The Environmental Impact of Digital Marketplaces within the Circular Economy: A Framework

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IN

DEGREE PROJECT INDUSTRIAL ENGINEERING AND MANAGEMENT,

SECOND CYCLE, 15 CREDITS ,

STOCKHOLM SWEDEN 2020

The Environmental Impact of

Digital Marketplaces within the

Circular Economy: A Framework

SARAH R. BERDEN

JOHANNES T. GEBENDORFER

KTH ROYAL INSTITUTE OF TECHNOLOGY

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The Environmental Impact of Digital

Marketplaces within the Circular Economy:

A Framework

by Sarah R. Berden Johannes T. Gebendorfer

Master of Science Thesis TRITA-ITM-EX 2020:197 KTH Industrial Engineering and Management Entrepreneurship and Innovation Management

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Acknowledgements

We would like to thank our supervisor Terrence Brown for the constructive guidance and support throughout the process of writing this thesis. We also thank our fellow students who peer-reviewed and opposed our work. Lastly, we would like to thank Tim Bjelkstam and the entire team of Tiptapp who gave us the opportunity to conduct this research in close collaboration and who actively supported us at all times.

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Master of Science Thesis TRITA-ITM-EX 2020:197

The Environmental Impact of Digital Marketplaces within the Circular Economy: A Framework

Sarah R. Berden Johannes T. Gebendorfer Approved 2020-06-11 Examiner Kristina Nyström Supervisor Terrence Brown Commissioner Tiptapp AB Contact person n/a

Abstract

Digital marketplaces gained increased importance in the circular economy. Although their economic benefits are a popular subject in present literature, research is scarce on their environmental impact. Since economic motivations often collide with environmental motivations on digital marketplaces within the circular economy, rebound effects can occur. Therefore, it is crucial for companies to continuously evaluate the environmental value of their service. Consequently, this thesis aims at creating a framework to identify the environmental impact of digital marketplaces within the circular economy. Two important questions had to be answered in this research: How environmental impact assessment and user behavior can be combined to identify factors that influence the environmental impact of such digital marketplaces and how these factors can be incorporated into a framework. Based on a review of relevant literature on circular economy, environmental impact assessment and user behavior, a single case study was conducted on the digital marketplace of the urban logistics startup Tiptapp. Qualitative data was gathered by interviewing users. Respondents were divided into two groups depending on their role on the platform: ‘helpers’ (supply) and ‘advertisers’ (demand). The results indicated that mainly three factors influence the environmental impact: user behavior, user flow and direct interactions, and external factors. By designing the framework to outline the influencing factors and their relationship, an initial foundation has been built for digital marketplaces and their providers to evaluate the environmental impact of their services and to actively counteract concealed rebound effects. Future research is needed to facilitate generalizability of the proposed framework as well as data integration and accurate impact calculations.

Keywords: Digital marketplace, environmental impact assessment, circular economy, user

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Sammanfattning

Digitala marknadsplatser har ökat i betydelse för den cirkulär ekonomin. Även om deras ekonomiska fördelar är ett populärt ämne i nuvarande litteratur är forskning om deras miljöpåverkan knapp. Eftersom ekonomiska motiv ofta kolliderar med miljömässiga motiv på digitala marknadsplatser inom den cirkulära ekonomin kan rebound-effekter uppstå. Därför är det avgörande för företag att kontinuerligt utvärdera miljövärdet av deras tjänster. Följaktligen syftar den här studien till att skapa ett ramverk för att identifiera miljöpåverkan av digitala marknadsplatser inom cirkulär ekonomi. Två viktiga frågor måste besvaras i denna forskning: Hur miljökonsekvensbedömning och användarbeteende kan kombineras för att identifiera faktorer som påverkar miljöpåverkan av sådana digitala marknadsplatser och hur dessa faktorer kan integreras i ett ramverk. Baserat på relevant litteratur om cirkulär ekonomi, miljökonsekvensbedömning och användarbeteende har en fallstudie genomförts på den digitala marknadsplatsen Tiptapp, som är ett urbant logistik-startup. Kvalitativa data samlades in genom att intervjua användare. De svarande delades in i två grupper beroende på deras roll på plattformen: "helpers" (utbud) och "advertisers" (efterfrågan). Resultaten indikerade att främst tre faktorer har påverkan på miljön: användarbeteende, användarflöde och direkta interaktioner samt externa effekter. Genom att utforma ett ramverk för att beskriva de påverkande faktorerna och deras förhållande har en första grund byggts. Detta för att digitala marknadsplatser och deras leverantörer ska kunna utvärdera miljöpåverkan av deras tjänster och aktivt motverka dolda rebound-effekter. Framtida forskning behövs för att underlätta generaliserbarhet av det föreslagna ramverket samt dataintegration och exakta konsekvensberäkningar.

Keywords: Digital marknadsplats, miljökonsekvensbedömning, cirkulär ekonomi, använderbeteende

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List of Figures

Figure 1: The United Nations’ Sustainable Development Goals ... 3

Figure 2: A generic linear and circular economy... 5

Figure 3: Example of a product system (top) and a process tree (bottom) ... 7

Figure 4: MSP and its demarcation to alternative business models ... 8

Figure 5: Theoretical framework on the environmental impact of digital marketplaces ... 10

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List of Abbreviations

CE Circular economy

EIA Environmental Impact Assessment

ISO International Organization for Standardization LCA Life cycle assessment

MSP Multi-sided platform

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1. Introduction

Amid a rapid world population growth expected to reach up to 13 billion people in 2100 (United Nations, 2015), discussions have sparked on global consumption patterns and the availability of resources (Planing, 2014). Due to the current ‘take-make-dispose’ mentality, approximately 60 percent of products and materials in Europe were neither reused nor recycled after usage in 2010 (Ellen MacArthur Foundation, 2015). This practice is not only detrimental to the environment, but also results in a considerable loss of valuable materials. Therefore, the transition from a linear to a circular economy is demanded (ibid.).

