Co-operation, lending, borrowing, co-creating, exchanging- all these terms lead us back to a common term ‘sharing’. Scottish economist Adam Smith stated several years ago that humans have unlimited wants, limited resources and alternative uses of those resources indicating towards the perpetual problem of scarcity. Sharing Economy, a socio-economic system wherein assets and services are shared through peer-to-peer models amongst individuals, seems to have stemmed out of this very problem, forming links between need and availability. But while it all sounds like a fresh idea leading us towards social change, has the sharing economy hit the right spot or has it lost its essence by focusing only on making lives easier by taking advantage of rapid technological advancements.
While researching about the topic I came across two TEDx talks by Benita Matofsca and Ed Ericson Jr; both presenting contrasting views on what the Sharing Economy stood for. I will try to highlight both through this article. The evolution in traditional business practices came around 1995 when eBay was launched and a space for mutually beneficial exchange was opened. Continuing that phase rapid technological advancements facilitated movement of goods and services. From 2010 onwards, when Rachel Botsman and Roo Rogers in their “What’s Mine Is Yours: The Rise of Collaborative Consumption” vaguely coined this term, it slowly seeped its way into corporate cultures and the importance of user experience and building relationships became multifold. To give you some examples, some of the famous companies dominating the sharing economy space are ridesharing companies like Uber, Ola and Shuttl, car renting companies like Zoomcar, furniture renting companies like Rentomojo, co-working spaces like CoWork and room rental companies like OYO.
There are some key aspects holding every peer to peer model together, the most important being trust whether it is about trusting your own instincts or trusting your service providers. With trust the second aspect is reputation. Every service, every mobile application survives on ratings and recommendations. This was evident when the extended stocks of Uber in the US fell by 1.5% after it reported its numerous cases of sexual assault or when my own mother in India was highly skeptical of me taking a cab at night. One hit to the reputation and it becomes very difficult to make a recovery. The third aspect is Ownership, sharing economies are making ownership accessible and cheap, a model where you have nothing and can choose to have everything when needed. Then we come to Community and Equity, while we are linking communities day by day we are also making them more crowded by invading their space and similarly the question of equity arises. Is an Uber driver cancelling rides because he does not want to drive a passenger belonging to a certain religion? There hasn’t been one, but many such cases. Do we see this as a flaw or the fact that the sharing economy model gives an Uber driver this freedom?
While this model allows Priya, a girl from Jaipur shifting to Gurgaon for her job, to rent an apartment, a car and every single piece of furniture in her house, making the process a smooth sale, it is not free of its flaws. In a nutshell, the concept of Uber allows a person to register his car with the company, become an Uber driver irrespective of any of his other jobs and earn money without the company being responsible for giving them health benefits or paid leaves. Not only is this an unstable occupation with no promise of steady income but also allows the person to merely earn a living and not make one. Ed Ericson Jr., a journalist for the Baltimore Sun rightly pointed out that ,”the sharing economy is predicated on the idea that there’s always going to be a huge pool of people who are willing to work desperate hours for no pay and no benefits” and there is no doubt that companies are exploiting this fact. He rightly mentioned in his TEDx talk that a problem poses three options in front of us- avoid it, solve it or exploit it, and these companies in most cases choose the third. Imagine bearing the cost of wear-and-tear, gas and commercial insurance as well as phone service, accounting, health insurance and taxes all on your own as an Uber or Ola driver. While companies are coming up with some regulations as time passes, a hotel will always be a more trusted choice than an OYO room keeping even the security aspect in mind.
All in all what has emerged as an opportunity for many, is still a soulless advancement and a threat to traditional business, while in India alone the shared economy was expected to grow to USD 2 billion by this year alone, COVID-19 has brought a threat to its existence. The world is learning to adapt to the new normal and so do these businesses. Redefining the need for their service and the target market is becoming key and new, stringent rules and regulations have become all the more important. With a shift from Uber and Airbnb to Amazon deliveries and Big Basket, the demands of the world's population have changed and this has been a new kind of learning for the sharing economy.
