The Sharing Economy: will this be the future?


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Over the past years, the attitude towards consumption have shift and brought a increasing concern over sustainability. Despite of the succes of some sustainable initiatives, the overall trend follows the unsustainable path. That is why new approaches are needed. How can we solve this problem? What can firms do?

The development of information technologies and the growth of web 2.0 has enabled the development of online platforms. This online platforms promote user generated content, sharing and collaboration (Kaplan & Haenlein, 2010). Examples are open source software, collaborative online encyclopedias (e.g. Wikipedia) and sites like YouTube and Instagram. All together we can call this the sharing economy. The sharing economy thus emerges from a number of technological developments that have simplified sharing of both physical and non-physical goods and services through the availability of various information systems on the Internet (Hamari, et al., 2015). According to Heinrichs (2013), this collaborative lifestyle will disrupt mainstream economies and consumerism, improve social cohesion, and contribute to the minimization of resource use.

Now a day, the world choose Uber over car ownership, Spotify over music ownership and Netflix over the movie ownership. This brought Michael Cassua (2015), founder of the startup ByeBuy, on an idea:”Ownership as a concept is becoming obsolete and it is really not necessary at all to own any of these items to enjoy cool gadgets. We are here to eliminate ownership of product goods and introduce a pay-as-you-go system instead.” This means that you can have unlimited acces to the newest technology like the new iPhone 6S or a Playstation game at lower costs (95% less than if you bought the item). You just have to pay a subscription fee. The consequence is, that you are not constantly engaged in buying and selling. You download the ByeBuy app, suppliers will give you stuff and afterwards you can give it back. So ByeBuy is an intermediary company in a sharing economy.

Overall, I think the sharing economic will benefit our world. This lifestyle will disrupt mainstream economies and consumerism, improve social cohesion, and contribute to the minimization of resource use. ByeBuy is a good example of an intermediary company in the electronic market that can disrupt industry structures.

Reference
Hamari, J., Sjöklint, M., & Ukkonen, A. (2015). The sharing economy: Why people participate in collaborative consumption. Journal of the Association for Information Science and Technology

Heinrichs, H. (2013) Sharing Economy: A Potential New Pathway to Sustainability, Leuphana University Lüneburg, Faculty of Sustainability

Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons, 53, 1, 59-68.

Wired (2015) ‘Startup of the week: ByeBuy’ http://www.wired.co.uk/news/archive/2015-06/05/startup-of-the-week-byebuy, 14 September 2015

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7 responses to “The Sharing Economy: will this be the future?”

  1. romylynndevries says :

    The part of online content sharing is interesting, but does not feel that new anymore. The byebuy concept sounds very inovative. My only comment would be; how can it be at lower cost. People want to make money if they have others use their stuff. Like renting a car, it is cheaper for one day, but after a year or so you could have bought a car easily. I’m not familiar with byebuy but this feels the same, I cannot see how it can be cheaper and still is beneficial for the one that is lending out his stuff.

  2. 342947db says :

    Same as romylynndevries, I agree that the online content sharing is interesting. In addition, I also believe that sharing could work really well when it comes to physical products that you use only once in a while like tools, books, suitcases, trailer wagons etc. (this actually already happens on websites like ‘spullendelen.nl’ and ‘peerby.com’).

    However, I don’t believe in the ‘elimination of ownership’ when it concerns products you use very often or on a daily basis like the example of an iPhone. I cannot imagine that you could use your smartphone on a daily basis, 95% cheaper than when you would have bought it yourself. Plus, when are you going to return you iPhone then? Once it’s out-dated or broken?

    In addition, the same would – in my opinion – apply for very personalised products. Most people simply want to own these themselves.

    342947db

    • 346450ms says :

      I believe the sharing economy is a very interesting subject as well. What really benefits this fast-growing economy is trust. However, this is also one of the biggest concerns of the sharing economy. In this peer-to-peer marketplace, customers demand the verification of user identities, which in turn increases trust. This is why Airbnb added an identity verification system to its platform. In order for the sharing economy to grow, other businesses need to find ways to authenticate their users as well, which is not as straightforward as in the business-to-consumer model. Personally, I am somewhat skeptical towards the sharing economy, also due to ‘trust’. I think there is a huge potential for growth within this industry, if these trust issues are solved. Word-of-mouth is an important concept addressing this issue, since reviews on websites such as Airbnb are extremely valuable. A proprietor who received multiple honest and positive reviews will rent his/her property more often; this is due to trust, reliability and credibility. However, I am wondering how proprietors without reviews (or with negative reviews) will survive within this sharing economy? And the same question applies for well-established companies, how will these companies survive when there is a shifting demand towards ‘lower-priced’, ‘no-ownership’ products and services? And how about the future of skilled workers if everyone acquires services from less-skilled service providers? Although this new sharing economy has certainly disrupted the traditional economy, I am curious to what the future will give.

