Written by Ali Pullaro
The sharing economy today is often conducted through online platforms. The sharing economy consists of short-term peer-to-peer transactions. From vacation rentals to shared ride services, companies like Uber and Airbnb have changed and revolutionized the way we as a society interact with the market. Some companies have been successes and some failures.
Uber, which offers shared ride services and Airbnb, which focuses on rental of homes through the internet are both based online. These peer-to-peer like companies have greatly impacted traditional industries, such as taxis and large hotel chains, and have significantly challenged traditional methods and generated both successes and failures along the way. Airbnb prices are reportedly between 30-60% cheaper than hotel rates globally (“Sharing Economy: Model Defined, Criticisms, and How It’s Evolving”).
For example, in some cities such as New York City, the rapid growth of services such as Airbnb has led to certain controversies such as subletting rent-controlled apartments for profits. As a result, it prompted responses to protect housing markets and tenants’ rights. Similarly, the real estate industry is facing upheaval, with the national real estate board agreeing to lower commissions in response to changing market dynamics. The rise in certain companies has great effects on some traditional jobs and markets. Regulations by the government have become the most significant barrier to these companies, especially within city governments. “Pennsylvania’s Public Utility Commission issued a cease-and-desist order on Lyft and Uber operations. The companies face fines of $1,000 per day, and 23 drivers face civil and criminal charges” (“How Uber and the Sharing Economy Can Win Over Regulators”).
Indeed, real estate appears ripe for disruption, with companies like Zillow and the increases in AI technology to streamline processes and provide more efficient services. Imagine a future where finding a home is as simple as typing a query into an AI-powered search engine. It is curious how this might change the need for realtors in the near future. The sharing economy has also seen its share of setbacks. While microloans have had success in some contexts, other forms of peer-to-peer lending, such as micro-lending which is a method that issues small loans to smaller business owners, have fizzled out (Brock). Additionally it is important to note that some platforms like GoFundMe have in fact been successful. However, with GoFundMe, it is also important to note that it is a platform that focuses on giving money rather than lending money.
Value of the sharing economy worldwide in 2021 and 2023 with a forecast for 2027 and 2031
Value of the global sharing economy 2023
References
Brock, Thomas. “Microlending: Definition, How It Works, Risks & Rewards.” Investopedia, 6 June 2022, https://www.investopedia.com/articles/personal-finance/040715/what-microlending-and-how-does-it-work.asp. Accessed 13 April 2024.
“How Uber and the Sharing Economy Can Win Over Regulators.” Harvard Business Review, 13 October 2014, https://hbr.org/2014/10/how-uber-and-the-sharing-economy-can-win-over-regulators. Accessed 13 April 2024.
Radic, Ivan. “Airbnb app icon on smartphone screen | Ivan Radic.” Flickr, 25 May 2021, https://www.flickr.com/photos/26344495@N05/51202457097. Accessed 13 April 2024.
“Sharing Economy: Model Defined, Criticisms, and How It’s Evolving.” Investopedia, https://www.investopedia.com/terms/s/sharing-economy.asp. Accessed 13 April 2024.“Value of the global sharing economy 2023.” Statista, https://www.statista.com/statistics/830986/value-of-the-global-sharing-economy/. Accessed 13 April 2024.