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The Present Status and Examples of the Sharing Economy

Discuss about the Crazy New World Of The Sharing Economy.

The term “sharing economy” represents a specific economic activity, where online transactions take place. Through the peer-to-peer service, an open-source community offers goods and services to its customers (Bratianu 2018). Hence, in modern world, this concept is enhancing rapidly, where people are conducting their everyday transactions through online while it sometimes cover the business-to-business (B2B) operational area as well. Thus, it refers a model of hybrid market, where community-based online services offer peer-to-peer transactions or a democratized market place. Hence, the resource circulation system can be observed under this economy, where a consumer performs dual role, for instance, resource provider and resource obtainer (Korhonen, Honkasalo and Seppälä 2018). Therefore, through this collaborative consumption system, the comprehensive characteristic regarding the dynamic role of a consumer can be understood, while an individual or a group earns money by utilizing underused assets. Thus, physical assets are offered to customers in the form of services, for instance, Uber and Lyft.

Within this sharing economy, various operational platforms take part, for instance, platform of co-working, fashion, peer-to-peer lending and freelancing. Through co-working platform, companies offer open workspaces while fashion platform offers people to purchase or sell their clothes (Langley and Leyshon 2017).  Moreover, under peer-to-peer lending, people can lend money to others with a lower interest rate while the last one offers freelancing works to people. Hence, this business report intends to find some benefits and limitations associated with this economy after discussing the present conditions and examples related to it. Moreover, a discussion based on crowd sourcing website is going to be done and after that, a reflection on sharing economy can also be described.

The sharing economy is going to capture a significant part in the world economy through its increasing market share. Hence, it is essential to analyze the present status of this economic activity through considering its underlying economical, social, political and technological factors that can influence this business activity to develop further (Zervas, Proserpio and Byers 2017). By emerging suddenly, this sharing economy has generated new and unseen challenges for policy makers, consumers, business organizations and economic regulators. Based on certain statistical data, it can be said that this platform economy is going to earn $ 335 billion in 2025 while in 2014 it has $14 billion (Schor 2017). This estimation has been done based on rapid expansion of Uber and Airbnb (Constantiou, Marton and Tuunainen 2017). According to this data, private vehicle has remained unused about 95% of their entire lifetime. Hence, through Uber and Lyft, people have received ample supply of rides along with cheaper prices. According to a leading magazine of the U.S.A, almost 42% Americans have used this service in 2016, while 22% people have provided one (Cusumano 2017). However, on the opposite side, Japan does not utilize this service like the U.S.A and hence, only 1 % people among total population have used a service from the sharing economy (Thebault-Spieker, Terveen and Hecht 2017). In the U.S.A, people, aged between 16 to 34 years, have used a service of sharing economy compare to others. The most utilized service is ride sharing, which can be obtained through Lyft, Uber and Sidecar. There are some other services like room sharing and personal one, which are also used significantly in this country. The room sharing is provided by VRBO, Airbnb and Homeaway while for the personal services, various online portals like, and Taskrabbit have provided facility.

Special Case Study on Uber

However, most of the companies under sharing economy have experienced a small platform through losing money and collecting small amount of venture capital, except Airbnb, as it has collected venture capital worth $ 3.1 billion and has earned valuation at $ 30 billion. Hence, the company has earned sufficient amount of profit in 2016 (Peng 2017). On the other side, Uber initially has collected venture capital worth $ 10 billion and consequently has reached a valuation at $ 70 billion though, in 2016, this sharing company has lost $ 2.8 billion on revenues worth $ 6.5 billion (Zhang, Kolte, Kettinger and Yoo 2018). This phenomenon has created huge criticism regariding this sharing economy and also has generated some promises of this service to operate in real field. Hence, it can be beneficial to analyze this economy with real example.

The initial reason behind successful business of Uber is network effects. Through positive feedbacks, every additional user or service or complementary product can give an extra benefit to other users, which in turn has helped to exponential or geometric growth in value (Cusumano 2017). Hence, for Uber, by increasing the number of drivers the service has become more convenient and consequently has attracted more users (Angerer et al. 2018). Moreover, by providing other facilities like sharing of driving experience and connect with other networks through third party apps, the service has increased its business. In addition to this, the platform company has provided subsidies to its drivers to attract them more, which in turn has helped this company to expand its business further. At the same time, the company has offered lower price to its customers and by doing so, this sharing company has successfully maintained its strong base of customers and drivers (Perren and Kozinets 2018). However, the concerned company cannot maintain this success trend as it has faced limited economies of scale due to huge amount of expenses for research and development, sales and marketing and also has experienced increasing costs due to legal challenges in various cities of the U.K and Paris. The next reason is “multi-homing”, where customers of Uber can utilize other traditional services or other competing platforms like Lyft, for the purpose of transport.

After the expansion of this sharing economy during the middle of 2000s, it has negatively affected the traditional procedures. Those platform companies have changed the interaction pattern of any business organizations with their customers and also have helped to utilize unused resources. Hence, sharing economy has some benefits as well as some limitation on economy.