The circular economy aims towards a closed system in which waste is avoided by enforcing recycling and reuse of products and materials to the greatest possible extent (Ellen MacArthur Foundation, 2013). This includes also the closely related movements of collaborative consumption and sharing economy in which surplus resources and underutilized assets are shared with one another (Andersson, Hjalmarsson and Avital, 2013; Sposato et al., 2017). In this context, platform-based business models have been a subject of broad and current interest over the years. By promoting digital platforms, both businesses and consumers experienced significant cost reductions in several ways (Andersson, Hjalmarsson and Avital, 2013; Sposato et al., 2017; Wirtz et al., 2019). Benefitting from this trend, a variety of services such as eBay, Airbnb and Uber emerged and were quickly adopted into everyday life (Wirtz et

al., 2019). A particularly interesting phenomenon within platform-based business models are

digital marketplaces, bringing together supply and demand in an efficient manner (Brousseau and Penard, 2007; Wirtz et al., 2019). Matching the right people can create an ecosystem in which redundancies and abundancies are mitigated, aiming for efficient use of resources and thus, contributing to more sustainable living (Cullen and Farronato, 2015; Wirtz et al., 2019). However, recent studies show that these services can also undercut their initial purpose (Erhardt et al., 2019; Don et al., 2020). Since those platforms are structured as actual marketplaces, economic and environmental motivations inevitably collide which can cause negative environmental impacts (Zink and Geyer, 2017; Guyader, 2019). While Uber for example was initially seeking to reduce the number of cars on roads through its ride-hailing service (Erhardt et al., 2019), studies concluded that the opposite can be the case (Erhardt et

al., 2019; Don et al., 2020). In effect, it is deduced that one trip with a ride-hailing service is

about 69 percent more damaging to the environment than trips with other travel modes the service attempts to substitute (Don et al., 2020). These rebound effects constitute an imminent threat to the environment while operating under the cloak of sustainability.

1.1 Purpose and Research Questions

A thorough review of relevant literature showed that digital marketplaces in the circular economy are of wide interest. While the principles, functionalities and economic benefits of such platforms are frequently researched in various contexts (Brousseau and Penard, 2007; Andersson, Hjalmarsson and Avital, 2013; Cullen and Farronato, 2015; Sposato et al., 2017; Fradkin, 2018; Wirtz et al., 2019), literature is scarce on their environmental impacts (Zink and

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Geyer, 2017; Guyader, 2019). However, as mentioned above, recent studies reveal that exactly this appears to be a significant problem (Erhardt et al., 2019; Don et al., 2020). When economic motivations collide with environmental endeavors within the circular economy, major rebound effects can be the result (Zink and Geyer, 2017; Guyader, 2019). As stated by Manninen et al. (2018), it is crucial for companies engaged in the circular economy to continuously evaluate the environmental value of their products or services. Since digital marketplaces play an increasingly larger role in this field (Andersson, Hjalmarsson and Avital, 2013; Sposato et al., 2017; Wirtz et al., 2019), it is thus important to address their environmental impacts from a research perspective which has hardly been touched in present literature.

Hence, this thesis focuses on the environmental impact of digital marketplaces within the circular economy and the underlying factors influencing it. The addressed research objective of the thesis is formulated as follows: Creating a framework to identify the environmental

impact of digital marketplaces within the circular economy.

The research objective will be tackled by answering the following research questions:

1. How can environmental impact assessment and user behavior be combined to identify factors that influence the environmental impact of digital marketplaces within the circular economy?

2. How can these factors be incorporated into a framework?

1.2 Delimitations

The delimitations draw the boundaries of this thesis and should provide a clear picture of the research focus. This thesis focuses on environmental impact with respect to digital marketplaces, specifically within the space of circular economy.

The assessment of environmental impact can be depicted as a procedure to frame and consider environmental concerns in decision-making processes (Devuyst, 2000). This involves several phases. However, since this thesis tackles influential factors and the incorporation of these into a framework, only the first part of the environmental impact assessment procedure, goal and scope definition, will be outlined (ISO 14040, 2006). The other phases are not explained considering the scope of this thesis.

The area of application is delimited to digital marketplaces within the circular economy. Digital marketplaces are often also referred to as matching platforms that serve to bring together supply and demand in an efficient manner (Brousseau and Penard, 2007; Wirtz et al., 2019). Other types of platforms are not covered in this research. Nevertheless, especially within the space of circular economy, digital marketplaces gained increased importance (Andersson, Hjalmarsson and Avital, 2013; Sposato et al., 2017; Wirtz et al., 2019). The constant tradeoff between economic and environmental motivations on digital marketplaces in the circular economy (Zink and Geyer, 2017; Guyader, 2019) pose a particularly interesting research opportunity.

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1.3 Sustainability Aspects

The term sustainability has been around for decades. Among the earliest and nowadays most common definitions resides sustainability as “the concept that current decisions should not

damage the prospects for maintaining or improving living standards in the future” (Repetto,

1986, p. 10). In this setting, sustainability has always been closely intertwined with the environment (Jabareen, 2008). However, as countries develop and economies grow, environmental resources are endangered to be exploited (WCED, 1987). The World Commission on Environment and Development discussed this matter in 1987 after deducing that “development involves a progressive transformation of economy and society” (ibid., p. 44). This is why the concept of sustainable development has been coined. Accordingly, it is built around the themes of environment, economy and society (ibid.).

The United Nations’ 2030 Agenda for Sustainable Development of 2015 contains seventeen Sustainable Development Goals (SDGs) formed on top of these three pillars (see Figure 1) (United Nations, no date).

Figure 1: The United Nations’ Sustainable Development Goals (United Nations, no date).

By targeting the environmental impact of digital marketplaces within the space of circular economy, this thesis draws a link to the SDGs. The addressed research objective and questions will essentially cover the pillar of environmentally sustainable development with single touch points to economy and society. In this context, this thesis will tackle three SDGs to a greater extent: sustainable cities and communes, responsible consumption and production as well as climate action.

1.4 Contribution to Industrial Management

This thesis contributes to the development of knowledge within the industrial management area. One of the most important aspects of industrial management is value creation. A company increases the value for their customers by targeting three pillars: marketing, production and service development (Engwall et al., 2018). Marketing consists of all the activities that increase

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the customer’s incentive to use the service. Production involves the process of transforming the input resources into a valuable service. Lastly, service development includes all the actions that develop and improve the value proposition of the company (Engwall et al., 2018).

By designing a framework that outlines the factors influencing the environmental impact and their interrelations, this thesis refers to the value creation systems of industrial management. The framework can serve as a basis for platform providers to assess the environmental value of their digital marketplaces and to better understand their services from an environmental perspective. Hence, the marketing of services can be optimized. Additionally, the framework provides indications of how the platform provider can govern the user flow. This leads to new ways to improve the value proposition of their services. Ultimately, by assessing the identified factors of the framework, companies will have the opportunity to align environmental and economic motivations and to pursue them hand in hand.

1.5 Outline

This thesis is structured in seven sections. In Section 2, relevant literature with an emphasis on circular economy, environmental impact and life cycle assessment as well as digital marketplaces and user behavior will be presented. The section will open out into a theoretical framework which will act as the starting point for the subsequent research. Section 3 outlines the research methodology of this thesis. Research will revolve around a qualitative approach coupled with a case study on the company Tiptapp which will be explained and elaborated on in Section 4. In Section 5, the results of this research will be presented before being discussed in Section 6 with respect to the theoretical framework. Ultimately, in Section 7, a conclusion is provided together with limitations and suggestions for future research.

