Sharing Economy

Sharing is something that has been around since the beginning of man. Communities and families sharing items from food to tools. We’ve all borrowed something from a neighbour – a cake tin, a lawn mower. The Internet has enabled sharing to be taken to the next level and turned it into a thriving economy.
The sharing economy, also referred to as ‘collaborative consumption’, has created new methods for consumers to avail themselves of goods and services (Shor & Fitzmaurice, 2015). Previously, sharing occurred within families or small communities. What makes this new economy different is that transactions occur between strangers utilising a peer-to-peer method. These transactions allow goods and services to be shared between owners or producers and consumers, negating the need for a middleman. Shor and Fitzmaurice explain that this can enable the redistribution of wealth “across the value chain” (2015, p. 410).
Young adults are the driving force behind the sharing economy. This is partly attributed to their interest in technology which allows them to access goods and services anywhere, at any time, with minimal fuss. This demographic doesn’t see material ownership as a necessity and are more likely to rent or loan goods and services (Shor & Fitzmaurice, 2015).

In a world where material possessions, such as car ownership, can be expensive, short-term rentals have proven to be popular. Car sharing company Zipcar is a business-to-peer model that allows consumers to rent a self-drive vehicle for a short time. Uber uses a peer-to-peer model, with vehicles owned & driven by individuals and hired ad-hoc by consumers, in a similar fashion to taxis. Similarly, the accommodation sector has joined the sharing economy with the likes of Couchsurfing, where homeowners offer a night on the couch to a stranger; and AirBnB where travellers can rent a room or an entire apartment owned by a stranger (Shor & Fitzmaurice, 2015).

Belk explains

“There are two commonalities in these sharing and collaborative consumption practices:
1) their use of temporary access non-ownership models of utilizing consumer goods and services and
2) their reliance on the Internet, and especially Web 2.0, to bring this about.” (2014, p. 1595).
All of these models rely on the Internet to connect owners or providers of goods and services and consumers. With that comes the issue of trust. In days gone by, trust was no issue as sharing occurred between people who knew each other. To minimise the level of risk, sharing services use a rating or review system where providers and consumers are asked to leave details on completion of their transaction. This enables future users to select a service that suits them best (Shor & Fitzmaurice, 2015).

Belk, R. (2014). You are what you can access: Sharing and collaborative consumption online. Journal of Business Research, 67(8), 1595–1600. http://doi.org/10.1016/j.jbusres.2013.10.001
Shor, J. B., & Fitzmaurice, C. J. (2015). Collaborating and connecting: the emergence of the sharing economy. In L. A. Reisch & J. Thøgersen (Eds.), Handbook of Research on Sustainable Consumption (pp. 410–425). Edward Elgar Publishing.

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