The core of economics is the exchange of goods and services between individuals, and the resulting collective whole. Sharing has always been a part of this network.
But the sharing economy is unique, born of the Internet's interconnectivity and the Great Recession's interest in sustainability and resource depletion. Humanity has not made such a leap towards global communal economics that transcends borders and time zones since the dawn of city-state trade and the Silk Road.
The sharing economy's impact is far from silent, despite the fact that few people know what it is. It's meant to describe the gig economy, commercialised carsharing, real estate sharing via companies.
THE SHARING ECONOMY
The sharing economy is an IT-based peer-to-peer economy where goods or services are shared between individuals via an intermediary without ownership transfer. In other words, someone owns something and rents it out to others for a fee.
The sharing economy is a major market disruptor. Like commercial real estate, the hotel and taxi industries are well established and highly regulated.
Privately owned assets and property are monetized by a customer base using these privately owned assets and property, with all transactions being peer-to-peer (between owners and tenants/renters).
This economic revolution is driven by the Internet and information technologies. Using another person's resources as conveniently as possible helps speed up consent and money flow between peers.
Companies as intermediaries are another reason for the sharing economy's rapid growth. With few exceptions, these companies have been able to maximise growth and profit rather than using revenue to acquire more properties and assets to rent out.
If you're not sure what the sharing economy is, consider it the digitalization of renting out your property to others. It isn't truly "sharing" because this economy isn't altruistic.
Instead, the sharing economy is driven by a desire to reduce waste (by letting others use your home while you're away) and generate revenue from your property (as through gig economy examples like Uber and Lyft).
The concept of a digital intermediary marketplace for peer-to-peer transactions is relatively new, and the lack of regulations allows for maximum profit and minimal liability.
SHARING ECONOMY GROWTH
The sharing economy is growing, as is the economic model of owning less and renting more – from apartments to goods, cars, workspaces, and services.
Platforms based on the sharing economy have exploded in the last decade, from banking to hospitality, risk capital, transportation, and more.
Some argue that this reflects a generational shift, with millennials being more frugal and less inclined to splurge on ownership. Another argument is that owning things is significantly more expensive due to declining purchasing power, rising costs of living, stagnant wages, and record wealth inequality.
The sharing economy is a form of crowd-based capitalism that allows temporary or rolling use of products and services at a fraction of the cost of total ownership.
PANDEMIC RESULT
The pandemic has proven to be a formidable foe for sharing-based businesses. Hygiene concerns, limitations in physical contact, and reliance on intermediary standards rather than traditional service providers have slowed the growth of the sharing economy.
These companies could still grow by lowering customer costs and allowing owners to monetize their assets during a crisis.
For example, the gig economy has exploded as workers seek work as steady employment shrinks. Home cooking became pseudo-essential as people avoided going out to eat.
So, too, the pandemic crisis provided opportunities for growth amidst industry concerns. The fact that a crisis gave birth to a startup, company, or individual is not a bad thing.
COWORKING AND SHARING ECONOMY
Even in the face of a pandemic, the coworking model has grown and thrived.
Businesses that cannot rely on work-from-home policies or wish to adopt work-from-anywhere policies must provide professional workspaces for their employees. It can be prohibitively expensive for smaller teams and startups.
Limited budgets and the need to scale quickly in a competitive economy have paved the way for coworking spaces to become a successful alternative to traditional office spaces.
Due to concerns about hygiene and social distancing, COVID proved difficult for coworking spaces, but proper in-space policies have helped coworking spaces adapt and thrive as an alternative for individuals who cannot adapt to work-from-home policies or miss the communal spirit of an office space.
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