Warning: This article contains plenty of jargons, lingos and neologism (Yes, it started already).
One of the most controversial buzzword in the 21st century is the Sharing Economy. It is no doubt due to the rise of technological startups that have achieved unicorn-status in a lightning-speed fashion that have sparked the debate on its definition.
Here are a few notable internet giant to fuel the squabble on the sharing economy.
Uber – (The omnipresent) Peer-to-peer ridesharing mobile app
AirBnb – A peer-to-peer online marketplace for booking of lodging
Alibaba – China’s E-commerce giant
Gumtree – Online classified for sales of used items within community groups
TaskRabbit – Online portal to match freelance labour to local demand
Couchsurfing.com – Networking service for free lodging
Indiegogo – Fundraising site for ideas, charity or start-up business
The Freecycle Network – A nonprofit organization that recycle reusable goods
Uber even dominated the sharing economy terminology by coming up with their own jargon – Uberisation. Uberisation is a verb used to describe the use of platforms, not limited to technology, for peer-to-peer service providers to increase transaction efficiencies.
Are you even more confused now on the term sharing economy? How do we deem an organization is tagging onto the sharing economy trend then? There are hardly any obvious similarities in the above businesses, right?
At the onset, the sharing economy refers to the sharing of access to goods and services on a peer-to-peer (P2P) basis. This process is facilitated through a common platform, usually through the Internet, where lenders and users of the goods and/or services gets matched. The predominant aim is to better utilize underused assets rather than financial gains.
Then the term got diluted when commercialization is added into the mix. Sales transactions done through online mediums that are primarily profit-driven are too deemed as part of the sharing economy. This even includes business-to-business (B2B) related transactions rather than purely peer-to-peer ones.
That is inflection point when the commentator “war” starts over the sharing economy.
The sharing economy now is an all encompassing term that different businesses shares (pun intended). To categorise the (ever increasing) platforms, we’ve got the following:
- Peer-to-peer lending platforms – Lend and borrow money without going through banks
- Crowding funding platforms – Raising funds through the public
- Co-working platforms – Shared working space
- Merchandise platforms – Individuals can sell or rent their physical goods
- Freelancing platforms – Individuals can offer their services
And this list will continue and poise to pervade into every industry such as healthcare, farming, etc., in time to come. Even simple commodities such as powerbanks and umbrellas (E-umbrella) sharing have became multi-million dollar businesses. I’m not surprised that the sharing economy is forecasted to blossom into a US$355 billion industry by 2025 from a “mere” US$14 billion in 2014.
Looking through the differing lenses
Let’s backtrack to the debate.
For voters that polled in the “Sharing-Economy-is-a-staple-metaphor-for-business” box, it really boils down to collaborative consumption. As opposed to standard commercial consumption where individuals borne the whole cost of consuming a service or goods, collaborative consumption is redistributing the cost by exchanging and renting it to others. Individuals can therefore afford a particular asset more easily as compared to the traditional route. A group of people can also therefore have access to that asset without having the need to own it. Individuals can simultaneously play both the role of “provider” and “obtainer” of resources.
Think carpooling and home renting, you will essentially get Uber and AirBnb.
On the other side of the fence, we have got those that standby using the term sharing economy sparingly and selectively. They insist that “transactions” should not be profit driven where businesses can be sprouted as a result. Individuals in the sharing economy should share mutual benefits rather than skewing towards profiting off one another.
Think knowledge sharing and homestaying, you will essentially get Khan academy and Couchsurfing.com.
As a whole we strongly believe that the sharing economy is a great step that humanity have adopted, or readopted (first documented in 1978). Although, there are concerns over issues such as legalities on businesses adhering to regulations, safety of users, unfair competition, etc. Democratizing the marketplace to empower individuals to share and render goods and services is a great way to increase global productivity and reduce wastage.
According to Rachel Botsmen, author of “What’s Mine Is Yours: The Rise of Collaborative Consumption”, the sharing economy reinvents not just what we consume, but how we consume. By traditional sharing, bartering, gifting, lending, renting and swapping through technology and peer communities, value is created.
Seems like we see eye to eye in this debate.