According to the definition, the sharing economy is about the provision and temporary use of resources that do not have to be purchased for a single user. This can refer to goods, but also to knowledge or information.
What is the sharing economy all about?
For the sharing economy to function, there must of course be someone who makes the shared values or goods available. How this happens depends on a wide range of implementation options. Car sharing, which is popular with urban users, for example, can be achieved through the part-time use of vehicles from a commercial or municipal provider – but via platforms like Uber it can also be done with the help of any participants. Depending on the model, the operating, maintenance, and repair costs are also allocated. The idea is not to buy and thus fully own something that you only need occasionally. This not only saves money, but also time and, to a certain extent, responsibility – again with example shares such as automobiles – because the occasional user does not have to worry about taxes, insurance, car washes, and repairs.
Popularity thanks to internet connection
Shared goods are not a new idea – communal land, used by all villagers, was already known in the Middle Ages. The idea of jointly purchasing a single, expensive tool also existed before the advent of the World Wide Web. However, the internet makes implementing the sharing economy much easier. By registering on an online platform, interested users have effortless access to a variety of offers where they can share, exchange, or give away whatever they are interested in. And that can be anything. Thanks to the rating options, both providers and users have a tool that can separate the wheat from the chaff – reputable offers and trustworthy lenders can thus be identified without a doubt.
These levels of the sharing economy exist
Whom sharing offers are aimed at depends on the business model, especially for platforms that offer their services online. Possible target groups include:
- P2P – in this case, participants find each other via a provided app or platform and use technology that enables the exchange, possibly in exchange for compensation. 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 offering of software-as-a-service.
- B2B – these are concepts that enable 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 significantly improved their reach and ease of use.
Advantages and disadvantages of shared use
As with all innovations, the sharing economy has two sides to the coin . The benefits for users and companies are diverse. These include:
- Uncomplicated, easy 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.
- Greater sustainability, better use of resources, lower environmental impact through shared or multiple use and extending the lifespan of goods.
- Additional income through platform economies for providers and sellers without complicated training or further education.
- Insights into user behavior and simplified collection of user data for companies facilitate targeted marketing.
Some of the disadvantages are already obvious. The aforementioned ease of data collection naturally also encourages the surrender of a portion of 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 purchased is regulated differently and sometimes requires self-information or reference to available online reviews. Sharing platforms, where the commercialization of certain services creates precarious working conditions for employees, are particularly criticized – with opaque wages, inadequate insurance, and no union protection.
Sharing economies shape the economic landscape – but they require control
Car sharing or the uncomplicated rental of unused 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 ease of organization via platforms. This can lead to greater savings and increased sustainability, but a certain level of regulation by lawmakers should be in place to safeguard employment relationships, liability, and quality . Another criticism of sharing, which is mostly regulated digitally, is that access to the internet is necessary to achieve full participation. People or groups who are excluded due to their education or income are therefore affected by digital and, in this case, economic inequality, even though they are the ones who would particularly benefit from the sharing economy in some areas of life.
