Platforms Add Value for Consumers by Reducing Information Asymmetry

Reducing information asymmetries between consumers and service providers is one outcome, and one precondition, for “platform business models.” Greater competition for incumbent suppliers is almost always an outcome. 

source: OECD 

A company with a platform business model earns its revenue by facilitating transactions between buyers and sellers. Often such facilitation includes rankings and ratings, but almost always includes the ability to purchase or make reservations as well. Travel websites are examples. 

Other platforms monetize otherwise unused assets (rooms, clothing, tools, cars, scooters or bicycles), enabling commercial revenue creation for assets that otherwise would not be in commercial service. 

Typically, information asymmetry protects prices. So platform business models should always increase competitive pressure, first by reducing information asymmetry, and secondly by creating new competitors to existing products.