Introduction
The current literature on sustainable business models suggests an excellent potential for these models to address environmental and social challenges. The circularity principles, which aim to shut the loop between production and consumption to reduce waste and adverse environmental effects, are frequently the foundation of sustainable business models (Bocken et al., 2016; Geissdoerfer et al., 2017; Rosa et al., 2019). There are many different ways to operationalize circularity within a business model. Several businesses have already begun implementing product-as-a-service (PaaS) models that offer customers access to products on a rental or subscription basis. Swapfiets is one such company that has built its business model around PaaS (Bocken et al., 2014). Swapfiets operates in several European cities, providing customers with bicycle access on a monthly subscription basis (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). The company aims to make cycling more accessible and convenient while reducing traffic congestion and air pollution. This chapter will address these inquiries: What research has been done recently on sustainable business models? What key concepts, debates, and frameworks have emerged in this field? How can sustainable business models address environmental and social challenges?
Sustainable Business Models
Sustainable business models aim to minimize negative consequences while maximizing good ones by considering how their operations affect the environment and society (Bocken et al., 2013). Bocken et al., 2013 provide an assessment of the literature and current best practices to create sustainable business model archetypes. To develop such models, the authors suggest the following different archetypes: Repurpose the business for the benefit of society and the environment, take a stewardship stance, promote sufficiency, turn waste into profit, develop scale-up solutions, take a position of providing functionality rather than ownership, replace with renewable energy sources and natural processes, provide functionality rather than ownership, and maximize material and energy efficiency (Bocken et al., 2013, p.48). Moreover, the authors provide an overview of the concept of SBMs, before discussing the main findings of their literature review. In particular, they highlight the importance of stakeholder engagement, resource efficiency, and innovation in developing SBMs.
In another study, Marina et al., 2019 describe the many strategies for developing business models for a circular economy. They start by discussing the idea of a circular economy and then look at how firms might attain circuity by innovating their business models. (Marina et al., 2019). The authors review different approaches to business model innovation for a more sustainable economy (Marina et al., 2019). They discuss how a circular economy must replace the conventional linear economy, where resources are reused and waste is minimized. They then describe various business model innovation approaches, including collaborative platforms, business ecosystems, and value networks (Marina et al., 2019). Finally, they discuss how these approaches can create more sustainable businesses and achieve circular economy goals (Marina et al., 2019).
Principles of Circular Economy
A circular economy is a production and consumption paradigm that strives to reduce waste and extend the useful life of materials (Rosa et al., 2019; Bocken et al., 2016; Geissdoerfer et al., 2017). It is predicated on the notion that people should strive to build goods and systems that can be recycled, mended, or utilized again rather than being thrown away as trash (Rosa et al., 2019; Bocken et al., 2016; Geissdoerfer et al., 2017). Businesses may lessen their impact on the environment and save money by using resources more effectively. Companies can implement the circular economy principle in various ways, such as employing recycled materials, designing items to be durable and repairable, or leasing goods rather than selling them (Rosa et al., 2019). By implementing these strategies, firms can build more environmentally and socially responsible business models (Rosa et al., 2019; Bocken et al., 2016; Geissdoerfer et al., 2017).
Stahel presents the foundational ideas of the circular economy in his book. She Begins with the notion that the current economy is linear and not long-term sustainable (Stahel, 2019). The book then describes the circular economy based on closed-loop systems where resources are used and reused instead of wasted (Stahel, 2019). The book discusses how this can be applied to various industries and provides case studies of businesses successfully implementing the circular economy model (Stahel, 2019). Waste elimination is the central tenet of the circular economy. Products are instead made to be recycled, repaired, or reused. By doing so, pollution is avoided, and resources are saved (Stahel, 2019). The circular economy’s other fundamental tenet is that it is built on closed loops (Stahel, 2019). It indicates that resources are continuously utilized and circulated rather than disposed of or burned. The old linear economy, where resources are used once and then thrown away, is far less effective than the circular economy (Stahel, 2019).