      Sources:

      http://www.forbes.com/sites/theyec/2015/02/10/the-future-of-the-sharing-economy-depends-on-trust/

      http://www.fadv.com/company/press/press-release/articletype/articleview/articleid/191/in-the-sharing-economy-trust-is-a-must.aspx

  3. maxhilt says :

    I think you need to take the sharing a step further and call it networking. I personally believe we are moving into a network economy, where’re IT plays the fundamental enabling role of connecting people and companies. For example you mention Netflix. A IT-enabled platform that allows people to view movies on demand against a fixed subscription to the platform. What Netflix does is profiling each user more and more by every piece of extra information he gives about himself. For netflix specifically this is genre, actors etc. By using this information, Netflix can then give suggestions for movies suited for the person. On the other side of the network is the movie publishing companies who are better of when their target audience gets a quick connection to their content.

    For both parties value is driven because Netflix is able to utilise its IT-enabled network and the information on its network.

    I see this occurring in multiple industries and I have actually made a blog post about it today if you are interested in this type of thinking. The networking strategies really revolve around sharing the value in the network. As a consequence a future development can be that companies embedded in a network start competing network vs. network. You can already see this happening in the airline industry.

    The idea of sharing value will be necessary as companies and people have realized that they cannot be good at everything. A recent trend was to focus on core capabilities and outsourcing the rest. A network strategy would allow companies to focus on core capabilities and gain other capabilities from the companies in their network; thus a smaller scaled, hence clustered, sharing economy. This does of course bring in new issues, such as described by dependency theory, agency theory and organizational learning theory. I still believe these developments will continue to evolve, what might become a truly sharing economy on a large scale.

  4. 344571ms says :

    I find this blog very interesting. I have read a lot of the sharing economy and I think this phenomena is getting even bigger. However, I agree to some extent to the comments here that you cannot ‘share’ the product you use on a daily basis. That is simply not possible.
    However, take cars for example, especially in large cities like Amsterdam or New York less people are actually the owner of a car. This can have several reasons, but the largest reason is that it is simply inconvenient to own one, especially if you do not use it very often. Besides that, public transportation is well organized and mostly these people do not often leave the city or area that they work or live in. If, however, they do decide to leave they can make use of this sharing economy and actually borrow (or rent) a car for a day or two from other car owner. This will eventually lead to an increase in the sharing economy.

    When it comes to trust, just have a look at AirBnB. The platform will make sure that the trust aspect is not an issue.

    Sources:

    http://www.forbes.com/pictures/eeji45emgkh/airbnb-snapgoods-and-12-more-pioneers-of-the-share-economy/

    http://www.theatlantic.com/business/archive/2014/01/why-do-the-smartest-cities-have-the-smallest-share-of-cars/283234/

  5. stephanieflorence says :

    Thank you for introducing the topic of sharing economy! The sharing economy is indeed a very interesting topic. I do not agree with the notion of it not being ‘new’; in my opinion, there are many more opportunities to explore within the sharing economy. Forget about sharing cars, sharing tools, sharing apartments; the future holds the sharing of knowledge. Coursera and Udacity already offer online courses from top universities, and on Youtube many examples of ‘knowledge sharing’ are offered (e.g. how to fix my bike), but maybe we can bring this even one step further. What if employers could offer online full ‘traineeships’ for potential employees all over the world, them sharing knowledge with future employees and vice versa, and them eventually picking the users who perform best? A new sort of hiring process?

    This would revolutionize the currently old-fashioned model of traditional hiring processes, based on CVs, motivation letters or tests. How great would it be if you could monitor future employees on how they would perform on actual aspects of the job, whilst at the same time checking how they learn? What if the future employees could share their tasks with other potential employees, creating teams that might outperform other teams? The massive pile of data created also generated some amazing content for understanding how people learn and work. And at the same time, employers could benefit from the input and knowledge of all potential employees working individually or within teams on different problems.

    Therefore; please do not view the sharing economy as ‘just another marketplace’, but view it as a revolutionary force that can alter the way how we absorb and share knowledge.

  6. 371908jg says :

    Thank you all for the reaction, this site https://www.linkedin.com/pulse/report-new-rules-collaborative-economy-2015-data-rise-jeremiah-owyang?trk=hp-feed-article-title-channel-add can give you more information about the growth of the sharing economy if you are interested!

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