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2. Literature Review

The following section contains a review on current research within circular economy, environmental impact and life cycle assessment as well as digital marketplaces and user behavior. Theories of the respective fields which are considered as relevant to answer the research questions are introduced, explained and set into context.

2.1 The Circular Economy

Circular economy (CE) has gained considerable attention in present literature (Kirchherr, Reike and Hekkert, 2017). One of the most established definitions by the Ellen MacArthur Foundation (2013, p. 7) sees the CE as follows:

A circular economy is an industrial system that is restorative or regenerative by intention and design […]. It replaces the ‘end-of-life’ concept with restoration […] and aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models.

As illustrated in Figure 2, the concept of CE aims at creating a closed system in which manufacturing, usage and disposal of products are tied together in such a way that waste is avoided. Hence, contrary to a linear economy, a CE is designed as a loop in which input should equal output (Ellen MacArthur Foundation, 2013).

Figure 2: A generic linear and circular economy (Munjur, Oinas and Sorvari, 2018, p. 17).

This involves large economic and environmental advantages that are discovered by various businesses (Lewandowski, 2016). Thus, it comes as no surprise that a vast set of business models emerged within and around the CE. Among others, this includes product recycling, reuse or remanufacturing models (e.g. certified refurbished parts and products) as well as collaborative consumption (e.g. carsharing) (Planing, 2014). Especially the latter fueled the movement towards the closely related sharing economy and built the basis for new businesses such as Airbnb, Rent a Runway or Share your meal (Muñoz and Cohen, 2017).

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Essential in CE business models is the implementation of respective principles into their value propositions (Ellen MacArthur Foundation, 2015; Manninen et al., 2018). Building on this, the research of Manninen et al. (2018) suggests that companies should comprehend environmental value not only as a way to achieve economic value, but as a commitment to environmental improvement in absolute terms. Central to their research is the environmental value proposition of the business model within the CE under consideration of the life cycle stages of the delivered product or service. This is complemented by the role of the stakeholders influencing the value proposition. The evaluation of the environmental value proposition occurs through five steps: the definition of the value proposition, the identification of the stakeholders and their role, the assessment of environmental impacts, the verification of the value proposition and ultimately, the identification of possible improvements (ibid.).

Especially the third step of assessing environmental impacts is a focal point. The economic view on the one hand and the environmental view on the other often collide in the CE. This friction can cause rebound effects which evidently work against the initial intention of the concept (Zink and Geyer, 2017; Guyader, 2019). As Zink and Geyer (2017, p. 593) state it:

“Circular economy rebound occurs when circular economy activities, which have lower per-unit-production impacts, also cause increased levels of production, reducing their benefit”.

Particularly profit-oriented companies pursuing opportunities in the CE are prone to such effects (ibid.). Thus, it remains of utmost importance for companies acting within the CE to continuously evaluate the environmental value of their products or services (Manninen et al., 2018).

2.2 Environmental Impact and Life Cycle Assessment

The term Environmental Impact Assessment (EIA) was introduced in research in the 1970s and experienced increased awareness over the years (Lee, 1983). EIA can be depicted as a procedure to frame and consider environmental concerns in decision-making processes (Devuyst, 2000). Various tools aiming at environmental evaluation arose in modern literature which are considered as valuable components of EIA. In this context, one of the most widespread methods for defining the environmental impact of a product is the life cycle assessment (LCA) (Tukker, 2000). It is seen as a cradle-to-grave process, meaning it includes all environmental aspects and potential impacts in the product lifecycle (i.e. from raw material acquisition until usage of the end product and finally recycling and disposal) (ISO 14040, 2006). The term ‘product’ includes in this context products, services, and product-service systems (Finnveden et al., 2009).

The LCA framework is divided into four phases: 1. Goal and scope definition, 2. Inventory analysis, 3. Impact assessment and 4. Interpretation (ISO 14040, 2006). Hereinafter, the main focus lies on the first phase of the LCA framework since it covers the formulation of the necessary parameters affecting the environmental impact which is most relevant for answering the research questions. The other phases are not explained considering the scope of this thesis (see Section 1.2).

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In Phase 1, it is essential to identify the product system which includes the whole product lifecycle (ISO 14044, 2006). Of particular importance in the product system is the determination of unit processes in every step of the lifecycle. Each unit process has specific input, output and intermediate flows to and from other unit processes (ISO 14040, 2006). The unit processes of the product system and their respective flows are identified and collectively illustrated in a process tree (Kun-Mo & Atsushi, 2004) (see Figure 3).

Figure 3: Example of a product system (top) and a process tree (bottom) (ISO 14040, 2006, p. 10).

Initially, several researchers (de Boer, 2003; Dalgaard et al., 2014; Arodudu et al., 2017) have utilized the LCA framework to measure the environmental impact of products and goods. More recent attention has been drawn towards the application of LCA for services (Sousa & Ometto, 2011; Wolfson et al., 2019). It was identified that service based LCA poses certain challenges, such as the clear determination of the service system (ibid.). Moving from a product to a service changes the focus from production to usage. In this context, it is important to note that service based LCA emphasizes the role of the user. Services can be delivered by joint value co-creation where both supply and demand invest in the service. Consequently, user behavior is a crucial factor in determining the environmental impact of a service (Wolfson et al., 2019).

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2.3 Digital Marketplaces

In the following section, digital marketplaces are categorized and defined. In doing so, the concept is illustrated and characterized with various examples. Subsequently, a closer look to user behavior with an emphasis on user motives, attitudes and intentions is provided.

2.3.1 Categorization and Characterization

Platform business models gained increased importance in the recent years. Especially influenced through the internet and mobile technologies, platforms yielded to large popularity among individuals by targeting various customer needs. Eminent examples of platforms are Airbnb, Uber or eBay which rely on the involvement of one or more parties (Wirtz et al., 2019). In the context of platform business models, the term multi-sided platform (MSP) is widely used. Essential here is, that unlike alternative business models (e.g. re-selling), MSPs follow two key features: enabling direct interactions between two or more distinct sides and each side is affiliated with the platform (see Figure 4) (Hagiu and Wright, 2015).

Figure 4: MSP and its demarcation to alternative business models (Hagiu and Wright, 2015, p. 165).

Numerous types of MSP models exist including among others booking platforms, search platforms or social media platforms. Each of them is more or less suitable for different use cases, however, are not restricted from being combined in various ways. The focus of this thesis lies on digital marketplaces, often also referred to as matching platforms that serve to bring together supply and demand in an efficient manner (Brousseau and Penard, 2007; Fradkin, 2018; Wirtz et al., 2019). One example for a digital marketplace is TaskRabbit: individuals can post tasks or errands that need to be done (demand) and hire other people who sign up to run those (supply) (Cullen and Farronato, 2015; Fradkin, 2018).