Benefits of the Sharing Economy

The economy can experience some benefits associate with this collaborative economy, which can be described as follow.

People have purchased various durable products, like car, for the purpose of consumption. However, over the time, utility level of those products has decreased significantly and at the end, they have been left unused. With the help of sharing economy, owners of those durable private products can provide those others to reuse to earn revenue (Geissdoerfer, Savaget, Bocken and Hultink 2017). Hence, with the help of those online platforms, people can utilize those unused products.

Those platforms have generated various employment opportunities, for instance, an individual can write for those websites and can sell unused products. On the other side, customers, who cannot afford those products to buy, can take rent though those websites. Moreover, this sharing economy has provided flexible hours of jobs and revenues.

The need of production for a particular product has decreased as people can get opportunity to consume the similar one that has produced before  through this sharing economy (Yang, Song, Chen and Xia 2017). Hence, this activity has consequently helped the economy to reduce its pollution level.

Consumers have received the opportunity to utilize some services at lower prices compare to that under traditional business. Uber or Airbnb have charged cheaper price on their car riding or rooms lendings, which in turn have become convenient for many people (Parguel, Lunardo and Benoit-Moreau 2017). Moreover, this service has helped a society to strengthen its social relation by offering peer-to-peer service, where seller can meet with customer or can provide services to them directly.

Each company can increase its service quality through customer’s rating system. This system has further helped an organization to compete with other industries, who offer same kind of products. Customers, through this facility, can provide their feedbacks and can expect to get better services in future.

Irrespective of some benefits, the sharing economy has possessed some limitations as well that can influence an economy adversely.

This business activity has reduced the profit making opportunities of full-time workers. Moreover, through destroying the traditional way of service, the sharing economy has occupied employment opportunities of many people, which in turn has negatively influenced a country’s national income (Martin 2016).

As the entire process is conducted through online, both buyers and sellers do not get any protection and consequently can be suffered from various malpractices. For instance, sellers can offer inferior products to their customers or after providing services to customers; sellers cannot get exact revenue or even cannot trace some customers after providing services.

Limitations of the Sharing Economy

Through offering room services, Airbnb has sometimes provided negatively implications on a local community. By renting unused home to unsown person, this service can sometimes destroy the local culture by increasing noise, insufficient parking spaces and unusual behavior, for which, this particular society can face lack of security.

Crowdsourcing website offers goods and services to a person or an organization along with different business ideas and funds. Large and open group of internet users, who are developing significantly in the market, offer those services (Trechsel 2018). People can get various crowdsourcing websites in the market.

The chosen crowdsourcing website is Kickstarter of Australia that provide funds to an individual for completing a specific and unique project, for instance, to make a video album, the singer can gather funds through this website. for a person, it becomes difficult to collect money from only one source while this website offers huge number of investors, who contribute small amount of money. On the other side, investors also get benefit if the projects can receive success. The chief difference of Kickstarter from other websites is that, investors do not bear any responsibility if the project has failed.

Investors invest their money only for unique and innovative projects. They always ask questions regarding it. Hence, the person needs to fill up a form in this website by describing details of project and its outcomes (Kickstarter. 2018). Kickstarter only accept those in which they have found interest.

As unknown person receives benefits from others through peer-to-peer service, this crowdfunding website also has provided same facilities to their customers. Unknown people get chance to collect funds from others while for earning revenue, investors also invests their money. This site has huge demand as many people have successfully completed their projects by receiving funds from here. Thus, its activity has aligned successfully with this sharing economy.  

This request can help this business organization to promote its business under the sharing economy. For instance, the website has funded for a documentary film, named, Dream Girl where 1904 backers have intended to invest within this project and has collected $104157 to complete this project. This documentary film has forecasted some stories of successful women to inspire others. As the project has reflected an innovative and unique idea, it has successfully collected money through this website.

 As sharing economy provides both goods and services, this documentary video has huge contribution on sharing economy. Through this video, many people have received inspiration. Moreover, with the help of unknown investors, this video has achieved huge success. Hence, this project has contributed to this sharing economy significantly. Kickstarter has some other projects, which also have hige contribution on this economy (Kickstarter. 2018). People are Watching more videos and movies through those online websites  and this has changed the pattern of watching movie.

As sharing economy is expanding rapidly, it can influence any business activity significantly. Hence, according to my knowledge, this marketing process is going to capture a significant share of consumers and market as well. This has provided a new way of business, where any person can take part to earn profit (Standing and Standing 2018). Hence, for unemployed person, who has some unused resources, this business strategy can help to earn remunerations, which in turn can help the entire economy to grow faster. It helps many consumers to purchase or utilize their required products at lower prices if they cannot afford to purchase those products at its original market price. For instance, a person may not has enough money to buy a car but can use a car to travel through Uber with lower prices, while other taxi services charge comparatively higher price. Moreover, Airbnb offers empty or unused rooms to guests, while hotel fare is comparatively high. As sellers or lenders are getting direct benefits through this sharing economy, they are trying to provide best services and products to their customers. Moreover, through various crowdsourcing, this business organization can set their business strategies in an efficient way. With flexibility of work and salary, this business strategy either can help any unemployed or employed person to earn revenue and this process is eco-friendly as it helps to reduce the production of any product, like car, that spreads negative externalities in the economy.

