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Home Other Stuff The ever-grow...
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The ever-growing sharing economy: Pros and cons

By
Hannah Neuburger
-
February 25, 2019
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In a world with a fast growing economy, ever-diminishing resources, overly populated cities, and sky rocketing prices, a sharing economy seems like the way to go. Also known as “shareconomy”, “collaborative consumption”, “collaborative economy”, or “peer economy” it is a market model of peer-to-peer exchange, typically facilitated by an online platform. Divided into five main sectors – transportation, finance, consumer goods, property, personal services, and professional services, shareconomies are popping up everywhere you look. Platforms like Airbnb and Uber are probably the most well known of their kind, but their European counterparts are not to be ignored.

Even though 80% of apps on my phone are shareconomy startups – I’m a regular user of e-scooter as well as car-sharing platforms to get around my city – there are many noticeable backlashes around the sharing economy – not to mention many permits, laws, legal debates that need to be had, and municipal laws haven’t been updated to deal with it. Remember what happened when Uber arrived in Barcelona? Better to not repeat that. So let’s look at some of the the pros and cons of sharing economies.

Pros of the sharing economy

– Flexibility: One of the things consumers appreciate when using or working in the sharing economy is the flexibility. In this market one does not have to “own” what is being used – making travel, change, and schedules more customisable than ever. For example, with the rise of the sharing economy, the possibility of working as a digital nomad from any spot in the world is made 1000x easier. With transportation sharing platforms, such as the Spanish Ecooltra and Yego, the e-scooter sharing company; Bicing, the bicycle sharing platform offering over 300 racks in Barcelona; long distance ride sharing platforms Amovens and Blablacar; or German car2go and drivenow, which offer car sharing companies in major European cities (and just recently joined forces) one has all of the flexibility they could wish for. Just open the app, check what mean of transportation is closest to you, reserve it, find it and GO! These options are perfect for individuals that are constantly on the go and late for meetings.

– Independence: For those who don’t care for traditional office work, sharing economies do not require professional working environments, so there is no need to stay put in an atmosphere that suit fit your personality. The best example for those are the large amount of coworking spaces that are accumulating. Ever more the professions that allow for flexible atmospheres are choosing to work remotely instead of in one physical office space.

– More sustainable use of resources: A sharing economy helps consumers to earn money by renting out under-utilised goods or resources. For example, renting out a home using Airbnb, expensive tools from one’s garage, cars, or even sharing the rest of the leftover groceries in the fridge before going on a holiday. All of these help to reduce waste – if only in a small way – and provides a way for items to be resold and repurposed intsead of just thrown away. Good examples are the Spanish platforms Wallapop or Vibbo, which alllow users to sell second hand consumer goods; Eatwith, which offers dinner experiences in private homes; Leftoverswap, which allows neighbours to swap leftovers and extra groceries within their community; Lendi, which allows you to lend your neighbours items, changing the way we consume (great for borrowing tools, outdoor grilling kits or sports equipment!). All of these platforms help us to save more and consume less, helping our pockets and the environment.

– Building community trust: A sharing economy is driven by its community. It is based on trust and collaboration between both its users and providers. Peer reviews and ratings are an expected part of every platform, fostering honesty and transparency, which are key components of a successful sharing economy. The Barcelona-based platform Badi, which is committed to make city-living accessible for everyone and everywhere by connecting people with shared spaces, is a perfect example of how a sharing economy is mostly driven by the people in it.

– Economic benefits: An obvious advantage of the sharing economy are the the financial gains it allows consumers. According to a report by Deloitte on the economic effects of Airbnb, consumers save an average of $88 a night by staying in an offered Airbnb accommodation as opposed to a traditional accommodation. Not only do these economic benefits support the users and providers, but also the full-time employees working for these platforms across the globe.

The cons of the sharing economy

– Safety concerns: Most sharing economy platforms are based on trust, as well as ratings by guests and hosts. But sometimes it happens that one uses a car, or rents and Airbnb and it is completely different than one imagines. After all, we have all heard tales of guests and hosts from hell.

– Lack of regulations: Another downside is that in many cases there is a lack of regulation to oversee the products and services exchanged during these transactions. For example, hotels are inspected to assure quality, whereas Airbnb apartments are not. The digitally-driven peer-to-peer nature of the sharing economy model doesn’t align well with current laws and regulations, and sharing economy services don’t have to comply with certain regulations, which on the other hand, helps keep the provided services more affordable.

– Uncertain future: The sharing economy definitely has its lovers and haters. Many are not ready to switch to that model, where others are already using more than four platforms in their daily lives. The business model is having many growing pains, and many “standard” employees are trying to stop the growth of it. We all remember that 9-day national anti-Uber and Cabify taxi strike, that more or less completely paralysed Spain, and got quite violent at times.

– Unstable income & no benefits: While sharing economies offer much flexibility in working hours, travelling, and freedom, jobs can be more unstable and may not provide living wages. Workers have to pay for business costs (upkeep, insurances etc.) which take a large chunk out of their income. The bottom line is consumers and businesses continue to evolve, and the sharing economy will evolve right with them. If one is “simply looking to earn extra money” to pay down debt or save for a large purchase, it can be a great way to make some extra cash. If consumers look at it as a sole source of income it can be much trickier. As a help for reusing resources and reducing waste, the sharing economy is one of the most important models currently. Whichever way one see this expanding market, it is worth trying and exploring if one finds offers interesting enough to stick with.

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  • TAGS
  • car sharing
  • ridesharing
  • sharing economy
  • tool sharing
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Hannah Neuburger
Hannah Neuburger is a Design Management & Strategy specialist with a background in Interior & Product Design. Hannah changed her path in 2017 to launch her first App and to fully integrate herself into the world of startups in Europe.

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