Head of Coolcorp Joe Issa and staff in animated sharing in the Marilyn Monroe dining room
at the Ocho Rios headquarters.
Technology savvy Joe Issa, who has previously hailed the Internet for enabling efficiency and convenience at both the individual and organisation level thereby “revolutionizing the way they do business”, now finds more reason to celebrate the digital platform for enabling the rise of the sharing economy and the opportunity for everybody to earn some extra money.
Explaining that the sharing economy is an economic model based on individuals and businesses sharing their skills and assets to make extra money, Issa compares it with the barter system which has existed for thousands of years, noting, “Of course, the only difference is today, there is the internet and smartphones which make it much easier for suppliers and consumers to meet one another to transact business.”
Issa explained further, that the economic model is set on the premise that people and organisation have skills and assets that are left idle for most of the time, which could easily be utilized by someone else and earn extra income. In so doing, providers and consumers are said to be sharing value, made possible through an online sharing platform.
“Because the suppliers in that shared marketplace do not carry costs like traditional businesses do, they can afford to provide them more cheaply. At the same time everybody – who has something to share – gets a chance to make some money and generate economic activity,” said Issa.
The term ‘sharing economy’, which has other names like shareconomy, collaborative consumption, collaborative economy, or peer economy, is believed to be taking business away from traditional markets, based on the rise in market share.
An article on the website, small business, said last year August, that the sharing economy is one of the fastest growing business trends in history, with investors dumping more than $23 billion in venture capital funding since 2010 into startups operating with a share-based model.
It said because many of these businesses are private, it’s impossible to know the actual size of the sharing economy. Some experts have projected market capitalization to reach over $335 billion by 2025.
Another article said sharing economies allow individuals and groups to make money from underused assets. In this way, physical assets are shared as services, citing for instance, car sharing services like Lyft and Uber.
Quoting data provided by the Brookings Institute, the article said private vehicles go unused for 95% of their lifetime. The same report reportedly detailed Airbnb’s cost advantage over the hotel space as homeowners make use of spare bedrooms. Airbnb rates were reported to be between 30-60% cheaper than hotel rates around the world.
Lyft and Uber, two of the biggest names in the sharing economy are going public in early 2019.
The Ever-evolving Sharing Economy
The sharing economy is said to have evolved over the past few years where it now serves as an all-encompassing term that refers to a host of on-line economic transactions that may even include business to business (B2B) interactions. Other platforms that have joined the sharing economy reportedly include:
Co-working Platforms – Companies that provide shared open work spaces for freelancers, entrepreneurs, and work-from-home employees in major metropolitan areas.
Peer-to-Peer Lending Platforms – Companies that allow for individuals to lend money to other individuals at rates cheaper than those offered through traditional credit lending entities.
Fashion Platforms – Sites that allow for individuals to sell or rent their clothes.
Freelancing Platforms – Sites that offer to match freelance workers across a wide spectrum ranging from traditional freelance work to services traditionally reserved to handymen.
The article said spurred primarily with the growth of Uber and Airbnb, it is expected that the sharing economy will grow from $14 billion in 2014 to a forecasted $335 billion by 2025.
Current Criticisms of the Sharing Economy
Criticism of the sharing economy often involves regulatory uncertainty. Businesses offering rental services are often regulated by federal, state or local authorities; unlicensed individuals offering rental services may not be following these regulations or paying the associated costs, giving them an “unfair” advantage that enables them to charge lower prices, the report said.
There is also a fear that the greater amount of information shared on an online platform can create racial and/or gender bias among users. Airbnb had to face racial discrimination complaints from African-American and Latino would-be renters. As more data is presented and the sharing economy evolves, companies within this economy will need to combat bias in both their users and algorithms, said the article.