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or to small businesses. However, it is important to differentiate between peer-to-peer and platform-provided assets. While peer-to-peer provided assets describe assets and resources that are brought to the digital marketplace by the respective parties (e.g. eBay), platform-provided assets allude to assets and resources that are made available by the platform provider or marketer (e.g. WeWork). Both can include transfer of ownership or can be solely access-based (Wirtz et al., 2019).

Within and around platform models, different roles apply which form together a platform ecosystem. Not only supply, demand and the platform provider can have a direct or indirect influence on the digital marketplace, but also complementors to the platform, regulators/policy makers, incumbents, the society and other actors (ibid.). Various actors are mainly drawn to platforms to minimize transaction and duplication costs (Evans and Schmalensee, 2008). This involves among others efficient matching of peers, facilitating secure transactions and mitigating related risks (Brousseau and Penard, 2007).

2.3.2 User Behavior

Different behaviors can be detected among actors on digital marketplaces. Hawlitschek, Teubner and Gimpel (2018) argue that usage behavior in collaborative consumption is affected by attitudes and intentions which are in turn influenced by a set of motives. Motives can be described as drivers, barriers or prerequisites of usage intentions and attitudes (Hamari, Sjöklint and Ukkonen, 2016; Lee et al., 2016; Hawlitschek, Teubner and Gimpel, 2018). Examples of motives can include financial benefits, sense of belonging, privacy concerns and effort expectancy (Hawlitschek, Teubner and Gimpel, 2018). Depending on the type of actor, these can vary and need to be viewed from different angles. While for instance demand seeks as financial benefits cost reductions through avoidance of ownership, supply aims at financial benefits in terms of additional income through the utilization of excess capacities. Thus, complementarity is observable with respect to the actors’ specific motives (Benoit et al., 2017). Although attitudes and intentions are both influenced by motives, they need to be considered separately as research on consumer behavior points at a gap between these two behavioral aspects (Hamari, Sjöklint and Ukkonen, 2016). Consumers can show for example a sustainability-oriented attitude which is eventually not reflected in their intentions and is thus, not converted into actual behavior (Vermeir and Verbeke, 2006; Bray, Johns and Kilburn, 2011; Phipps et al., 2013). Reasons for this can be numerous. Hamari, Sjöklint and Ukkonen (2016) mention among others that high costs or deficient recognition can deter consumers from living up to their aspirations and act out their attitude as intentional behavior.

In the space of sharing economy and collaborative consumption, the constant tradeoff between economic and environmental motivations can also be seen in the usage behavior. Although environmental benefits are identified as drivers for users, these are considered to have little effect (Moeller and Wittkowski, 2010; Habibi, Kim and Laroche, 2016). Research by Gullstrand Edbring, Lehner and Mont (2016) has shown that in terms of usage motivations, economic reasons outweigh environmental reasons by the factor 1.5. Explanations for the low appraisal of environmentalism can be that consumers prefer to acquire their own

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“environmental-friendly” products or that the concept of collaborative consumption might be too complex for consumers to comprehend (Moeller and Wittkowski, 2010). It is assumed that consumers first, might misunderstand collaborative consumption with a cutback in the usage of goods instead of a decrease in the acquisition of goods and second, might miss the point of rental and sharing as a mean to reduce the number of newly produced goods and thus, its impact on sustainability (ibid.). The subordinated role of environmentalism may result in overuse of products and services which can lead in turn to rebound effects and negative environmental impacts (Leismann et al., 2013) as previously mentioned in Section 2.1.

2.4 Theoretical Framework

Based on the conducted literature review, the following theoretical framework is proposed (see Figure 5). The basic structure of the framework is adapted from the research of Hagiu and Wright (2015) on MSPs and enriched with theories on digital marketplaces (Guyader, 2019; Wirtz et al., 2019). This is combined with current research on LCA and user behavior to ultimately identify factors influencing the environmental impact of digital marketplaces within the CE.

The theoretical framework consists out of the platform provider and the two sides of digital marketplaces – supply and demand. The platform provider is affiliated with both peers and facilitates direct interactions between them (Hagiu and Wright, 2015). The identified factors for the theoretical framework are the affiliations of the platform provider with the peers, the user behavior of both supply and demand and lastly, the input, output and intermediate flows through the direct peer-to-peer interactions between the two sides.

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3. Methodology

In this section, methodologies to conduct this research are covered. First, the research paradigm is explained. Then, the research approach is discussed with an explanation on deductive reasoning. Afterwards, the applied case study is explained with a critical view on the method itself. In a next step, the data collection method is described which includes details about the interviews that were conducted. Subsequently, the analysis of the data is clarified and lastly, the ethics of this research are discussed.

3.1 Research Paradigm

According to Collin and Hussey a research paradigm is a “philosophical framework that guides

how scientific research should be conducted” (Collis & Hussey, 2014, p. 43). There are two

main paradigms: Positivism and Interpretivism. In case of Positivism, research involves a deductive research approach together with an explanatory theory. On the other hand, Interpretivism paradigm aims at achieving an interpretive understating of social phenomena by exploring it. The paradigm involves qualitative data, such as interviews, and an inductive approach to analyze it (Rehman & Khalid, 2016). Since the goal of this research is to create a framework to identify the environmental impact of digital marketplaces within the CE, a combination of Positivism and Interpretivism was chosen. Thus, combining a deductive reasoning approach with an explorative qualitative data collection method.

3.2 Research Approach

The research approach was chosen based on the paradigm and the goal of this thesis. There are three approaches in conducting an empirical research method: inductive, deductive and abductive. The fundamental difference between them is that inductive reasoning aims at developing a theory, while the deductive approach tests an existing one. Abductive, on the other hand, is an additional approach to tackle the deficiencies of the two others by following a pragmatist perspective (Saunders et al., 2019). Since in this thesis a framework is formulated based on literature and a case study, the deductive approach was chosen. The intention of the literature review was to combine two frameworks to form a new theoretical framework. This framework was then tested and examined by the use of a case study and the collected data.

3.3 Case Study

For this thesis, a case study method was used. This allows examining data closely within a specific context (Eisenhardt, 1989). This is mostly related to a small geographic area or to a particular group of individuals related to the research subject (Zainal, 2007). Besides this, the case study methodology allows to empirically investigate a contemporary phenomenon in real-life situations (Yin, 2018). Thus, it enables to explore and scrutinize complex issues, especially to understand the behavioral conditions of the study through the user’s perspective (Zainal, 2007). In this thesis, the case study is of explorative nature. This method is particularly useful when exploring situations without a clear, single set of outcomes (Baxter & Susan, 2008) and when there is few or no earlier work researchers can refer to (Collis & Hussey, 2014). This

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gave the possibility to ask general questions to test the framework, but more importantly to explore possibilities to adjust the proposed theoretical framework and to further enrich it (Zainal, 2007).

