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Sharing Economy: Benefits and Difficulties Essay

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Updated: May 1st, 2020

Over the last couple of decades, our world suffered several massive economic crises that led to negative outcomes in a variety of countries of Asia, Europe, America, and the Middle East. Even though thousands of experts and scholars are focused on studying the processes happening within the global economy, project, and predict them, the biggest and most advanced economies of the world still tend to go into crises from time to time.

Due to the economic contagion, the biggest economies influence smaller ones, and the crises spread, carrying their negative outcomes all around the world. This series of crises may be the result of the old model of an economy based on massive production and excessive consumption, the model that has been widely promoted for decades.

Today, this old fashioned model seems to be losing its popularity and gradually become replaced by the new approach of sharing economy that actively takes over the world’s societies. The sharing economy is a drastically new kind of lifestyle. As it develops, the new social norms and habits go into the clash with old ones, and the old policies face difficulties trying to match the new ways of living.

The term “sharing economy” speaks for itself. It represents the kind of economic relationships that are based on sharing resources of various kinds – people, raw materials, products, and services. The sharing economy, also known as the peer economy, is grounded on peer-to-peer interactions with the purpose of collaborative consumption, entrepreneurship, attainment of cheaper services and goods.

This is a unique kind of interaction that occurs between the consumers and results in new kinds of services that allow borrowing and lending properties such as rooms and houses, transportation vehicles of various kinds, clothing, technical devices, and household appliances. In the contemporary world, there are a number of services designed to detect the allocation of resources and inform the seekers about the opportunities.

Companies that provide such services can be viewed as matchmakers that bring the owners of goods who do not currently use them and the individuals seeking to rent these goods for a low price (All Eyes on Sharing Economy par. 1). The sharing economy allows the owners to earn additional money and the hirers – to attain goods and services for lower prices, which, basically, makes it a win-win situation. Among the largest companies focused on promoting sharing economy services and benefits are Airbnb, RelayRides, Uber, and Lyft.

The companies that specialize in renting out accommodations and vehicles currently are the most successful, and it seems like these services are in the highest demand. This is understandable because purchasing cars and apartments can be very inconvenient, and not everyone can afford it. Besides, many people experience the need in a personal vehicle or accommodation only occasionally, for example, when they travel. This means that they are not interested in purchasing a car or accommodation.

Borrowing one is what they need. Entrepreneurs, who start companies and create applications and software that helps owners and users find each other and connect, are the third winning side in sharing economy relationships; they act as mediators and also charge for their services. The phenomenon of sharing economy has been developing for several years now, and the changes it introduced to the society and policies within it did not remain unnoticed.

Apart from the three winning sides of the sharing economy, there is also a side that is rather unhappy about the new state of things. It is mainly comprised of individuals whose jobs and businesses are based on services that are currently provided by peers to each other within the sharing economy. The companies that promote peer-to-peer car and accommodation renting endanger the income of official cab drivers, transportation workers, hotels, and estate agents.

This way, Uber headquarters in London recently became the target of the striking cab drivers that tend to lose income because of the activities conducted by Uber (Inman par. 1). As a result, the shared economy causes job destruction for several categories of employees and business owners. As well as enforcing unemployment, sharing economy manages to consume some of the free human resources through hiring some of the unemployed individuals as entrepreneurs or part-time workers.

Politically, the general rules of the tax systems in such countries as the United States and the United Kingdom stimulate the citizens to seek entrepreneurship as “gains on wealth are more lightly taxed than earned income” (Inman par. 19). As the current sharing economy is widely promoted, it is likely to involve many more owners and consumers soon, which may significantly reduce the state income-based on taxation.

This way, the means employed by the sharing economy may become addressed by the politicians in order to be reduced. The fact that was sharing economy “operates in a gray area between personal and commercial, public and private” makes it very difficult for the lawyers and policymakers to distinguish which actions and operations fit their regulations and which do not (Kamenetz par. 5).

For example, garage sales are tax-free up to some limit. They are not allowed to run over thirty hours a week. Otherwise, they start to be considered illegal sales (Kamenetz, par. 7). This rule may also start to be enforced for the accommodation renting processes.

Certainly, a highly individualized and personalized economy that has been dominating for decades makes society reluctant about accepting the concept of sharing. Socially, the idea of sharing things we own does not seem attractive to the majority of contemporary people raised to work hard to be able to afford things, pride themselves in owning objects, and divide the society into the ones that own and the ones that do not. Sharing is mainly based on the mutual trust of owners and users in sharing relationships.

A great number of individuals would not be open to the idea of giving away their properties on a temporary basis to a stranger for money. Trust has never been promoted in contemporary society; this is why the sharing economy is not welcomed in a variety of countries all around the world.

Besides, companies that engage owners in sharing their properties do not tend to enforce any employment laws; this makes the owners rather vulnerable to all kinds of negative outcomes and accidents. Therefore, employment policies may be viewed as the main future obstacle for the sharing economy in the social and political aspects.

The sharing economy, without a doubt, carries a great number of benefits for the society of the contemporary world. It also has a massive potential of changing the economic relationships of the present days. Yet, there are a number of factors that need to be looked into in order to make this emerging kind of economic relationship safe for its users and customers.

Works Cited

. The Economist. 2013. Web.

Inman, Phillip. . 2014. Web.

Kamenetz, Anya. 2014. Web.

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