The Sharing Economy

Almost all of us here has contributed to the rise of the sharing economy. While the word “share” is defined as giving a portion of something to someone or others which clearly has a positive connotation, is that really the case in this scenario?

A poll conducted by the European Commission reports that ⅓ of people aged 25-29 have tried a sharing economy service, leading to changing consumer behavior in how people move and encourage traveling (Bae et al, 2017). The age group is known for being heavy users of social media, emphasizing the link between social media use and the sharing economy (Lin, 2020) as they have similar forms with a compulsory use of real names and display important information to both sellers and consumers.

While the barriers to entry are low and the platforms are easy to use, sharing economy is heavily dependent on social media to reach its target market while utilizing user rating and recommendation systems to encourage reputation building. From the outside perspective it’s merely a commercial transaction we are used to in this digital era but is the exchange of services for money the only thing that is involved in the transaction? They may be free to download and use for us but it seems like we are the products itself (Buckingham, 2017). They sell our personal data to advertisers; our locations, the stickers we use, the events we attend, and our deleted searches enable them to create an advertisement profile. Their facial recognition database could be used to gather all of our information available in other platforms which is…disturbing, at the very least.

two women facing security camera above mounted on structure
An accurate representation of social media platforms watching every single move we make.

The lack of regulations may encourage complacency as the providers are not required to follow as many rules (Neuberger, 2019). Airbnb rooms are not inspected, uber drivers only need to have a driver’s license and their vehicles approved while taxi drivers need to apply for driver accreditation consisting of a medical examination as well as examining their driving history. Although it makes the services more affordable, do we just accept the fact that we have to simply trust the providers with our needs and safety? 

Call me old-fashioned but what makes my experience meaningful with a brand is the personal interaction. With this new business model, customers do not feel the need to be loyal to a brand as they tend to pick the service with the lowest rates. UberEats may be my favorite but once I get that email saying I can use a code to get free delivery with no minimum order from Menulog, I’d switch with no hesitation for that specific purchase. More sign-up incentives and cheap deals lead to higher number of competitors that keep coming in, and one bad experience may result in instant brand-switching. While this is not particularly harmful to the society, it may be difficult for these brands to retain its customers while still keeping the same level of profit margins. 

green coupe scale model
On the road there are countless cars from platforms like Uber, Lyft, DiDi, and other rideshare companies available at our fingertips

Let me know in the comments if there is any other aspect of the sharing economy you disapprove, or extremely pleasant and unpleasant experiences!

Disclaimer: all images used are creative commons

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5 Comments

  1. i agree with you, i can really see that while sharing economy has made things more accessible and cheaper for consumers, yet it raises some safety concerns for both consumers and contractors. Let’s take Uber as an example, when you are sharing your car with someone, there is that risk that the passengers might accidentally or not damage your car, and that will be on your responsibility to fix it. As a passenger, when you ordered a ride from an uber, you essentially requesting a ride from a stranger and there is no guarantee for your safety, and what is worrying is that over the years there has been thousands of reported cases by uber passengers of sexual assault.

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    1. Thank you for sharing your perspective. I like that you point out the fact that its not an issue for only customers, as more businesses are focusing on customer centricity and treat them like they’re always right. It’s also important to focus on the contractors too as they’re the ones who deliver your service. As a matter of customers’ safety, I think Grab or Go-Car in Indonesia has updated its app with an emergency button for passengers to allow them to press it (while simultaneously sending the location) in case they feel unsafe.

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  2. Very well written, Felicia! Thanks for this interesting post.

    I think the novelty of sharing-economy businesses might be one of the reasons why there is a lack of regulation in this sector. Coming from Indonesia, I often encountered with terrifying stories of sexual assault or violence coming from market-leading ride-hailing users. As far as I know, the resolution to prevent this issue from happening again only came from the ride-hailing service provider and there was not any intervention from the government. Quite concerning since these incidents happened quite often back then. Interestingly enough, these stories often spread through social media, which is what you mentioned to be a reliable tool for sharing economy service to reach to their target market. I suppose conflict management will be one of the key skill they will be constantly seeking in their social media team to retain their reputation in consumers’ mind.

    Cheers,
    Yunisa
    https://yanw0001.wixsite.com/allthingsmarketing

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    1. Hey, I’m from Indonesia too! Thanks for sharing your thoughts, Yunisa. It is ironic how the rise of social media platform has contributed to the development of ride hailing apps, yet these stories are viral because there’s an increasing number of people who use social media in Indonesia. Another issue that bothers me is that GO-JEK (Indonesia’s very own UberEATS and Uber but with motorcycles) drivers can keep your phone numbers even after the transaction is complete. While this business model is certainly beneficial for people who are time poor and want a quick access to transportation/other kinds of services, it is extremely important that there are laws to protect both the consumers and service providers, though the flexibility may be one of the biggest advantages of doing business in the sharing economy.

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