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Sharing Economy: Economy for the Future?

Jasmina Gloor 19 Sep 2022 0 comments

According to the definition, the sharing economy is about the provision and temporary use of resources, which therefore do not have to be purchased for an individual user. This can refer to goods, but also to knowledge or information.

Two women sharing

What is the economy of sharing all about?

In order for the sharing economy to work, there must of course be someone who makes the shared assets or goods available. In what form this takes can be realized in a wide range of implementation options. Car sharing, for example, which is popular with urban users, can become a reality through the part-time use of vehicles from a commercial or municipal provider - but also, via platforms such as Uber, with the help of any participants. Depending on the model, operating, maintenance and repair costs are also apportioned. The point is not to buy and thus fully own what you only need occasionally. This not only saves money, but also time and, to a certain extent, responsibility, again referring to example shares such as automobiles, because the occasional user does not have to worry about taxes, insurance, car washing and repairs.

Bike Sharing

Popularity thanks to Internet connection

Shared goods are not a new idea - even in the Middle Ages, common land was known to be used by all the villagers. The idea of purchasing only one expensive tool together also existed before the advent of the World Wide Web. However, the Internet makes the sharing economy much easier to implement, because by registering on an online platform, the interested user has effortless access to variable offers where what is of interest is shared, exchanged or given away. And that can be anything. Thanks to the rating options, both providers and users have a set of tools that can be used to separate the wheat from the chaff - serious offers and trustworthy borrowers can thus be identified without a doubt.

Two people on cell phone

These are the levels of the sharing economy

Who sharing services are aimed at depends on the business model, especially for platforms that offer their services online. Conceivable are:

  • P2P - in this case, participants find each other via the app or platform provided and use a technology that enables the exchange, possibly in return for compensation from the participants. This includes platforms such as Uber, Vinted or AirBnB.
  • B2C - gives companies the opportunity to enable customers to participate in their services or products. A common example is the offer of software-as-a-service.
  • B2B - these are concepts that allow companies to lend services, machinery or production concepts to each other.

All of these concepts have been around for some time, but the use of the Internet has greatly improved their reach and ease of use.


Advantages and disadvantages of joint use

As with all innovations, there are two sides to the sharing economy coin. The advantages for users, but also for companies, are manifold. They include:

  • Uncomplicated, simple handling of platforms and selection of the desired goods or services.
  • Favorable conditions compared to commercial and new goods offers, as well as overall high savings when borrowing and renting, or even buying used goods.
  • Increased sustainability, better use of resources, reduced environmental impact through shared or multiple use, and extended life of goods.
  • Additional income via platform economies for providers and sellers even without complicated training or continuing education.
  • Insights into user behavior and simplified collection of user data for companies facilitate targeted marketing.

The disadvantages are already partly obvious. The aforementioned ease of data collection naturally also promotes the disclosure of part of one's privacy, especially via electronic platforms. This goes far beyond personal data and extends to the creation of detailed preference profiles and movement data. Depending on the platform, liability for the goods, services or information obtained is also regulated differently and in some cases requires self-information or reference to the available online ratings. Particular criticism is directed at sharing platforms where the commercialization of certain services creates precarious working conditions for employees - at non-transparent wages, inadequate insurance and no union protection whatsoever.

Sharing icon

Sharing Economies Shape the Economic Landscape - But They Need Governance

Car sharing or the uncomplicated rental of unneeded living space, as well as the sale of used clothing or the lending of books are just some of the facets of the sharing economy. The sharing economy is being used more and more in everyday life by private individuals and companies thanks to the simple organization via platforms. This can come with more savings and increased sustainability, but some regulation by lawmakers should be in place to ensure labor relations, liability and quality. Furthermore, part of the critique of sharing, which is mostly digitally regulated, is that it requires access to the Internet to fully participate. People or groups who are excluded because of their education or income are thus affected by digital and, in this case, economic inequality, even though they would particularly benefit from the sharing economy in some areas of life.

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