The sharing economy
by Multi-Prêts Mortgages
What you’ll learn
- What is the sharing economy?
- Advantages for consumers
- Nuances to be made
The sharing economy is a concept that’s been a bit of a buzzword as of late. Uber and Airbnb immediately come to mind, but it goes far beyond that, and isn’t necessarily a new concept.
There was a time when farmers shared farming resources and equipment to split the costs. A couple sharing a car is a type of sharing economy. New communications technology has simply turned it into a large-scale economy.
At its roots, it is based on the principle that we do not make optimal use of the land, products and services we buy. By sharing them with others for a price, we can reduce costs while doing our part against what some feel is excessive consumption.
By this definition, there seems to be a type of entrepreneurial ownership by individuals in the consumer cycle of goods and services. Some go as far as linking it to a social movement based on support, solidarity and environmental awareness.
For example, by taking part in a ride-share program like Car2GO or by carpooling, you help reduce traffic and the number of cars on the road. Bike rentals can also help lighten the load on public transit during peak hours.
Although the principle of the sharing economy is respected by many existing models, it can sometimes be used in a different way than intended.
Uber and Airbnb are eloquent examples of this dichotomy. If you rent out your home when going abroad on vacation, you’re taking part in an effective distribution of a rental resource and you profit from it. However, if you’re using the Airbnb platform to rent out a vacant apartment on a regular and recurrent business, it may be worth questioning if that should still be considered a part of the sharing economy. At that point, it becomes a business all its own, and should be regulated as such. For more on what’s involved in an Airbnb rental, check out our article: “Airbnb: Opportunities and limitations for homeowners”.
As a consumer, savings are an excellent argument to support the rise of this phenomenon. It also forces older industries in the transportation and hospitality fields to review their services and offer competitive pricing.
- The sharing economy is based on the principle that we do not make optimal use of the land, products and services we buy.
- There seems to be a type of entrepreneurial ownership by individuals in the consumer cycle of goods and services. Some go as far as linking it to a social movement based on support, solidarity and environmental awareness.
- As a consumer, savings are an excellent argument to support the rise of this phenomenon.