Sharing economy

Definition

The sharing economy refers to an economic model where individuals can share access to goods and services, often facilitated through online platforms. This model allows for peer-to-peer exchanges and emphasizes the utilization of underused resources, creating a more sustainable and efficient approach to consumption. The sharing economy challenges traditional ownership models by promoting access over ownership, transforming how people interact with goods, services, and each other.

5 Must Know Facts For Your Next Test

1. The sharing economy has grown significantly due to advances in technology and widespread internet access, allowing users to connect easily with one another.
2. Major examples of sharing economy platforms include Airbnb for lodging and Uber for transportation, which have disrupted traditional industries.
3. The sharing economy promotes sustainability by maximizing the use of existing resources and reducing waste through shared access.
4. Consumers participating in the sharing economy often benefit from lower costs compared to traditional models while gaining flexibility in how they access services.
5. Regulatory challenges exist as the sharing economy continues to expand, with concerns about safety, taxation, and competition with established businesses.

Review Questions

• How does the sharing economy redefine traditional ownership models in international business?
  • The sharing economy redefines traditional ownership models by shifting the focus from owning goods to accessing them as needed. This change creates new opportunities for businesses and consumers alike, as it allows for more efficient use of resources and encourages collaborative consumption. By enabling peer-to-peer exchanges through digital platforms, the sharing economy opens up markets to new players and fosters innovation in service delivery.
• Discuss the impact of the sharing economy on established industries and what challenges it presents for them.
  • The sharing economy significantly impacts established industries by introducing new business models that prioritize access over ownership. This disrupts traditional companies, such as hotels and taxi services, which face competition from platforms like Airbnb and Uber. The challenges include adapting to changing consumer preferences, navigating regulatory environments, and addressing concerns regarding safety and liability as they compete with agile sharing economy startups.
• Evaluate the potential long-term effects of the sharing economy on global trade patterns and economic structures.
  • The long-term effects of the sharing economy on global trade patterns could be profound, leading to a shift in economic structures towards more decentralized and flexible market systems. As more individuals engage in peer-to-peer exchanges, traditional supply chains may be disrupted, fostering localized production and consumption. This could promote economic resilience but also challenge existing regulatory frameworks and necessitate new approaches to taxation, labor rights, and consumer protections at an international level.

Related terms

collaborative consumption: A model that focuses on the shared use of goods and services, allowing individuals to exchange or rent items instead of owning them outright.

gig economy: An economic system characterized by short-term contracts or freelance work, often mediated by digital platforms, rather than traditional full-time jobs.

peer-to-peer (P2P) platforms: Online platforms that facilitate direct exchanges between individuals, enabling them to share resources or services without the need for intermediaries.