To identify the factors influencing the environmental impact in digital marketplaces and their interrelations, one empirical case study was conducted. The firm selected as the subject of the case study was the Stockholm-based startup Tiptapp, providing the benefit of being in close proximity to the company’s executives and users. Tiptapp’s overall service is divided into three main use cases. However, for this research the focus lied on the removals use case (see Section 4). During the case study, insights from users on both ends of the platform (supply and demand) were obtained. The gathered data from the users was expected to contain valuable insights which are of importance regarding the proposed theoretical framework and potential factors influencing the environmental impact.

3.4 Data Collection Method

Typically, a case study consists of multiple data collection methods. However, in this research it was chosen to obtain qualitative primary data from interviews conducted on Tiptapp’s users which are distinguished in ‘advertisers’ (demand) and ‘helpers’ (supply) (see Section 4). This data collection method was used since it was crucial for this research to gain knowledge about the respective user behavior. Primary data is considered as data acquired from unpublished sources. This results in more reliable, accurate, authentic and objective data (Kabir, 2016). The interview method involves the process of asking questions and receiving answers from participants (ibid.). The face-to-face interview is a popular method, due to the benefit of observing emotions and thus, receiving extra nonverbal data. However, telephone interviews give the same accurate verbal data as the face-to-face method. Moreover, they have the advantage of being cheaper and faster to conduct. Therefore, it was chosen to conduct the interviews by phone.

Since participation was voluntary, the interviews were obtained from users who wanted to share their knowledge and experiences. Based on the user types on Tiptapp’s platform and their involvement on the digital marketplace, the interviewees were divided into two main categories: advertisers and helpers (see Section 4). Subsequently, the users were chosen accordingly, whether they are ‘occasional’ or ‘heavy’ users. The term occasional is used when 10 to 50 ads were posted or picked up, while heavy means more than 50.

The interviews were chosen to be conducted in a semi-structured way. Therefore, two interview guides (see Appendix A and Appendix B), one for each user type, were prepared. The guides consist of a list of questions that needed to be covered at any given time during the interview. This design was chosen so that it was easy to conduct the interviews, but that there was also room to go off topic during the conversation if appropriate (Bloom & Crabtree, 2006). This provided opportunities to identify new insights about the theoretical framework. The interviews with the advertisers and helpers had an approximate duration of 15-25 and 30-45 minutes

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cover more of the user flow than advertisers (see Section 4). In total eight advertiser and two helper interviews were executed. The interviews were conducted by both of the authors. One person led the conversation, while the other one took notes. The interviews were sometimes shorter than the norm which is 30 minutes to several hours (ibid.). However, the interviews were more robust. Considerable, valuable information was gathered from the interviews, so that an extension of the interviews was not felt to be necessary. Besides this, the presence of two people during the interviews increased efficiency.

3.5 Data Analysis

The data was analyzed manually and based on the four key steps described by Collis & Hussey (2014) to obtain valuable results. The process included comprehending, synthesizing, theorizing and recontextualizing the data. First, all the data was perused to comprehend the content and setting of the interviews. Second, the data was coded to analyze different concepts of the interview. Preliminary codes (e.g. brief descriptions) were given to specific interesting parts of the interview to organize the data into meaningful groups (Griffee, 2005). Afterwards, the codes were aligned into themes and striking patterns were identified which are described in Section 5. Thereafter, the results were grouped in different key findings that are discussed in Section 6. Besides this, the findings were compared with the theoretical framework suggested in Section 2.4. If the findings did not match with the framework, additional categories were added and an updated framework for digital marketplaces was proposed.

3.6 Research Quality

To evaluate the quality of this research, validity and reliability are important concepts. First, reliability indicates if the method is consistent and therefore gives information about the credibility of the research. If the same results can be achieved when doing the research again under the same circumstances, the method is reliable (Kirk & Miller, 1986). In this research, the focus lied on ten people using Tiptapp to collect insights about the theoretical framework. The authors are aware of the fact that the number of interviews is limited and thus, affects the reliability in a negative way. Further, it should be stated that the interviews can be biased since for example only volunteers participated, some participants were more responsive than others resulting in more in-depth explanations and there may was a barrier of conducting the interviews in English instead of the respondents’ native language. Also, researchers themselves are often biased and therefore influence the findings and conclusions. To tackle this, it is important to be as objective as possible when analyzing the data to keep reliability (Zainal, 2007). In addition to this, reliability is affected positively by clearly describing and documenting the data collection method. Therefore, the authors gave a thorough explanation about this procedure in Section 3.2 and added the interview guides in the appendix. Thus, this research can be viewed as reliable and allows that the same results can be obtained by future researchers if the above procedure is followed.

Second, validity indicates if the method is accurate and therefore, specifies if the method measures what it is intended to measure (Kirk & Miller, 1986). There are two types of validity: internal and external. “Internal validity refers to how the research findings match the reality,

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while external validity refers to the extent to which the research findings can be replicated to other environments” (Pellissier, 2008, p. 12). Thus, the internal validity measures errors that

can occur during the data analysis, while external validity assesses the generalizability (Saunders et al., 2019). Errors are reduced to a minimum by clearly describing the data analysis and by double-checking (i.e. once by each of the authors) the analysis of the data. Generalizability, on the other hand, is harder to obtain. Since this research uses a single case study method on a small number of users, it is difficult to generalize the findings (Zainal, 2007). However, the goal of this thesis is to create a framework to identify the environmental impact of digital marketplaces within the CE. This is based on propositions which need further research to be validated and tested properly. Therefore, generalizability does in this stage not pose a problem yet.

3.7 Ethics

In this research, the ethics guidelines laid out by the Swedish Research Council (2017) were followed. The participants were informed about the method, aim, and intentions of the study beforehand by email. It was clearly explained that cooperation was completely voluntary and anonymous throughout the entire study. Besides this, the interviewees also had the right to withdraw from the study at all times. Lastly, personal information (email address and phone number) obtained from the participants is not shared following the GDPR rules obligatory for Tiptapp.

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4. Tiptapp

The startup Tiptapp was founded in 2015 in Stockholm by Tim Bjelkstam, David Höök, Fredric Rylander and Anders Lövbrand. Launched with its mobile application in 2016, Tiptapp currently registers over 300,000 application downloads and operates in cities throughout Sweden as well as in London. As of now, Tiptapp employs 12 full-time employees within the areas of business development, controlling, application development and customer support. The startup is backed by angel investors and investment firms such as Otiva and GP Bullhound with a total funding amount of USD 7.5M. In 2020, Tiptapp was listed by TNW among Europe’s top startups in the category Circular Economy & Sustainability (Bjelkstam, 2020).

