What is the sharing economy?

The sharing economy is a peer-to-peer (P2P) economic model focused on acquiring, providing, or sharing access to goods and services. The process is as old as civilization itself, but in modern times, it is experiencing a revival with the support of community-based online platforms.

Understanding the Sharing Economy

For millennia, communities have shared the use of resources, but the emergence of the Internet and its use of big data have facilitated communication between asset owners and users. Other names for this dynamic include the peer economy, share economy, collaborative economy, and consumerism.

Through sharing economies, people and organizations may profit from underutilized resources. Unused, idle assets like parked automobiles and extra beds may be leased out in a sharing economy. Physical assets are shared as services in this manner.

Car-sharing businesses such as Zipcar might serve as examples to clarify this concept. The Brookings Institute reports that 95% of private automobiles are left unused over their lifespan. The same study examined the financial benefits of homeowners using extra bedrooms to book rooms on Airbnb’s accommodation-sharing platform rather than hotels. Worldwide, it has been stated that Airbnb costs are 30–60% less expensive than hotel rates.1. The sharing economy is changing.

Over the last several years, the phrase “sharing economy” has become more inclusive, referring to a wide range of online commercial transactions, some of which may even include business-to-business (B2B) contacts. Additional websites that have entered the sharing economy are:

Working Together Platforms: Businesses in large cities that provide shared, open workspaces to independent contractors, business owners, and remote workers.

Peer-to-peer lending platforms let people lend money to others at interest rates less expensive than those provided by conventional credit lending organizations.

Fashion platforms are websites where people may buy, sell, or rent clothing.

Platforms for Freelancing: Websites that connect independent contractors with clients for various tasks, from standard freelancing labor to handyman-only services.

The sharing economy is predicted to increase from $14 billion in 2014 to $335 billion by 2025, primarily due to the rise of Uber and Airbnb.1. The sharing economy is now under criticism.

A common criticism of the sharing economy is that it needs to be better regulated. Federal, state, or municipal governments often control businesses that provide rental services; unlicensed persons cannot adhere to these laws or pay the related fees. This may include providing them with a benefit that allows them to charge less.

Another worry is that significant abuses by consumers and sellers in the sharing economy may result from a lack of government control. Numerous well-publicized incidents involving secret cameras in leased rooms, lawsuits alleging unfair treatment of ridesharing contractors by the platforms that hire them, and even customer killings by legitimate or fictitious rental and rideshare providers have brought attention to this.

Additionally, there is concern that users may become prejudiced toward certain races or genders due to the increased volume of information exchanged on internet platforms. This may occur when users can decide with whom to share their houses or cars or when algorithms that choose people based on attributes like criminal histories or bad credit histories implicitly discriminate against those users.

For instance, owing to a widespread user desire not to rent to African-American and Latino clients, Airbnb had to deal with charges of racial discrimination. Companies have committed to addressing prejudice in their users and algorithms as more data becomes available. This is generally achieved by restricting the information buyers and sellers may access.

Conclusion

• In the sharing economy, short-term peer-to-peer exchanges are conducted to share the use of unused resources and services or to promote cooperation.
• An online marketplace linking buyers and sellers is a common component of the sharing economy.
• The sharing economy is expanding and changing quickly, but it still has a lot of obstacles to overcome, such as unclear regulations and worries about abuse.