The paper discusses the 2013 Forbes article “Airbnb and the Unstoppable Rise of the Share Economy” contributed by Tomio Geron to highlight the role and impacts of the shared economy on traditional economy and consumer value.The primary value of the share economy (also referred to as a sharing economy) consists in disrupting conventional notions about the way economy works. This novel notion challenges the set conventions of consumption and ownership. The concept of share economy assumes collaborative consumption and serves as a hybrid market model that involves owning and gift giving that comes as peer-to-peer sharing of goods and services. The concept perfectly functions in times of digital age, cutting-edge technologies, and social networking (Kostakis and Bauwens, 2014).
The advanced digital media and networks enable people to coordinate community-based services online worldwide. Sharing of social and community resources complies with the previously adopted notions of B2B that stands for business-to-business as well as B2C that is business-to-consumer and other self-service options (Nanos, 2013). Sharing of resources as well as goods and services on a broad scale is possible due to the major change of customer behavior from ownership to sharing. The second crucial driver is that consumers connect through electronic markets and social networks online. The final driver that enables shared economy relates to the availability of mobile devices and electronic services enabling convenient sharing of goods and services. While sharing economy enables to exchange information about the available goods and services online, the value of the latter increase for businesses, individuals, and the society (Leonard, 2012).
The model of collaborative consumption primarily grounds on the online marketplace that involves such grand business platforms as eBay and innovative services, including peer-to-peer accommodation, work and travel, social lending, peer advising and car sharing among many other possibilities. At that, many economists tend to substitute the notion of ‘sharing economy’ with the notion of ‘access economy’ because the process of ‘sharing’ is market-mediated. This way, they claim that consumers pay for accessing goods or services offered by other people. For instance, Larson rents his Marin County home on Airbnb twelve days per month. In addition, he turns his Prius into a taxi through the ride-sharing service Lyft. This way, this average person leverages his assets into an income netting $3,000 a month. Consequently, his house and a car are the only two sources of his income. Further, he would also like to rent his camera equipment. This example shows how everyone may become a part of a shared economy providing that we are ready to provide people with access to our goods and services, or share them. The examples like this show how sharing economy substitutes the conventions of the conventional economy and doing-business in a physical way. Rather than a traditional house or car owner, Larson turns into a profit-making sharer willing to share his ownership with others. The same way, Larson’s clients benefit while they do not need to own a house or a car physically within the new economic reality of sharing. Such easily accessible and convenient options enable millions of people to travel around the world, feel fine and secured with renting the most necessary goods and services they need.
The sharing economy is also about the vast variety of micro jobs triggered by the online marketplace. Popular websites are offering an array of all possible services companies may order online ranging from one-time errands to the globally popular freelancing. More than that, the sharing economy has enabled direct links between goods and service providers and customers without intermediation of corporate sector. Apparently, direct contacts excluding intermediaries assume cheaper rates and other mutual conveniences.
With platforms like Airbnb, the sharing economy has turned into a revolutionary trend that has changed the conventions of doing business forever. The new economic reality in times of virtually sharing everything assumes unprecedented cost, life and environmental benefits. Customers are now re-considering the shifting role of access that assumes the same conveniences as ownership. The revolutionary economic shift of the new economic model also consists in monetizing the goods and services through the new online markets, which would have never gained such a value without digital technologies, online platforms and social networking. Such unprecedented options as profiting via Parking Panda, turning one’s pooch-friendly room into a pet penthouse via DogVacay, or offering a rent of a camping tent through Rentoid would remain uncovered in the realities of the conventional economy without enriching them with an added value promised by a sharing economy.
The share economy has turned into a new reality touching every person and company at any possible level. Thus, the economy and business processes surging it will never be the same. RelayRides and Getaround peer-to-peer car-sharing services, for example, are beyond one’s perception of a conventional service. Its strategic value now consists in the idea of sharing. The new market reality is actively monetizing every empty seat in a car, vacant room in a house, every unused piece of valuable equipment and so on. Virtually, the sharing economy is blowing up the industrial model of corporate ownership and physical consumption. The new economic reality enables everyone to benefit mutually as both a producer and consumer. The new economic model provides a promising pathway to the emerging startups such as Getaround, TaskRabbit, and Uber majorly impacting local economies and infrastructure. In 2013, the market cost of the shared economy surpassed $3.5 billion according to Forbes. While the access to assets is on the rise, still most startups chasing the trend will fail for the concept of the sharing economy grounds on a winner-take-all principle (Geron, 2013).
- Geron, T. 2013, “Airbnb and The Unstoppable Rise Of The Share Economy,” retrieved June 13 2016 from http://www.forbes.com/sites/tomiogeron/2013/01/23/airbnb-and-the-unstoppable-rise-of-the-share-economy/#5d935f816790
- Kostakis, V. and Bauwens, M. 2014, Network Society and Future Scenarios for a Collaborative Economy. Basingstoke, UK: Palgrave Macmillan.
- Leonard, A. 2012, “The Economy of Sharing,” Sunset Magazine.
- Nanos, J. 2013, “The End of Ownership,” Boston Magazine.