The idea behind Tiptapp is the transportation of goods in urban areas through a digital marketplace. On the platform, users can post ads about goods to be delivered in or out of their household and hire other users to take on that (ibid.). The company maintains three main use cases:

1. Move/deliver comprises the transportation of things from A to B in exchange for payment without transfer of ownership of the goods (ibid.).

2. Give-away can be depicted as an in-app second-hand market in which advertisers are giving away goods to be picked up for free (ibid.).

3. Removals covers used products and materials that are “payed away” by advertisers. Helpers pick up the items and bring them to collection stations in exchange for payment (ibid.).

The following elaborations are solely centered around the category removals. The company name Tiptapp is thus, hereinafter used interchangeably for the removals use case. Here, as indicated above, Tiptapp operates as a digital marketplace bringing together advertisers and helpers to bring away recyclable products and materials to collection stations. The respective user flow can be depicted as follows: Advertisers who might not have the right vehicle or sufficient time at hand to bring their recyclables away are matched with helpers who are able to offer exactly that in exchange for payment. Advertisers can post ads by uploading pictures of items they want to get rid of and by inserting details regarding pickup location, desired pickup time and the size of the items. They then set a price they want to pay to helpers for the pickup and disposal of the items. Helpers send requests to the ad and get selected by the advertisers thereupon. The selected helper drives to the pickup location, collects the respective items and transports them accordingly to recycling stations or centers. After disposing the items, the payment is activated by the advertiser and the ad is finally closed (ibid.).

According to the taxonomy of Wirtz et al. (2019) introduced in Section 2.3.1, Tiptapp acts as a digital marketplace with peer-to-peer provided assets including transfer of ownership in the field of removals collection and recycling. In doing so, the company contributes to the CE by aiming at reducing possible frictions within traditional waste collection and recycling models.

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5. Results

In the following, the results of the interviews with Tiptapp’s users are presented. The qualitative data out of the interviews was analyzed according to Section 3.5 and categorized into the themes and patterns of demand, supply, interactions supply and demand, platform provider and external factors.

During the interviews, two different waste collection possibilities in the respondents’ city Stockholm became apparent. To avoid ambiguities, these are briefly distinguished in advance. Hereinafter, recycling stations refer to containers that are spread area-wide in the city for smaller removals whereas recycling centers represent large facilities which are located outside of the city for items bigger in size.

5.1 Demand

On the demand side of the digital marketplace, two recurring themes were noticeable: user behavior and changed behavior.

User Behavior

Throughout the interviews, insights have been gathered regarding the behavior of eight different advertisers on Tiptapp’s digital marketplace. The results are presented with a focus on the usage as well as the underlying motivations.

First of all, user behavior has been analyzed by looking at the waste removal frequency, given here in decreasing order. One of the advertisers (Advertiser 2) has claimed to post ads daily, while another one (Advertiser 8) has clearly stated that he uses the platform every two weeks. Furthermore, three advertisers (Advertiser 4, 5 and 7) mentioned to be active once to twice a month, of which one (Advertiser 5) only during Spring and Autumn. The remaining three (Advertiser 1, 3 and 6) were the least active, as they use the platform every third week to once a month.

Second, also the waste volumes were analyzed among the interviewees. The majority of the advertisers are used to posting an ad for removals of medium to large volumes. Advertiser 1 for example, mentioned that he usually gets rid of three big garbage bags together with one cardboard box and Advertiser 6 clarified that he removes two to three large garbage bags every ad. The remaining advertisers were unable to specify their volumes, as they ranged from small to big.

Third, insights about recycling station and center proximity, and types of waste removal were discussed. Two advertisers did not know at all how far the next recycling station or center is, while the other advertisers only gave an estimate. However, the distance to the nearest recycling station or center often did not matter in deciding how to handle the waste. Only Advertiser 3 stated that he would walk to the recycling station if it takes less than 15 minutes

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depends on having a proper waste system in your residence. Furthermore, half of the advertisers have clearly explained that they do not use the digital marketplace for their household waste. Advertiser 5 for instance, uses it only for garden waste, moving boxes or occasional furniture removals, while Advertiser 7 uses Tiptapp’s service only when waste larger in volume than his household waste needs to be removed. Advertiser 1 also specified that paper is collected by another service.

Although the ad frequency or the volume of waste might be the same for several advertisers, their underlying motivations could differ. Advertiser 1 has stated that he sorts and piles up the waste as much as possible beforehand. Therefore, the removals are only being picked up after filling up his storage area. This also applied to Advertiser 5 and 6, who possess a special removals corner for storage as well. However, Advertiser 5 did not mention any further specifications about his motivation, while Advertiser 6 elaborated on the importance of efficiency. Additionally, half of the advertisers have mentioned that the frequency and volume of the ads are determined by convenience. Especially Advertiser 2 revealed his “addiction” to the service since he is purely caring about efficient logistics and not necessarily the environment. Lastly, Advertiser 7 has indicated the ease to be more environmental-friendly by trusting helpers in sorting out the randomly removed waste.

Changed Behavior

During the interviews with advertisers, additional questions have been asked to gain insights into how the use of Tiptapp changed their behavior. This section shows the change in waste removal frequency and volume, along with the underlying motivations for this changed behavior.

Five advertisers stated that the frequency of removing their waste has increased. On the other hand, the waste removal frequency of two advertisers (Advertisers 3 and 6) has decreased, while it remained the same for Advertiser 1. Important to note are the different underlying motivations for this change in frequency. The majority has indicated that it was determined by convenience which is perceived differently by each advertiser. Advertiser 2 for instance, mentioned that Tiptapp offers a cheap, fast and flexible alternative to costly and rigid governmental agencies. Two other advertisers (Advertiser 7 and 8) added that they regularly rented a car or trailer to get rid of their removals before using Tiptapp. Advertiser 8 stated the ease to dispose different kinds and bigger volumes of waste at once. Besides this, Advertiser 4 stated that he appreciates not having to remove the waste himself and therefore, does not need to use his car in the process. Consequently, he accumulates fewer waste before removal. Convenience as the underlying motivation is also mentioned by Advertisers 3 and 6, who experienced a decrease in waste removal frequency. Since Advertiser 3 has changed his living situation, the recycling center became too far to walk in his opinion. Tiptapp has been a convenient solution to this problem. Lastly, Advertiser 6 mentioned that the volume of his waste was always too big to fit in his car, resulting in multiple car rides to the recycling station or center. Thus, using Tiptapp improved his time efficiency significantly.

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It is noteworthy that both Advertiser 1 and 5 had to think when the following question was asked: “What did you do with the removals before using Tiptapp? Why?”. Both did not remember clearly what they did before using Tiptapp and did not think of using any other service anymore for the same type of removals.