Additionally, Ellen MacArthur talks about the idea of a circular economy and how it could solve many of the problems of the present linear economy. She claims that a circular economy eliminates waste from the system and maximizes the utilization of resources (MacArthur, 2013). This lessens the adverse environmental effects while boosting the economy through improved productivity and lower waste (MacArthur, 2013).
Subscription-based Business Models
In particular, subscription-based business models have been seen as a way to reduce waste and improve resource efficiency (Van Letht, 2016 Centobelli et al., 2020; Pieroni et al., 2019). Several different subscription-based business models have been proposed. One example is using reusable packaging for products, which would be returned to the manufacturer after use. This would allow manufacturers to recycle or reuse the packaging instead of being sent to landfills. Another example is selling products as subscriptions rather than one-off purchases (Van Letht, 2016; Centobelli et al., 2020; Pieroni et al., 2019). It would allow customers to access products regularly without repurchasing them each time they ran out. It will reduce packaging waste and the need for constant remanufacturing of products, for instance, Swapfiets Company (Van Letht, 2016). Subscription-based business models can change how businesses operate and could help reduce environmental impact (Van Letht, 2016). However, it is crucial to remember that these models are still in their infancy, and more investigation is required to see how they may be successfully applied on a big scale (Pieroni et al., 2019).
Case study: Swapfiets
Swapfiets is a Dutch startup that enables people to subscribe to a bicycle for a monthly fee, with the option to return the bike anytime (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). The company was founded in 2014 by three students tired of seeing bikes abandoned in canals and wanting to make cycling more accessible (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). Since then, Swapfiets has swiftly expanded, entering various European nations and introducing an e-bike service in 2019. The company’s successful business strategy emphasizes the circular economy’s goals of promoting sustainable mobility and minimizing waste. The subscription-based business model used by Swapfiets has been praised for its creativity and viability, but it also has significant drawbacks (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). For instance, Swapfiets must always have new bikes available to satisfy demand because customers can return them anytime. Logistics- and money-wise, this can be challenging to manage, particularly as the business expands (“SWAPFIETS,” 2021). In addition, although the monthly price is intended to cover all maintenance costs, unanticipated repairs or damages could still happen and cost customers more money (“MAKING CYCLING,” 2023). Notwithstanding these difficulties, Swapfiets’ novel business strategy benefits the sector and encourages environmentally friendly modes of transportation. We may anticipate even more beneficial changes from Swapfiets as the business expands.
Impact of Swapfiets on Sustainable Mobility
Swapfiets company has pioneered a new business model for sustainable mobility. Under its subscription-based system, users can rent bicycles for a monthly fee, with the option to swap out their bikes for a new one if they experience any problems (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). This model has had a positive impact on sustainable mobility in several ways. First, it has the potential to reduce carbon emissions. Bicycle travel is generally much more efficient than travel by car or public transport, and Swapfiets’ bikes are designed for easy use in urban environments. It makes cycling a more attractive option for short journeys, which could lead to fewer car trips and lower carbon emissions overall (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). Second, the company’s focus on bicycle rental promotes cycling as a mode of transportation. It is essential in cities, where space constraints and traffic congestion make driving difficult and time-consuming. Swapfiets encourages more people to cycle instead of drive by making biking an easy and affordable option (“SWAPFIETS,” 2021; “MAKING CYCLING,” 2023). Finally, Swapfiets’ business model increases access to sustainable transportation. Bicycles are an environmentally friendly mode of transport often overlooked in favor of cars or public transport. However, not everyone can afford to buy or maintain a bike. Swapfiets’ subscription service makes cycling accessible to more people by eliminating the upfront cost barrier (“SWAPFIETS,” 2021).
Conclusion
The concept of circularity has gained significant traction in recent years to address the growing problem of waste and resource depletion. Swapfiets is one example of a company that is put circularity into practice by rendering a bike service model which encourages customers to recycle their bikes rather than dispose of them. However, there are still some areas where further research is needed. For example, the literature did not identify any specific methodologies or tools Swapfiets uses to track and measure its circularity performance. As such, future research could explore this topic more deeply to understand how Swapfiets monitors and evaluates its circularity. Additionally, given the growing interest in circular economy models, comparing Swapfiets’ approach to other companies implementing similar strategies would be interesting.
References
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