- “As people’s access to the internet grows, we’re seeing the sharing economy boom — I think our obsession with ownership is at a tipping point and the sharing economy is part of the antidote for that.” — Richard Branson, British Businessman, and philanthropist
Have you ever envisioned having an apartment on every continent and in all your favourite cities or a car in every city you visit? What of a workspace at your convenience sharing with strangers on your leisure or business trips? The only predicament is that you don’t own it, and it’s not just yours nor for you to keep.
Imagine you are one of the dozens of people who pay a tariff to access them. Do you have a problem with that? If the answer is no, you could indeed be a millennial or someone who embraces the sharing economy. These people value lifestyle over ownership and are far more likely than baby boomers to see the value in paying a low price to use a product rather than paying a high price to own a product.
The sharing economy has caused waves in the past few decades; hence it is nothing new or strange. For instance, ride-sharing platforms like Uber and home-sharing platforms like Airbnb have accelerated from start-up ventures to household names. However, it’s still peculiar that some people were surprised at their success. These early sharing platforms rode a market wave arising at the juncture of new mobile application technologies and a shift in consumer behaviour. To say the least, its timing was perfect!
But what is meant when talking about the sharing economy? And how do we cut through the noise among the varying “new economy” models? So, in layman’s terms, sharing economy focuses on the sharing of underused assets, monetized or not, in ways that improve efficiency, sustainability, and community.
To simplify it even more, sharing economy is often used to describe economic activity involving online transactions. However, it has initially grown out of the open-source community to refer to peer-to-peer-based sharing of access to goods and services.
Undeniably, our societies are gradually moving away from buying and owning and toward sharing. The concept of sharing economy first emerged out of crowdfunding. Now, the term is used in a broader sense to describe any sales transactions done via online marketplaces. It also includes sharing commodities, services or just acting as a community in activities like a peer-to-peer business.
Sharing economy is for real
Our modern societies are founded upon property ownership and buying goods that belong to an individual. Still, property ownership and buying keep matter less in our information-driven world.
Take Wikipedia, for example. It’s not possible to determine the value of Wikipedia by assessing its profits, revenue, or the value it accumulates. Furthermore, Wikipedia doesn’t belong to anyone; instead, it belongs to everyone. Information goods like Wikipedia fundamentally conflict with neoliberal market mechanisms, and we’re only going to see more of these goods in the future.
Information technology also allows for new, non-capitalist modes of production. Since the 1990s, we’ve started to develop a network economy in which money no longer determines the value of a product. Wikipedia has over 24 million registered users who contribute to it. It’s free, it doesn’t make a profit, and it’s not anybody’s property.
Information goods can be copied and shared at little or no cost, which has significant implications for the market. On the other hand, information goods are potentially unlimited, making supply and demand irrelevant.
For example, iTunes sells songs, but there’s no limit to the number of songs they can sell, and those same songs can be easily copied illegally. Whenever a person or a group of people lend out their assets they are not using or services one excels in to gain economic gains, this activity makes up sharing economy.
The sharing economy is not necessarily limited to material goods. It can also be a service provided or just community activities where people come together to fulfil a purpose. In a sharing economy, we can get in touch with an individual who has expertise in the field. Freelancing is the most famous example of the sharing economy.
Is it not better to tap into the absolute monetary value of a commodity by having someone else use it and pay for it? It makes sense and is an innovative economic and environmental choice. This also holds if we provide our services of any kind to the other person in exchange for money. In simpler words, when a person who has a skill and knowledge in a particular field uses that skill to fulfil our purpose, it brings them monetary benefits.
It may seem obvious to us, but we are already part of this sharing economy. Every day we use so many assets of this economy. Like the shared taxi we take to get to work, the food we have delivered to our home or office, or simply the rented house we live in. Other websites allow us to get things on rent when we need them temporarily, and even we can put our stuff for others to rent.
This entire exchange helps the borrower get the task done and save money on buying. At the same time, the owner earns some extra money by simply helping the other person. This is how sharing economy brings benefits to everyone. Consciously or not, we are all indulging in this economic activity.
What does the future hold?
By 2030, half our average spending will be on collaborative consumption. We will leverage services that allow us to use a product, whether a song, a car, or a workspace, without owning it. And we won’t just be sharing assets, like bikes or camping equipment.
Instead, we’ll be sharing workspaces with a mixture of firms and freelancers, we’ll be paying each other’s expenses via crowdfunding, and we’ll be financing each other’s home loans and university educations through peer-to-peer lending. Moreover, we’ll bypass institutions like banks, mainstream financial sector institutions, and real estate agencies in the process. We have already witnessed this in the accommodation sector, where fewer people stay in hotels.
It all sounds somewhat romantic and futuristic, yes? Well, there may be some drawbacks. Sharing platforms are all about flexibility. That’s great for their consumers but might be bad for their employees. By employing “flexible” temp and freelance workers, companies like Uber avoid giving their workers critical benefits like paid time off, health insurance, or retirement plans.
Despite these critical gaps for workers, the positive potential of sharing is enormous. Sharing cuts down on possessions, and fewer possessions mean less overconsumption. Moreover, sharing might help save the planet if we learn to be sustainable and responsible.
The sharing economy is not straightforward. On the contrary, it is a spectrum that is growingly pivotal to comprehend its contrasting dimensions. In the end, it will simply become part of the economy, without terminology, but we are not there yet. Therefore, entrepreneurs, journalists, governments, and (perhaps most of all) users of and participants in these new-economy platforms must be clear about whether and what we are, and are not, sharing.
The people of the communities have been sharing their assets for years now. But the introduction of the internet has made communication between asset owners or service providers and those seeking those assets or services so much easier. In one line, “sharing economy allows individuals and groups to make money from unused assets or personal services.”
In a world where the concept of “minimalism” is the new buzzword, today’s millennial generation does not wish to burden themselves with physical assets or have the time or resources to perform every task personally. The flexibility and comfort of choice appeal to the ever moving and socially conscious crowd. The sharing economy has become a burgeoning business in today’s world. In conclusion, the sharing economy has undoubtedly become the next big thing.
Guillen, F. Mauro (2020): 2030: How Todays Biggest Trends will collide and Reshape the Future of Everything. St Martins PR.
Hide o hub (2018): Trends: Sharing Economy. https://hideohub.com/sharing-economy/?lang=en
About the Writers:
Ebenezer is a Development Communication Specialist, MSME & SDG Enthusiast, Finance & Investment Nomad, and a WriterPreneur. He`s Country Director (Ag) of PIRON Global Development GmbH, Ghana (www.piron.global). Contact him via ([email protected])