Shared Economy

The Economy Learns how to Share

Why spend money on something if you can borrow it at a reasonable rate? This is the basic idea that shared economy takes advantage of. Property was yesterday, the future is shared. What began with car and bike sharing a few years ago has become a trend of the future in the digital world. Companies were initially annoyed by the concept because consumption was throttled. However, this is changing thanks to the shared economy. A growing number of companies and large corporations have recognized the advantages of the trend.

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What is the Shared Economy?

The sharing economy is a system where consumers are involved in the various steps of goods and services. These steps consist of creating, producing, distributing, and of course, consuming. Even not-for-profit organisations use this system, public lending libraries are an example of this. Furthermore, these processes are obviously based on trust and requires those involved to overcome being concerned about people they don’t know. The phrase itself started to be used around the time of the Great Recession.

The Growth of Shared Economy

Technology is growing by leaps and bounds. Whether Apple, Samsung or Sony – smartphones are already considered to be necessary by many. Therefore, the trend of the shared economy is moving towards the mobile internet. Companies are also profiting from this sharing boom. Employees of large companies can communicate via virtual offices resulting in not having to find a space to rent. Additionally, time is money and an online meeting is faster and more cost-effective than arranging an in-person meeting between the respective employees.

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Variations and Similar Concepts

As with many new terms, there can be some confusion over what it actually refers to. Also, many people do not yet know what the shared economy is even though they may have even participated in it! Some think that it literally means to share and get nothing in return. Additionally, others think it is the same as peer-to-peer processes and it has even been known as a strictly business to customer system. Other terms used for this economy are collaborative, peer based, community based etc.

Previously, researchers have said that the term is an oxymoron, calling for it to be renamed as something similar to a mutual or collabatorive economy. Of course, this concept overlaps and shares many similarities with other systems. These include prosumerism, peer production, and the gig economy. Whilst many argue that the shared economy only benefits for profit companies, it isn’t entirely true. Understandably, organizations that do not seek profit such as local governments and charities also use this system to benefit the population.

Commercial Evolution

Of course, there is a large and growing commercial side to the shared economy. Some see this as a marketing ploy but others are happy to take part in such advancements either as owners, consumers, or participants. Originally, Air BnB started off as a genuine shared economic model. It was designed so people could share a room in their home for monetary gain along with a fee going to the company. As many know, the company has grown well past this and some are now concerned how much the business has changed. These days, full properties are frequently listed along with several being owned and managed by property management corporations.

The Shared Economy in Action

The processes and systems can be seen in many aspects of business and personal life. Here are some examples:

  • Finance
  • Crowdfunding and peer to peer lending. Eg: GoFundMe, Zopa.
  • Real Estate
  • Providing property short term, renting out a room or sofa. Eg: Air BnB, CouchSurfing.
  • Food
  • Eating at a friend’s home, food bank, community allotments.
  • Labour
  • Crowdworking platforms, open innovation and open source development. Eg: Wikipedia, clickworker, Upwork.
  • Transport
  • Ride sharing, car pooling, bicycle sharing. Eg: Uber, Lyft, government run public bike sharing.
  • Technology
  • Open source software, computer repair, volunteering. Eg: SETI@Home, free repair workshops, GNU.

    Negative Effects of the Shared Economy

    Unfortunately, as with most changes to an economy, there will always be some negative aspects. Those looking for work may have thought that being a ride sharing driver was a great idea. They make many trips and earn extra income which is beneficial. However, this comes at a cost. The worker’s car will require much more frequent care and attention due to higher usage. Also, they may find they have to work unusual or unsociable hours to be able to meet their targets.

    As previously mentioned, Air BnB and similar services have outgrown their original model. Instead of people renting out their spare room, they are now buying up houses to list on such sites. Understandably, some local communities are becoming frustrated about the number of short term rental properties in their area. Sadly, this can cause an increase in anti-social behaviour and leave local young adults struggling to buy a home.

    Exchanging, Improving and Benefits

    Problem solving with crowdsourcing has enormous potential. Many people can share things that would not usually be consumed via shareconomy platforms. Additionally, these products and services can be evaluated and analyzed. For example, game developers could market their products via shareconomy platforms and improve them through crowdsourcing.

    Freelance work platforms provide the opportunity for people to earn extra money from their own home. Therefore, these workers not only share their time and skills but they make money doing it. Also, businesses benefit from this way of working as it can save them time, money, and resources. Due to not having to commit to a specific schedule workers can take time out when they need it. This might be for personal, social, or medical reasons.