The sharing economy, where does it begin, or end

Monday, 9 February 2015

by: Qurius

The sharing economy is a fast-growing phenomenon. People increasingly share their home, car, clothing or tools on Internet platforms such as Airbnb, Relayrides, and Peerby. Along with its rapid growth, however, the sharing economy has also come under fire.

This criticism focuses in particular on the new taxi service UberX (or UberPOP in Europe) that enables anyone to work as an ‘amateur driver’. Consumers benefit from lower prices, but regular taxi drivers point to unfair competition and uninsured passengers. This controversy is attracting plenty of attention to the new industry, but the real question is: why do we think UberX is even really part of the sharing economy?

The controversy makes clear that it is ambiguous where the sharing economy begins and where it ends. Because sharing has a positive and progressive connotation, more and more companies claim that they are part of the sharing economy. However, an accurate definition of the sharing economy is consumers (or firms) granting each other temporary access to their under-utilised physical assets (‘idle capacity’), possibly in exchange for money. With this definition in mind, it becomes clear that many companies falsely claim that they are part of the sharing economy. (Note that our definition is more restricted than the one proposed by Rachel Botsman, who also includes sharing of other ‘assets’ such as skills and time.) Clarity about what the sharing economy entails is important, especially now that both proponents and opponents worldwide are asking for clear regulations.

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