Besides the change in behavior concerning the frequency, some advertisers developed different perspectives towards the environment. Advertiser 1 for example, expressed an increase in sorting and recycling behavior. He stated that Tiptapp has encouraged him to put more effort into sorting the waste and to properly recycle soft plastics, hard plastics and cardboard. This increased diligence in sorting behavior has also been noticed in Advertiser 5 who pointed out that he now sorts his waste in two piles, garbage and charity, to enable the reuse of useful things. On the other hand, Advertiser 8 mentioned that he does not sort that much anymore, but still tries to separate between reusable and recyclable goods.

5.2 Supply

Throughout the interviews, findings have been collected regarding the behavior of two helpers on Tiptapp’s digital marketplace. The results are presented with focus on user behavior. Here, two specific topics were visible: transportation and recycling behavior.

Both helpers mentioned that Tiptapp serves as a side job and that their participation in the digital marketplace is monetary driven. They elaborated that time and money are important incentives and added that they intend to drive economically. Because of this, they claimed to be as efficient as possible when picking up removals and stated that they aim at bundling several ads together until the car is full before driving to the recycling center. Helper 2 added that he tries to minimize driving with an empty truck by planning his route to the best extent. Since the motivation of the helpers is monetary driven, they mentioned that they pick up removals close to home, reducing their gas usage. Notable is that Helper 2 even focused only on picking up removals outside of Stockholm City to avoid traffic and additional taxation costs. Not only the transportation behavior, but also the recycling attitude has been discussed. Both helpers pointed out that occasionally they have taken some removals to reuse for themselves or acquaintances. Helper 1 specified that this happened 10-15 percent of the time, while Helper 2 stated that he has kept an item once every five times. Besides this, the helpers elaborated that they are ecologically minded. Helper 1 mentioned that Tiptapp helped him to increase his environmental awareness and that he tries to be as eco-friendly as possible. However, he did not specify how he is putting this into practice. Helper 2 highlighted his correct recycling behavior. He clarified that he focuses on making the right choices when categorizing waste in the recycling station. Additionally, he tries to avoid mixed waste (i.e. object that consists out of different materials), since it is difficult to classify it correctly.

5.3 Interactions Supply and Demand

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Three out of eight advertisers (Advertiser 1, 3 and 8) were worried about helper behavior regarding the proper recycling of their posted items. Although none of them had experiences where a helper dumped the removals, they raised respective concerns due to rumors or news articles. The three advertisers stated that they still continue using the service and do not think that it might deter other users or potential users. However, Advertiser 8 mentioned that for materials which might be more difficult to recycle (e.g. aluminum), he would prefer other options than Tiptapp. Advertiser 1, 3 and 8 sort their removals beforehand or make it visible what belongs to what to facilitate the recycling process. On the other hand, another respondent (Advertiser 7) stated that he does not sort his removals, but places trust in the recycling behavior of helpers and believes that they do it in a more environmental-friendly way than he would. Both of the two interviewed helpers indeed pointed out to be as ecological as possible and to recycle thoroughly. As already mentioned under Section 5.2, Helper 2 explained that he deliberately takes his time at the recycling center and focuses on putting the removals into the right spot. Nevertheless, he claimed that mixed waste is difficult to recycle properly and that he tries to avoid ads like this.

With respect to advertiser-helper communication, Advertiser 6 and 8 as well as Helper 2 mentioned that they value active communication with the respective peer and clear descriptions of ads. Advertiser 6 is aware of the fact that some of the advertisers are dishonest or unclear with the workload of specific ads. Advertiser 8 mentioned that helpers sometimes try to get more money when picking up the posted items since they claim that the volume is larger than stated in the ad. Helper 1 confirmed that once every week he is confronted with an ad that turned out to be heavier or larger than previously assumed due to unclear advertiser information. This leads to regular cancellations and unnecessary rides for him. Helper 2 on the other hand reported that he has never been in a situation where an ad was not described correctly. He added that he likes to have an active communication with advertisers through calls or text messages and asks for additional information or for clarifications in case of ambiguities. Moreover, Advertiser 8 added the user rating system of the digital marketplace as an essential aspect for communication between users.

5.4 Platform Provider

Throughout the interviews, statements regarding the user flow and the importance of the service were provided which can be allocated to the platform provider and its affiliation with the users.

During the interviews the question “Is there anything else you would like to comment on

regarding environmental impact? Anything that crossed your mind while using Tiptapp?” was

asked. Two out of eight advertisers (Advertiser 1 and 8) stated that the platform provider should introduce additional quality checks to control helper recycling behavior. Advertiser 6 suggested to implement memos in Tiptapp’s application to categorize the removals (e.g. electronic waste) for the helper and thus, to simplify recycling. The respondents not only uncovered single frictions or improvement potentials in the user flow, but also showed their engagement towards Tiptapp’s digital marketplace.

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As previously mentioned, two of the eight interviewed advertisers (Advertiser 1 and 5) did not remember exactly how they got rid of removals before using Tiptapp. Both of the advertisers also stated that they do not think of choosing another option. All of the respondents expressed their overall satisfaction with the service and how important it is in their daily life.

5.5 External Factors

Although factors outside of the theoretical framework were not specifically emphasized during the interviews, marginally external aspects were mentioned by the respondents. These revolved around both advertiser and helper behavior.

Advertiser 3, 7 and 8 described their housing and living situation as factor affecting their user behavior. Advertiser 3 explained that how he uses Tiptapp changed after he moved into a different apartment. Before he moved, the next recycling station was on the way to the subway which is why he brought away removals by himself. After he moved, he started using Tiptapp more frequent since the next station is not on the way anymore and according to him, too far away. Advertiser 7 assumed that the usage of Tiptapp depends on the trash system in the residential building of the respective user. He could imagine that people use Tiptapp if a proper trash system is not in place. Advertiser 3 and 7 added that they do not have a car and also no easy access to one. In relation to that, Advertiser 8 stated that he often had to rent a trailer to bring his removals away.

Both of the helpers stated complications at the recycling centers. Helper 2 mentioned that the employees at the centers often see Tiptapp helpers as professionals and not as private persons. The staff would then ask him to pay for dropping off the removals although it is usually free for private usage. He added that it bothers him to constantly argue with the staff. Helper 1 claimed that the staff at the recycling center sometimes makes it hard to recycle properly. In some of the centers he gets thorough instructions on where to put what kind of waste. He mentioned that this was especially helpful when he was starting to learn Swedish and could not understand the signs at the recycling centers. However, in other centers he experienced unfriendly employees who would not help him out in case of uncertainties. He mentioned that sometimes the staff has expressed reservations on helpers once they found out that they are Tiptapp users. Then he would not receive instructions or explanations from them. In some cases, he was asked to leave or even denied access to recycling centers.

