the ride-hailing service in Vietnam, whereas the comparative method is used to compare the differences between Vietnam and the UK on 8 these issues. In the end, the synthesis method is applied to give recommendations and conclude the thesis. 6. Thesis structure The thesis comprises three chapters as follows: Chapter 1. An overview of the sharing economy and its current status in Vietnam Chapter 2. Market access conditions for foreign investors providing ride-hailing service Chapter 3. Some regulatory issues arising from the operation of foreign investors providing ride-hailing service 9 CHAPTER 1: AN OVERVIEW OF THE SHARING ECONOMY AND ITS CURRENT STATUS IN VIETNAM This chapter explains the notion of the sharing economy, regarding its different definitions debated by scholars, its characteristics, and some forms of business models in the sharing economy. After that, an overview of the sharing economy in Vietnam is provided, specifically the operational status of business organizations doing business in this model and the impact of the sharing economy on the overall economy of Vietnam. 1.1. Overview of the sharing economy 1.1.1. Definition and characteristics of the sharing economy Despite the fact that there is no obvious connection between the terms “sharing' and “economy”, the expression “sharing economy” has emerged. “Depending on the context, sharing could mean to share: as an act of division into equal parts; as an act of distribution; as a form of common ownership; as an act of communication; or as a form of individual expression online”.6 However, the meaning of the word “sharing” has been shifting, particularly due to its widespread use on social media. 7 With respect to “economy”, it is a term of Greek origin, which generally means “the efficient allocation of scarce resources.”8 There is no consensus regarding the sharing economy’s definition. Academics and the general public have both expressed ambiguity and even confusion about the term "sharing economy."9 One reason for a common misunderstanding about the sharing economy is its novelty. In fact, human beings have always shared. “Sharing is a phenomenon as old as humankind, while collaborative consumption and the “sharing 6 John, N.A. (2013), as cited in Curtis, S. K., and Lehner, M. (2019, infra note 7, p. 3. Curtis, S. K. and Lehner, M. (2019), “Defining the sharing economy for sustainability”, Sustainability, 11(3), p.3. 8 Mueller, F. (1975), “Economic history and history of economics origins and interrelationships”, Forum for Social Economics (Vol. 5, No. 1), Taylor & Francis Group, p. 1. 9 Frenken, K., and Schor, J. (2019), “Putting the sharing economy into perspective”, A research agenda for sustainable consumption governance, Edward Elgar Publishing, p. 122. 7 10 economy” are phenomena born of the Internet age.”10 Sharing perpetuates social relationships and strengthens cultural practices.11 “Carol Stack’s classic ethnography of the dense relations of reciprocity and interdependence among poor black urbanites in the U.S.A. showed how important sharing was to survival even a few decades ago (in Stack (1974)). By contrast, Hochschild’s (2012) recent work on the growth of outsourced services among middle-class whites suggests lower and declining levels of sharing.”12 Therefore, the assertion that sharing is a recent phenomenon disregards the higher levels of sharing that the working class, the poor, and peoples of color have historically practiced and have partially maintained despite the expansion of markets. 13 Indeed, it is perceived that “the novelty of the sharing economy is the temporary access granted by the owner of the goods via a digital platform.”14 This characteristic would be discussed further below. In fact, academics refer to the sharing economy as an umbrella term that encompasses a wide range of behaviors and business models that cannot be simplified to a single description.15 While many different definitions are given by scholars around the world, the author finds that this one is the most suitable to conceptualize the sharing economy in Vietnam: “an economic activity in which web platforms facilitate peer-topeer exchanges of diverse types of goods and services”16. This definition is relatively similar to that of the Central Institute for Economic Management (CIEM), which describes the sharing economy as “a new business method of peer-to-peer business, an Belk, R. (2014), “You are what you can access: Sharing and collaborative consumption online”. Journal of business research, 67(8), p. 1595. 11 Belk (2009), as cited in Frenken, K., and Schor, J. (2019), supra note 9. 12 Frenken, K., and Schor, J. (2019), supra note 9, p. 122. 13 Ibid. 14 Pasimeni, Francesco (2020), The Origin of the Sharing Economy Meets the Legacy of Fractional Ownership, SWPS 2020-19, p.2. 15 Curtis, S. K. and Lehner, M. (2019), supra note 7, p. 3. 