The Sharing Economy (SE) has demonstrated unprecedented capability in large‐scale mobilization of dispersed and underutilized private assets for collective usage. We argue that the SE represents a unique governance structure with dual nature of two‐sided market platform and modular architecture. Although the emergence of the SE is enabled by the rise of digital applications and changes in consumption attitudes, the effectiveness of this governance structure is not uniform across contexts. We analyse the roles of disparate actors in the SE and the relationships among them, in order to identify the contexts under which the SE is most likely to be the effective governance structure compared with traditional governance structures such as markets and firms, and new governance structures such as other platform economies and collaborative ecosystems. Two comparison frameworks are developed to illustrate the contextual factors that determine the effectiveness of the SE vis‐à‐vis other governance structures.