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6. Discussion

After reviewing the research results and examining them against both literature from Section 2 and the proposed theoretical framework from Section 2.4, the following key findings can be put forward. The findings revolve mainly around the three themes of user behavior, user flow and direct interactions, and external factors. Throughout the discussion these findings are applied to validate and ultimately update the theoretical framework accordingly (see Figure 6). It is important to mention that the previously assumed factor of affiliation of the platform provider with the peers was not directly visible in this research. It might still be a relevant factor when determining the environmental impact of a digital marketplace, wherefore it is also considered in the updated framework. However, it is not a fundamental part of this discussion. Thus, hereinafter the three factors as mentioned above are referred to as main factors.

Figure 6: Updated framework on the environmental impact of digital marketplaces.

6.1 User Behavior

For supply and demand, user behavior is considered as a relevant factor since it is important to understand the specific motivations of the users when taking part in a digital marketplace (Hamari, Sjöklint and Ukkonen, 2016; Lee et al., 2016; Hawlitschek, Teubner and Gimpel, 2018). Section 5.1 and 5.2 pointed out that advertisers and helpers can be driven either by economic (e.g. convenience) or environmental (e.g. environmental awareness) motivations. Here, the two drivers can be directly linked to environmental impact and give indications on whether certain aspects are beneficial or detrimental to the environment.

Among some advertisers, environmental tendencies were visible. These often took the shape of storing and piling up removals before getting rid of them which ultimately results in less rides for helpers. In two cases, Tiptapp triggered increased diligence in sorting and recycling for advertisers. These environmental motivations lead to behavior beneficial to the

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environment since unnecessary rides for small ads are avoided and a more conscientious recycling behavior is facilitated.

However, most of the interviewed advertisers stated convenience as their main driver in using Tiptapp. This often resulted in higher frequency and smaller volumes of removals than before using the digital marketplace. Furthermore, in some cases it was visible that one emission-free mode of transport (e.g. walking) got substituted by a less sustainable alternative (e.g. helper with car) due to the pure focus on convenience. Thus, it can be argued that these advertisers relish the degree of convenience to such an extent that it changes their behavior in a negative way. This would mean for instance that more rides have to be done for theoretically the same amount of waste or that sustainable modes of transport get substituted by less sustainable options. The outcome of this would be a negative environmental impact.

On the other hand, two advertisers stated that they usually rented a car or a trailer to bring their removals away, while another advertiser mentioned that he had to drive multiple times to the recycling station or center to get rid of all of his removals. By using Tiptapp, on an overarching level, the advertisers eliminated several rides since no detours to the rental station have to be taken or due to the helpers being able to load more removals into their vehicles at once. Thus, it is noticeable that although the behavior was triggered by convenience aspirations, it led to a decrease in the number of rides which ultimately results in a positive environmental impact. The link between economic motivations and positive environmental impacts can also be seen among helper behavior. Both of the interviewed helpers stated that they use Tiptapp due to economic reasons such as additional income. However, surprisingly exactly this motivation appears to have an unintentional positive environmental impact in terms of transportation and recycling. The two helpers made clear that they are eager in bundling several ads that are close by and to drive to the recycling station or center only once their vehicle is full. This saves time and gas and thus, increases their profit, while at the same time allowing efficient waste collection and the avoidance of unnecessary rides which can be considered as beneficial to the environment.

Moreover, it stands to reason that the more ads helpers complete, the more practice they get in the recycling process and ultimately, the more experienced they become in sorting and disposing the removals. One advertiser substantiated this by stating that he believes that helpers recycle more thoroughly than he does. Hence, Tiptapp helpers may demonstrate a better recycling behavior than regular people which results inevitably in a positive environmental impact. In relation to that, it is also important to mention that both of the helpers regularly kept an item for reuse from advertisers. As concluded by the Ellen MacArthur Foundation (2013), the direct reuse of products or materials has a larger positive environmental impact than recycling.

As the focus of this thesis lies on digital marketplaces within the CE, the aforementioned conflictive economic and environmental motives (Zink and Geyer, 2017; Guyader, 2019) were of particular interest when examining the user behavior and related environmental factors. In

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in a positive way to the environment, whereas users with economic motives often show behavior detrimental to the environment. However, surprisingly it was also identified that on Tiptapp’s digital marketplace positive impacts on the environment occur which are not caused primarily by environmental, but rather by economic motivations. In this context, contrary to studies regarding for instance the congestion of ride-sharing services (Erhardt et al., 2019; Don

et al., 2020) and research on the connection between profit-driven companies in the CE and

negative environmental impacts (Zink and Geyer, 2017), this shows that Tiptapp’s digital marketplace might not be as prone to concealed rebound effects than others. Nevertheless, to evaluate this thoroughly, additional data needs to be collected on the given subject. This may involve for instance the degree of capacity utilization of the helpers’ vehicles or further comparisons to traditional collection services. In a second step, other digital marketplaces within the CE could be examined to validate this proposition.

6.2 User Flow and Direct Interactions

The results in Section 5 showed that what comes in and out of Tiptapp’s digital marketplace is not only directly influenced by the single advertiser and helper behavior, but also by the user flow and the direct interactions between the two peers. As previously mentioned in Section 2.4, this can be connected to LCA and the input, output and intermediate flows as well as unit processes.

As indicated above, most of the interviewed advertisers stated convenience as their main driver in using Tiptapp. This often resulted in higher frequency and smaller volumes of removals. Interestingly, this advertiser behavior has inevitable influence on the helper behavior. The input and output of the demand side (e.g. increased ad frequency) determines the input and output of the supply side (e.g. increased number of rides). Thus, having a unit process, such as transportation, the input, output and intermediate flows are not only affected by the distinct user behavior, but also the relation between the users.

These mutual dynamics were especially visible when advertisers and helpers had direct interactions with each other, such as during the pickup process. One helper stated that once every week he is confronted with an ad that is larger or heavier than indicated by the advertiser, while one advertiser admitted that some users are dishonest with the workload and insert unclear information about the ad. As a reaction to that, helpers sometimes try to get more money when picking up the posted items since they claim that the volume is larger than stated in the ad. Furthermore, it was also indicated by some respondents that the user rating plays an important role on the digital marketplace. It is directly related to the behavior and the performance of the users. For helpers, a bad rating by advertisers could mean that they are not getting selected for new tasks which could lead to losing their additional income. This might be an explanation for the thorough recycling behavior of the two helpers. They are incentivized to recycle conscientiously in order to achieve a good rating and in return, to receive more tasks to take on. This shows that the behavior of one side of the digital marketplace influences the behavior of the other and determines the respective flows which can be in this case cancellations, unnecessary rides or good recycling behavior.