Sharing Economy
What Is the Sharing Economy?
Platform-based companies like Uber and Airbnb have reinvented how we get work and how work gets done. What is it that make these companies so different from others? Well, they have one thing in common which is the “Sharing Economy”.
Sharing Economy is a term that describes an economic model where individuals borrow or rent assets -goods or services- that are owned by another individual. Its goal is to maximize the utilization of existing assets and resources while being able to make money out of these services. Peer-to-peer interaction and building trust between both parties is a must in this type of business model.
Many companies that use the sharing economy principles rose between 2008 and 2010 after the global financial crisis. Since people started to care much more about how they spent their money, they now were looking into alternative ways which they could meet their needs. This search lead bright minds into being innovative and coming up with new business models that were both beneficial for the society and themselves.
Why Sharing Economy Has Grown So Quickly?
Sharing economy is a principle that is constantly evolving. It uses technology as a bridge between the providers and the customers. Since we live in a technology age, it is no surprise that such economy would rise. Especially when Generation Z is this interactive and comfortable with technology, it is inevitable for it to rise and keep growing.
Is the Sharing Economy Sustainable?
As every other thing this topic also has two sides of the coin.
The sharing economy has positive environmental impacts by reducing the total resources required and it helps reducing pollution and carbon footprints. For example, Airbnb uses houses that are already built. For these houses to stay empty or be used minimally by the homeowner would be a waste. Airbnb provides the maximum usage of these houses therefore maximizes the utilization of already built houses.
But recently a question mark has been raised over whether they do more damage than good. Bike sharing apps promise to reduce the number of cars on the road, however seeing the huge bike graveyards that these companies cause makes us question how eco-friendly they really are. Airbnb is also accused of contributing to the rise of rents in metropolitan areas which causes a disruption in its community.
What’s Next for The Sharing Economy?
Sharing Economy will evolve with the changing needs of the society. It needs to turn into an artificial intelligence and data driven technology to survive.
Uber is already making investments towards self-driven cars and collecting the data of users’ travel behaviors and their preference of vehicle and transportation type.
Airbnb is using collaborative filtering techniques to understand host preferences. It stores these data and creates a user profile. It is also developing an AI to evaluate if a guest is trustworthy or not.
In conclusion sharing economy is a promising economy that can be beneficial for both parties. However, we still have a long way to go before it can be very much sustainable. It still is an evolving trend, and we shall see its growth in the following years.
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