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Sharing economy

Sharing economy

Sharing economy refers to economic and social systems (which are typically internet-based) that enable shared access to goods, services, data, and talent.

Overview

The sharing economy is a community-centric economic and social model that involves shared access to goods, services, data, and services facilitated through online and often peer-to-peer (P2P) exchanges. Sharing economies enable individuals and groups to monetize their idle and underused assets in a way that wasn't possible before. Previously, people may have discovered and shared assets through classified ads, but the internet, pervasive computing, and increased ease of mobile payments have enabled the development of platforms that have made the discovery and sharing of assets easier.

For example, Airbnb is a part of the sharing economy that allows real estate owners to rent out their unused apartments or empty rooms to other community members in a way that benefits both parties. Owners can make money, while renters have more choices for accommodations and can get a more traditional "local" experience when traveling.

Concepts of the sharing economy

The meaning and concepts of the sharing economy tend to be ambiguous and have generated debate about what transactions can fall under the sharing economy concept; some have argued that the term is misleading. However, some have worked to identify defining characteristics of the sharing economy, including consumer-to-consumer interaction and temporary access and physical goods. Thus, hitchhiking and carpooling can fall under the sharing economy while a trip from a ridesharing program, such as Lyft or Uber, would not because those occur due to a consumer's order, and they can be considered to exist only to fulfill that transaction. Similarly, a person buying a second home to rent it out permanently does not constitute a sharing economy, while a platform like eBay is part of a second-hand economy.

As well, the modern concept of the sharing economy is computer-mediated, based on social media platforms, and according to some, inspired by the open-source software movement. Based on this, some consider the sharing economy as an umbrella term that can include file sharing, open-source software, crowdfunding, peer-to-peer lending, bitcoin, and other forms of blockchain.

Blockchain and the sharing economy

Blockchain-based platforms have also emerged for exchanging various goods and services in the sharing economy. For example, Golem allows users to exchange idle computing power with other users who need to do substantial computation and don't have access to enough computing power. The difference between blockchain solutions and the earlier sharing economy businesses, such as Airbnb, is that blockchain solutions do not involve trusted third parties—they are decentralized. This provides some practical advantages as well as disadvantages.

Advantages of blockchain solutions include lower cost, greater transparency, permissionless participation, and platform security. Trusted third parties—also called middlemen—cost more, don't necessarily operate transparently, can exclude people from participating on their platforms, and are generally more vulnerable to hacks.

However, trusted third parties have the advantage of providing arbitration in the case of disputes between users. They can reverse transactions, manage reputation systems, and otherwise maintain stability within their community. All of those features are more complex to implement in decentralized systems.

Sharing versus creator versus gig economy
Sharing vs. gig economy

As the sharing economy is part of the theme of emerging economies, such as the gig economy or the creator economy, these are often considered similar or the same. However, the gig economy tends to include applications and platforms, similar to the sharing economy, on which users can create economic opportunities from their spare time. This is the umbrella under which Uber would exist—even though the driver is "sharing" their vehicle, the way the service is offered is as "gig" work in which the person "sharing" their vehicle is also sharing their time and driver expertise. Ridesharing services are similar to taxi services but allow independent contractors and freelancers to work flexibly around their hours. A sharing economy version of this would see a person lend out their vehicle but not drive it, similar to an Airbnb for vehicles.

Sharing vs creator economy

While the creator economy relies on similar enabling technologies of the gig and sharing economies, it remains separate. The distinguishing measure tends to be clearer between these two economies (when compared to gig vs sharing) as it tends to focus on the outcome. In a sharing economy, an individual monetizes underused assets or skills; in a creator economy, a focus is on developing content intended to entertain or build a business. That said, out of the creator economy has sprung a sharing economy that tends to be more exclusive and tends to focus on sharing high-end video and audio gear, which some creators will lend out to others to use for various purposes, such as making videos. Or else sharing gear, equipment, or products to allow several different creators to develop reviews from them. Otherwise, these remain distinct economies but are considered part of the future of work.

Timeline

Further Resources

Title
Author
Link
Type
Date

From Airbnb to city bikes, the 'sharing economy' has been bought up by big money | Evgeny Morozov

Evgeny Morozov

Web

Future of Blockchain | Chelsea Rustrum | TEDxBoulder

July 16, 2018

What Is the Sharing Economy (and How Is it Changing Industries)?

Derek Miller

Web

References

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