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.
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-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.
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.
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.
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What Is the Sharing Economy (and How Is it Changing Industries)?
- DecentralizationProcess of redistributing or dispersing functions, powers, people or things away from a central location or authority
- EconomicsThis is a social science that studies the problem of choosing in conditions of limited resources to maximize the satisfaction of people's needs.
- Blockchain and cryptocurrencyTopics related to blockchain and cryptocurrency.
- Future of workA term most often describing the evolution of employment and income-earning activities.
- Creator economyThe creator economy describes the concept of individuals creating an income and creating a job out of creating content, often on social media platforms.
- Gig economyGig-based work; income-earning activities outside of traditional, long-term employer-employee relationships (freelance work)