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CMA Final · Entrepreneurship and Startup · Types of New Age Business

A startup runs an online platform that does not own any rooms or vehicles but connects people who have spare assets with people who wish to use them temporarily, and earns a commission on each transaction. Which new age business type does this best describe?

It is a sharing economy, or peer-to-peer marketplace, model. The platform owns no assets, simply connects owners of spare assets with temporary users and earns a commission per transaction. Franchise, contract manufacturing and vertical integration all involve different structures such as brand licensing or production.

  1. ASharing economy (peer-to-peer marketplace) modelCorrect
  2. BTraditional franchise model
  3. CContract manufacturing model
  4. DVertically integrated manufacturer model

Explanation

The platform owns no assets and only matches owners of idle assets with temporary users, earning commission. This is the core feature of the sharing economy or peer-to-peer marketplace model. A franchise involves licensing a brand to operators, and the other options involve production, which is absent here.

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