In future, the sharing economy is going to be a significant business strategy with its huge contribution to a country’s national income. Furthermore, as it helps to reduce the unemployment of a country, the government can implement some rules and policies for protecting the self-interest of both buyers and sellers (Frenken and Schor 2017). However, at the same time, it needs to be kept in mind by the government of a nation to protect the traditional business; otherwise, the entire economy can be affected adversely. All over the world, the number of internet users is increasing significantly, which in turn is giving a huge prospect of this business activity to expand further. However, for attracting more customers and more sellers, this service needs to eliminate all malfunctions, under this sharing economy.


In conclusion, it can be said that the sharing economy is going to be an important topic at present, which can be described with the help of some real instances, like Uber and Airbnb. Initially, Uber has experienced huge success though with time, it has incurred losses. On the other side, Airbnb has earned huge success. This concept has earned many controversies for which, this repot has analyzed benefits and limitations associated this business strategy. However, this business strategy can perform successfully in future if the government can implement effective rules and regulations. In this context, it is also important to analyze about some crowdsourcing funds from which people get chance to collect their money. Many projects has successfully completed through Kickstrater where investors also have rewards. Hence, under sharing economy, this crowdfunding website also has huge importance. Thus, this report has analyzed this funding resource with a small case study where a documentary video has collected huge money for its unique concept.


Angerer, P., Zimmermann, S., Pale, G., Salomon, G., Provin, D., Kathan, W. and Matzler, K., 2018, January. The Impact of Dynamic Two-Sided Platform Pricing on Fairness Perception in the Sharing Economy. In Proceedings of the 51st Hawaii International Conference on System Sciences.

Bratianu, C., 2018. The crazy new world of the sharing economy. In Knowledge management in the Sharing Economy(pp. 3-18). Springer, Cham.

Constantiou, I., Marton, A. and Tuunainen, V.K., 2017. Four Models of Sharing Economy  management Platforms. MIS Quarterly Executive, 16(4).

Cusumano, M.A., 2017. The sharing economy meets reality. Communications of the ACM, 61(1), pp.26-28.

Frenken, K. and Schor, J., 2017. Putting the sharing economy into perspective. Environmental Innovation and Societal Transitions, 23, pp.3-10.

Geissdoerfer, M., Savaget, P., Bocken, N.M. and Hultink, E.J., 2017. The Circular Economy–A new sustainability paradigm?. Journal of Cleaner Production, 143, pp.757-768.

Kickstarter. (2018). Dream, Girl: The Documentary. [online] Available at: [Accessed 8 Apr. 2018].

King, D.L., 2018. Trend Watching. Library Technology Reports, 54(2), pp.14-2.

Korhonen, J., Honkasalo, A. and Seppälä, J., 2018. Circular economy: the concept and its limitations. Ecological economics, 143, pp.37-46.

Langley, P. and Leyshon, A., 2017. Platform capitalism: the intermediation and capitalisation of digital economic circulation. Finance and society., 3(1), pp.11-31.

Martin, C.J., 2016. The sharing economy: A pathway to sustainability or a nightmarish form of neoliberal capitalism?. Ecological Economics, 121, pp.149-159.

Parguel, B., Lunardo, R. and Benoit-Moreau, F., 2017. Sustainability of the sharing economy in question: When second-hand peer-to-peer platforms stimulate indulgent consumption. Technological Forecasting and Social Change, 125, pp.48-57.


Perren, R. and Kozinets, R.V., 2018. Lateral Exchange Markets: How Social Platforms Operate in a Networked Economy. Journal of Marketing, 82(1), pp.20-36.

Schor, J.B., 2017. Does the sharing economy increase inequality within the eighty percent?: findings from a qualitative study of platform providers. Cambridge Journal of Regions, Economy and Society, 10(2), pp.263-279.

Standing, S. and Standing, C., 2018. The ethical use of crowdsourcing. Business Ethics: A European Review, 27(1), pp.72-80.

Thebault-Spieker, J., Terveen, L. and Hecht, B., 2017. Toward a geographic understanding of the sharing economy: Systemic biases in UberX and TaskRabbit. ACM Transactions on Computer-Human Interaction (TOCHI), 24(3), p.21.

Trechsel, A., 2018. Nele Leosk, Alexander Trechsel: The Estonian People’s Assembly: a Systemic Approach to Crowdsourcing Initiatives Nele Leosk, European University Institute. Policy, 2016, p.2014.

Yang, S., Song, Y., Chen, S. and Xia, X., 2017. Why are customers loyal in sharing-economy services? A relational benefits perspective. Journal of Services Marketing, 31(1), pp.48-62.

Zervas, G., Proserpio, D. and Byers, J.W., 2017. The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research, 54(5), pp.687-705.

Zhang, C., Kolte, P., Kettinger, W.J. and Yoo, S., 2018. Established Companies' Strategic Responses to Sharing Economy Threats. MIS Quarterly Executive, 17(1).

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