Sharing Economy

Throughout the past ten years, many companies have developed a business model surrounding the use of a sharing economy. According to Wikipedia, the sharing economy "is a mode of consumption whereby goods and services are not owned by a single user, but rather only temporarily accessed by members of a network and underutilized assets are shared, either for free or for a fee."  Companies like Yelp, Air BnB, and Lyft have created an entire business model that runs solely from their users and has little interaction with actual employees from the business itself.  

Heres a quick video that explains how millennials are adopting the sharing economy at a much faster rate than generations:

The main thing that separates normal businesses from ones that depend on a sharing economy is that the interactions are more focused on peer to peer, rather than business to consumer. When this model was first adapted by businesses it was very different, because rather than trusting a business you are trusting someone that has no relation to the business itself. This creates a sense of trust in the sharing economy that users must trust each other that they'll get to their destination safe, the house they are staying at actually exists, or the users review is accurate and not misleading.

Advantages:
There are many advantages that come along with the use of a sharing economy, which benefit both the person using and consuming. People now have the opportunity to be their boss and create a work schedule that works best for them giving them flexibility that could not be offered at a normal job. Also, within a sharing economy prices are often cheaper than they would be when using a regular business model. People can now negotiate on their prices when using Air Bnb, and not have to deal with the middle man booking agent that can boost up the prices.

Disadvantages:
While there are many advantages to the sharing economy, there are also disadvantages that come along with it. One being the fact that consumers must put all their trust in the person that they are connecting with. For example, Taxis must be licensed by the state and undergo a fair amount of testing before they are able to drive compared to a Lyft driver that can sign up and start driving people the next day. The overall lack of control that businesses have over their employees or users is one thing that may draw consumers away from using services that are focused around a sharing economy.

Overall, I believe that a sharing economy creates a more efficient and effective means of communicating with consumers and providing services to them. By allowing them to reduce the need for a middle man and directly connect with the person providing the service, services are often cheaper and can be done much faster than normal.

Questions:

1. Why do you believe millennials are adopting the sharing economy at a much faster rate as compared to generations before it?

2. Do you believe that a sharing economy is a sustainable business model?   Why or why not?

3. How have you interacted or benefited from the use of a sharing economy? Or have you have a bad experience that you would like to share?

Sources:

• Sharing Economy Breakdown
• Pioneers of the Sharing Economy
• Pros and Cons of Sharing Economy