Online platforms enable individuals to share assets and services on demand, such as Uber. Such companies often bypass traditional business regulations while creating new opportunities for consumers.
Sharing economies offer numerous advantages, from reducing waste and providing access to products and services otherwise unavailable, to increasing productivity.
Benefits
More and more people are discovering they can make extra income through the sharing economy. People with underutilized assets such as cars, bicycles, spare rooms or carpentry skills that go unused can rent them out via digital platforms to local people in need of such items; similarly personal services providers can generate additional income by offering their expertise via TaskRabbit or Uber platforms.
Sharing economies provide many economic and ecological advantages. They reduce wasteful production, give idle assets new meaning, and promote sustainable consumption compared to traditional market-based exchanges.
The sharing economy has also played a significant role in economic development in developing countries like Kenya. Hellotractor provides modern farm machinery while Flare provides faster emergency response times. Furthermore, secondhand sites such as eBay and Depop make many pre-owned items more readily accessible – saving consumers money and helping reduce clothing waste that would otherwise be discarded.
Costs
Sharing economies are driven by three primary forces; consumer behavior change, availability of electronic market platforms and social networking. Furthermore, sharing economies have the power to provide growth opportunities in developing nations; for instance Hellotractor allows African farmers to rent modern farming equipment that helps increase productivity.
Sharing economies have also been criticized for skirting regulations necessary to operating legally, such as car-sharing companies not paying the required licensing or regulatory fees to operate legally – potentially blocking other drivers from joining their markets.
Collaborative consumption takes many forms, from food co-ops and car sharing programs, to babysitting services, task sourcing sites, crowdfunding platforms and toy lending libraries. Such systems may also be known as mutualization systems; however, some experts consider them more accurately described as on-demand economies or gig economies.
Safety
The sharing economy is an emerging industry, driven by new technologies and platforms connecting consumers and providers. Its growth has been spurred by these platforms’ ability to connect consumers with providers at lower costs with greater variety. But its business model does pose some unique challenges, including platform-mediated models’ tendency towards market concentration as well as high up-front sunk costs involved with developing these technologies, making it harder for new entrants to compete effectively with these already-established competitors.
People can utilize online platforms to rent out their cars, bicycles and other assets for money or save resources by sharing these assets with others through sharing portals – be they something as small as an extra bike or as extensive as a vacation home. They may even sell used items they no longer require on these websites to generate an additional source of revenue.
Sharing is an efficient and cost-cutting way of finding an economical car, hotel room or office space rental solution.
Environment
Collaborative consumption is an ever-evolving trend that can have multiple positive environmental outcomes. It can reduce carbon emissions by cutting energy waste, conserving natural resources, and shortening product idle times; promote recycling efforts, increase community involvement and participation rates and offer new economic opportunities by sharing skills, services and products among people.
Though sharing economy offers several benefits to society and the environment, it may have some adverse side-effects as well. Income inequality increases for the bottom 80 percent of population while certain large companies may gain market dominance through sharing economy models.
Additionally, lack of regulation allows sharing economy companies to charge lower prices than traditional industries for products and services offered to consumers – creating risks for both customers and employees as well as contributing to traditional jobs’ demise and leading to shortages of skilled labor.