16 Aloni, E. (2016), “Pluralizing the sharing economy”, Wash. L. Rev., 91, p. 1397 10 11 economic system in which assets and services are shared for various users via digital platforms.”17 The sharing economy in Vietnam exhibits the following characteristics: Firstly, “the notion of sharing of idle capacity18 is central to the definition of the sharing economy.”19 Although this was originally a feature of the ride-hailing service in Vietnam, it is no longer the case now because many drivers invest in new vehicles for work rather than utilizing their existing vehicles, and the majority of drivers earn a living from this job rather than driving in their spare time to earn extra money. Consequently, it is called "ride-haling" as opposed to "ride-sharing." In contrast, Airbnb's accommodation-sharing service has the sharing of idle capacity characteristic because many people rent their empty houses to earn money. Secondly, “one of the key elements of the sharing economy is the peer-to-peer (P2P)20 aspect of sharing enterprises.”21 P2P interaction is identified as the element required for an initiative to be considered part of the sharing economy.22 This concept is not new on the Internet as many other attempts have been made in the past, such as Napster for music sharing in the late 1990s (although some authors argued that it was CIEM (2018), as cited in Chu Thị Hoa (2019), “Kinh tế chia sẻ trong bối cảnh cuộc Cách mạng công nghiệp 4.0 và một số vấn đề pháp lý” (Sharing economy in the context of Industrial Revolution 4.0 and some legal issues), Electronic newspaper of the Ministry of Justice, https://moj.gov.vn/qt/tintuc/Pages/nghien-cuu-traodoi.aspx?ItemID=2515, accessed on May 17, 2022. 18 This is the same as the notion of the “underutilized” nature of the shared resources in other research. 19 Frenken, K., and Schor, J. (2019), supra note 9, p. 124. 20 P2P is defined as “a platform (online/offline) through which a private person trades with another person or creates services for the latter (e.g., Airbnb, Blablacar)” in Malte Höfner and Rainer Rosegger, “A Critical Perspective on the Sharing Economy in Tourism Using Examples of the Accommodation Sector in Austria”, The Sharing Economy in Europe: Developments, Practices, and Contradictions, Palgrave Macmillan, Switzerland, 2022, p.287. 21 Loucks, T. G. (2014). Travelers beware: Tort liability in the sharing economy. Wash. JL Tech. and Arts, 10, p. 330, (“The sharing economy is an offspring of the peer-to-peer business model that has grown in importance in recent years”); Rassman, C. L. (2014), “Regulating rideshare without stifling innovation: Examining the drivers, the insurance gap, and why Pennsylvania should get on board”. Pitt. J. Tech. L. and Pol'y, 15, p. 81, (noting that "the sharing economy owes much of its success to advances in peer-to-peer technology") as cited in Scott, I., and Brown, E. (2016). Redefining and regulating the new sharing economy. U. Pa. J. Bus. L., 19, p. 560. 22 Chase (2015), as cited in Muñoz, P. and Cohen, B. (2017), infra note 28, p. 3. 17 12 not a good example of sharing economy as ownership shifted).23 Interactions and transactions between peers are increasingly being mediated by Internet-based networks and platforms, which are typically coordinated by trust relationships and personal reputation. This trend is also known as the peer-to-peer economy.24,25 Thirdly, technology reliance is a prerequisite. Digital platforms play a critical role, as they open up new business opportunities and provide a forum for market interactions between providers and consumers.26 Practices such as sharing, renting, and bartering have long existed prior to the advent of the Internet, but it is clear that the emergence of new web and mobile technologies has sped up and facilitated the growth of the sharing economy, resulting in a greater economic impact.27 There is a strong emphasis on the role of technology, particularly web technologies, as it is a fundamental connecting point for participants on sharing platforms in the research conducted by Belk (2014), Sundararajan (2016) and Daunorienė et al. (2015).28 Fourthly, participants are enabled to rate and evaluate each other through “reputation systems”, a common feature of application software that makes sharing economy activity often considered a self-regulating activity. Later users can rely on reviews of previous users to decide whether to use the shared goods or services.29 Meleo, L., Romolini, A., & Marco, M. D. (2016), “The sharing economy revolution and peer-to-peer online platforms. The case of Airbnb”. International Conference on Exploring Services Science, p. 562. 24 Constantiou, I., Marton, A., and Tuunainen, V. K. (2017), “Four models of sharing economy platforms”. MIS Quarterly Executive, 16(4), p. 234. 25 “Peer-to-peer economy” is described as “an economy that concerns goods that are also under-used but which are offered directly by their owners” by Pais and Provasi (2015), as cited in Selloni, D., “New forms of economies: sharing economy, collaborative consumption, peer-to-peer economy”, Codesign for public-interest services. Springer, Cham., Switzerland, 2017, p. 18. 26 Matzler et al. (2015), Schor and Fitzmaurice (2015), Puschmann and Alt (2016), Benoit et al. (2017), de Rivera et al. (2017), as cited in Pasimeni, Francesco (2020), “The Origin of the Sharing Economy Meets the Legacy of Fractional Ownership”, SWPS 2020-19, p.3. 27 Selloni, D., “New forms of economies: sharing economy, collaborative consumption, peer-to-peer economy”, Codesign for public-interest services. Springer, Cham., Switzerland, 2017, p. 16. 28 Muñoz, P. and Cohen, B. (2017), Mapping out the sharing economy: A configurational approach to sharing business modeling, Technol. Forecast. Soc. Change, p. 3. 29 Hà Thị Thanh Bình, “Kinh tế chia sẻ và sự điều chỉnh của pháp luật” (“Sharing economy and the regulation of laws”), Vietnamese Journal of Legal Sciences, 2021, 02(141), p. 32. 