The Sharing Economy
The sharing economy is a modern term that refers to mobile phone application-based businesses that enable people to share various services. Its two most popular applications are Uber and Airbnb. The former enables people to share their vehicles while the latter allows them to share their hotel rooms. Since these platforms allow people to use various services jointly, these applications have subsequently led to the emergence of the sharing economy.
By and large, mobile phone applications, which have led to the emergence of the sharing economy, are usually designed to make their developers earn income. Often, they reduce the costs that people would pay for services and enhance efficiency in the entire production process (Mason). The sharing economy is consequently mainly capitalistic in nature, and therefore be developed based on the capitalist model in the future.
In practice, the developers of applications used in a sharing platform usually aim at making profits. Developers typically earn a commission from the services offered through their platform (Chandler). For example, in Uber, part of the fees charged for each trip is remitted to the developer’s account while the remainder is paid to the driver. Similarly, the driver who offers taxi services using Uber is motivated by the opportunity of earning income. While ordinary taxi services would require drivers to queue and follow a specified formula for them to get passengers, the company’s application puts all drivers on an equal platform and enables them to have trips purely based on their competitiveness. In practice, therefore, all service providers who use sharing platform are motivated by their desire to make more incomes.
An assessment of users of applications used in the sharing economy shows that they embrace these apps due to their efficiencies. These platforms help various users to easily access available service providers and find the best deals for their services (Mason). For example, a person using Uber can quickly find the driver who is near him/her. The consumer is also able to have an estimate of the price for each trip before making an order request, which enables him/her to make a comparison with what is been charged by competitors. Similarly, a person using other apps such as Airbnb compares the prices charged when not using the application with those charged when he/she uses the application. Therefore, just like service providers, users of sharing applications always aim at maximizing their own benefits.
The fundamental reason why these applications have taken a capitalistic approach is that the eliminate free riders and creates efficiency. In a gift-based model, service providers would not be interested in ensuring they provide quality services. There would be a lot of waste, which would effectively make the system more expensive than contemporary business settings (Chandler). Given that e-commerce is increasingly being adopted by businesses, traders will have to develop efficient platforms such as those used in sharing economy.
In sum, the sharing platforms are capitalistic and not gift-based models. The main reason for this conclusion is that their developers and users are primarily interested in enhancing their own economic welfare. In particular, the service providers aim at increasing their market presence and having more customers. Developers usually earn a commission from each service provided through their application, while customers are typically interested in incurring the lowest costs for the best services.
Chandler, Adam. What Should the ‘Sharing Economy’ Really Be Called? The Atlantic, www.theatlantic.com/business/archive/2016/05/sharing-economy-airbnb-uber-yada/484505/. Accessed 1 November 2017.
Mason, Paul. Airbnb and Uber’s Sharing Economy is One Route to Dotcommunism. The Guardian, www.theguardian.com/commentisfree/2015/jun/21/airbnb-uber-sharing-economy-dotcommunism-economy. Accessed 1 November 2017.