The sharing economy is a concept that has become widespread in recent years, mainly thanks to digital platforms and offerings. However, it was not unknown even before that.
According to the definition, the sharing economy is about the provision and temporary use of resources that do not have to be purchased for an individual user. This can relate to goods, but also to knowledge or information.
What is the economy of sharing about?
For the sharing economy to work, there must of course be someone who makes the shared assets or goods available. The form in which this takes place can be realized in a wide range of ways. 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 with the help of any participants via platforms such as Uber. Depending on the model, the operating, maintenance and repair costs are also allocated. The idea is not to buy and therefore fully own what you only need occasionally. This not only saves money, but also time and, to a certain extent, responsibility, again in relation to example shares such as cars, because the occasional user does not have to worry about taxes, insurance, car washing and repairs.
Popularity thanks to Internet connection
Shared goods are not a new idea - even in the Middle Ages, people knew about common land that was used by all villagers. The idea of buying just one expensive tool together also existed before the advent of the World Wide Web. However, the Internet makes it much easier to implement the sharing economy, because by registering on an online platform, the interested user has effortless access to variable offers where anything of interest can be shared, swapped or given away. And that can be anything. Thanks to the rating options, both providers and users have a tool that can be used to separate the wheat from the chaff - reputable offers and trustworthy borrowers can be identified beyond doubt.
These are the levels of the sharing economy
Who sharing offers are aimed at depends on the business model, especially in the case of platforms that offer their services online. The following are conceivable:
- 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 payment from the participants. These include 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 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, there are two sides to the sharing economy. 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 high overall savings when borrowing and renting or buying used goods.
- Greater sustainability, better use of resources, lower environmental impact through sharing or multiple use and extending the life of goods.
- Additional income via platform economies for providers and sellers, even without complicated training or further education.
- Insights into user behavior and simplified collection of user data make targeted marketing easier for companies.
Some of the disadvantages are already obvious. The aforementioned ease of data collection naturally also encourages the disclosure of some 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 also regulated differently and in some cases requires users to provide their own information or refer to the available online reviews. Sharing platforms, where the commercialization of certain services creates precarious working conditions for employees - with non-transparent wages, inadequate insurance and no trade union protection - are particularly criticized.
Sharing economies are shaping the economic landscape - but they need to be managed
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 go hand in hand with more savings and increased sustainability, but there should be some regulation from the legislator to ensure working conditions, liability and quality. Another criticism of sharing, which is mostly regulated digitally, is that access to the internet is required in order 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 would particularly benefit from the sharing economy in some areas of life.