23 13 However, this feature was not considered a major component of the sharing economy until Botsman and Rogers published their widely read book What’s Mine is Yours in 2010. Since then, reputation systems have begun to attract the attention of various scholars.30 When comparing traditional digital markets with sharing economy platforms, the emergence and use of reputation systems are defining characteristics.31 Thanks to reputation and evaluation systems, the fact that things are shared with "strangers” is concealed.32 1.1.2. Some forms of business in the sharing economy A business model is “the design or architecture of the value creation, delivery and capture mechanisms. The essence of a business model is that it crystallizes customer needs and ability to pay, defines the manner by which the business enterprise responds to and delivers value to customers, entices customers to pay for value, and converts those payments to profit through the proper design and operation of the various elements of the value chain”.33 There are divergent ways in categorizing business models in the sharing economy proposed by scholars. Agarwal, N. and Steinmetz, R. (2022) contend that three main models of business associated with the sharing economy include: business-to-customer (B2C), business-tobusiness (B2B), customer-to-customer (C2C).34 The B2C models are structured in the same way as the conventionally understood business model, in which companies do not only “provide the platform to channel the demand, but also the supply of the goods and services for individuals”.35 Economy based Miguel, C., Martos-Carrión, E., and Santa, M. (2022), “A Conceptualisation of the Sharing Economy: Towards Theoretical Meaningfulness”. The Sharing Economy in Europe, p.23. 31 Sundararajan (2016), as cited in Miguel, C., Martos-Carrión, E., and Santa, M. (2022), supra note 30, p. 23. 32 Schor (2014), as cited in Malte Höfner and Rainer Rosegger (2022), supra note 20, p. 287. 33 Teece (2010), as cited in Muñoz, P. and Cohen, B. (2017), supra note 28, p. 2. 34 Agarwal, N., and Steinmetz, R. (2022), “Sharing economy: A systematic literature review”. Emerging Issues And Trends In Innovation And Technology Management, p.12. 35 Ibid. 30 14 on communal resources B2C companies make use of innovative technologies and operate through online platforms, but they do not involve direct interaction between customers and business owners.36 “In the C2C model, or P2P sharing, within the sharing economy, the goods are shared between co-equal individuals.” The practice of shared use can take place among individuals either without a transfer of ownership (such as in the case of co-using, lending, or renting), or with a transfer of ownership (including giving away, swapping and reselling). However, the latter is not in the sphere of the sharing economy for the purpose of this research. Nowadays, P2P sharing in the sharing economy is carried out via online platforms. This trading system, which can connect strangers in P2P marketplaces and can either be free of charge or not, involves asymmetric information and economic risks and, as a result, requires reputation mechanisms to promote participants’ confidence.37 B2B model can be viewed as a variation of the P2P model. Nevertheless, this model of sharing is frequently overlooked in the research because the majority of the definitions concentrate on private sharing. On the other hand, it is gaining more and more attention as a growing number of businesses opt to rent semi-furnished goods or services rather than purchase them.38 In another research by Constantiou, I., Marton, A. and Tuunainen, V. K. (2017), business models that make up the sharing economy can be divided into four types, namely Franchiser, Principal, Chaperone, and Gardener. Each model is classified on the basis of two dimensions: the extent to which the platform owner exercises control over platform participants (loose vs. tight), and the level of rivalry that is promoted among participants by the platform owner (low vs. high). The four models can be 36 Ibid. Ibid. 38 Ibid. 37 15 visualized as the cells of a 2x2 matrix, in which organizational coordination mechanisms are extended into the user base of the platform to regulate the control dimension, while the rivalry dimension is managed by a market coordination mechanism that was established by the platform owner.39 Franchisers, such as Uber, and Principals, such as Handy, occupy the right side of the diagram, which impose tight control over platform participants (by, for instance, standardizing procedures and issuing contracts). Franchisers encourage significant competition among participants (by prescribing the price for the service based on realtime changes in supply and demand), whereas Principals foster low rivalry (by charging standard prices for the services purchased). On the left of the matrix are Chaperones, such as Airbnb, which create high rivalry (by recommending the price of the service based on real-time changes in supply and demand) and Gardeners, such as Couchsurfing, which foster minimal competitiveness among platform members (by, for instance, allowing them only to barter for a share in the costs of the service or only to exchange gifts). Both Chaperones and Gardeners maintain loose control over platform participants (by, for instance, rewarding socially acceptable behavior and setting social norms and community values).40 Constantiou, I., Marton, A. and Tuunainen, V. K. (2017), “Four models of sharing economy platforms”. MIS Quarterly Executive, 16(4), p. 232. 40 Ibid. 39