The rise of sharing economy can be attributed to the lack of resources in cities rapid urbanization and demographic shifts. All these reasons tied to the technological explosion has fueled the growth of collaborative economy or sharing economy.
The companies which began with this line have grown with the tag line that they are giving value to the earlier unused assets an opportunity for people to make money and the availability of more growth to the city dwellers.
The two big names in this model of business are uber and Airbnb. Though these companies are now present in almost every country in the world, all the pioneers once began in Silicon Valley of USA or some of them in Europe.
Today we have sharing economy involved in houses, cars, dresses, cooking spaces, boardrooms and event spaces. There is availability of professional assistance like photography, financing to plumbers and electricians on demand. So we need to know how much these companies are actually involved in our life mathematically.
Why should we measure sharing economy?
The companies along this line have been building local economy and provide jobs and most part of the sector is not legalized with definitive laws pertaining to them. Therefore the government needs to measure the impact of these businesses on the economy to regulate them.
However there are several challenges involved in measuring the system such as classifying the sharing economy activities, capturing money transactions between individuals and non-monetary transactions.
The main challenge is the absence of a commonly accepted definition for sharing economy as it is possible that any pre-existing business can contribute to the sharing system.
The large number of people involved is another hurdle, all the workers who work to complete the process.
Here are some of the numbers which show the path of economy
The economy grows based on people’s willingness to share which is the main factor of growth
The global averages of people who are willing to share their assets are 68 percent and the ones who are ready to accept things shared by others are 66 percent.
The above stated figures are healthy for the growth of business.
Continent specific figures
Asia pacific region
Willingness to share their assets 78 percent and the ones who are ready to be on the receiving end are 81 percent.
70 percent would share their assets and 73 percent will be ready to share from others.
Middle East and Africa
68 percent are ready to share and 71 percent will take up shared goods and commodities.
54 percent are fine with sharing and 44 percent are ready to take up shared services and commodities.
With the number of people willing the economy share is projected to be at US $335 billion from the present $240 billion by considering only five major sectors of sharing economy- peer-to-peer accommodation, car sharing, peer-to-peer finance, music, TV, video sharing and online staffing.
The three major countries which have the highest number of people involved in sharing economy is 80 million in USA, 23 million in UK and 10 million in Canada.
Some other number which show the strength of these companies
Airbnb has currently 2 million listings on its platform, making it the biggest hotel group in the world.
The cradle of these companies USA has 1 in 5 of them working for the platforms and 2 in 5 uses them in their day to day life.
The people who are more interested in this business are millennials, 39 percent of college grads in America are involved in these services.
But apart from millennials there are older people too entering the platform. Examples are chefs who have toiled all their professional life in kitchens in hard environment; they now want to work in conditions favorable to them.
Is sharing economy just a passing trend?
- There are a lot of people stating that this economy is just another trend which will fade away soon. But the above figures clearly show us that the economy is growing and has started marking its own territory.
The major socio-economic reasons apart from just number to support this claim are:
Rapid Urbanization, there are more and more cities developing without proper facilities and resources, therefore a cheap and easily available commodity through sharing economy is a welcome.
Aging population, the healthcare system has advanced thus raising the life expectancy of humans this means that the elderly population need a source of income which can be availed easily through peer-to-peer sharing.
Declined interest in ownership and consumerism, people ( at least a sizeable population) are no longer interested in owning things and are rather comfortable with access and availability at affordable prizes.
Regulation and liability
At present there are legitimate concerns regarding the sector like consumer safety, insurance and government regulations. These discussions are essential for a healthy growth.
But there are two extreme set of people in this argument one are the lobbyist and the other are obstructionist. Both do not serve any purpose to the actual cause.
In a society where people are craving for more comfort these companies are not going anywhere. This condition is similar to early 2000 of online shopping. Also people are not about consumption and are now more interested in access.
The obstructionist should understand that this is innovation and must be accepted gladly.
But to ensure the safety government should step in to give clarity on topics regarding insurance and taxes.
Since the company alone is not the income gainer in this platform the government has to even tax people who work as a side job. In this regard the government has to obtain clear data bases from the companies.
This is essentials since the above mentioned figures how much tax can be gained by the government through the local economic activity.
Also the workers should be made aware of the tax their liable to pay.
Costumers should have basic safety when they avail services, they must be guaranteed by the company, though their own employees are not involved in providing the service. The so called contract workers are not thoroughly verified by companies since they are not hiring them. This puts customers in a lot of danger.
Labor norms, one cannot expect the 20th century industrial laws to be extended to this new generation workers as they have lot of flexibility in working.
However they too must have certain rights reserves by the government or else companies might take advantage of the situation and drive the wages down as there are lots of people available.
Also companies do not guarantee them any sort of work environment guarantee or immunity against costumer harassment. In these cases laws should be formed on how they can protect themselves from the misuse of the companies.
The workers of these companies cannot form labor organizations as they are not workers any particular company, they are just contract workers and therefore they cannot put a common demand to the company and negotiate with them.
After a while there will be no separate term called sharing economy it is going to remain just as economy.
Author Bio :
Anand Rajendran is CEO and Co-Founder of Dectar, best PHP scripts development company located in India. Dectar is a part of Casperon Technologies a leading social and mobile development company which is Developing Uber for X apps like Couriero – On Demand Delivery Services App for the past 3 years.
Image Credit: jeff pineau