Literature & Language Essay: Sharing Economy

Name
Institutional Affiliation
Course Code/Title
Instructor
Date
Sharing Economy
Introduction
The advancement in human civilization and more so with the integration of technology has resulted in the emergence of a unique phenomenon known as the sharing economy. The term refers “to the practices of sharing, exchange or rental of goods and services to others through information technology without the transfer of ownership” (Taeihagh 3). The primary goal of this system to elevate efficiency and effectiveness in which case there is an enhanced rate of utilization of products (both goods and services) and reduced transaction costs. Consequently, the transformation it has brought to the market concerning how products are provided has been immense. The diversity through which the idea can be applied across a range of sectors proves to be to demonstrate its underlying potential. An example is Airbnb, which is in the tourism and hospitality industry, and Mobike, which is in the mobility and logistics sector. Further, the sharing economy is apparent in other sectors such as financial services, goods, and equipment, food, and dining as well as labor and service platforms. The sharing economy continues to have a major and formidable continuity
Literature Review
The sharing economy idea is one that is popular among companies and academic researchers and even better, it has gained much-needed support from the market and the general public. Görög (177) asserts that the sharing economy grew in popularity after the 2007-2008 financial crisis when a significant number of individuals experienced financial difficulties compelling them to look for the alternative value of ownership and more importantly re-evaluate their consumption patterns. The financial recession had led to massive job losses meaning that individuals needed to search for alternative job opportunities. The rise in the sharing economy can be explained through different approaches: sociological approach, economics approach, and management theories. In the sociological spectrum, consumers are becoming more conscious of their responsibilities in contributing to ecological sustainability (Curtis and Lehner 7). Lately, the call for better environmental conservation measures has taken the greater course and people are convinced that in sharing the available resources they can reduce their ecological footprint. On the other hand, social commerce is predicated upon the peer-to-peer interactions that involve the use of social media. In this case, social media users share their experiences in using these IT platforms. Consequently, more are enticed to using these services as this influence motivates their purchasing decisions.
The economics behind this position is closely linked to the positivity that innovation cultivates and further, the competition that ensues. The articulation of the prevailing innovative culture guarantees that most of the transactions are cheaper in comparison to the conventional manner of conducting businesses. Consumers are rational meaning that they will seek the most returns concerning goods and services relative to their limited financial capabilities (Victor et al. 156). To this end, customers are drawn to products that save their hard-earned cash. Besides, there are other integral elements such as social and demographic changes and urbanization (Kaushal 8). Another economic angle is that in utilizing these resources, customers are relieved of the duty of exclusive ownership, which is a cumbersome task. Besides, there are lower-cost options when using the resources within the sharing economy space.
Finally, management theories can offer more insight into the fast-growing technological niche. The sharing economy has facilitated the creation of new business models, which has led to the creation of new types of companies. One of the defining characteristics of the sharing economy is its disruptive nature (Eckhardt). This factor underpins its great relevance as it alleviates the grandeur conventional “bricks and mortar” firms hold. Even further, it sets a precedent for the generation of new types of relationships between employees and their employers as well as companies and regulators (Hira and Reilly 2). The innovation and creativity involved have ensured that commerce is much more convenient to the masses. Companies can advertise their products via social media thereby reducing their overhead costs, which proliferates to consumers concerning decreased transaction costs.
Benefits of the Sharing Economy
The greatest benefit that can be articulated in the sharing economy is perceived from its economic sense. Many face the burden of ownership, which later translates into the cost of ownership provides significant convenience to many people across the globe (Habibi 349). Related platforms enable owners and users to meet halfway. Efficiency in this process guarantees that users gain access to products at affordable prices and could even enjoy them at a bargain during the firm’s promotional periods. Owners receive reimbursement for providing these resources meaning that they have an avenue through which they cover their own cost. This cycle of operation overcomes the initial problems related to enhanced burdens of ownership and tight budgets.
Even further, the sharing economy offers customers more alternatives with resources that would otherwise be idle being utilized effectively and efficiently. Beyond this prospect, major tangible values are transmitted including but not limited to communal values, social utility, and more importantly, the ensuing possible environmental benefits (Habibi 349). The collaboration between users and providers has to be a precedent of this relationship thereby promoting social interactions. Human beings are social animals and this type of participation in a sharing economy promotes guarantees continuity of this element of existence.
Previous results of the sharing economy indicate that it is a formidable path towards creating access and mobility for “the bottom of the pyramid.” This phrase is specific as it refers to the global population that is earning less than $8 daily. These are about 4 billion people with 2.6 billion of them earning less than $2 daily (Hira and Reilly 4). This group of individuals attenuates to the levels of poverty being that are prevalent around the globe. Their participation in informal economies is indirect because of a myriad of factors including lack of education or collateral. The sharing economies present itself as a worthwhile counterproductive event because of its smartphone application. Smartphones have reduced the barriers to entry. Today, smartphone applications can broker these relationships and facilitate information sharing thereby creating a link between the owners and providers. The economic and convenience benefits from both parties are enjoyed simultaneously.
Limitations of the Sharing Economy
On the other hand, the sharing economy has its downside. Its emergence has had a profound impact on the existing legal frameworks. There is a contentious debate on the possibility of an effective mechanism through which sharing economy firms can be regulated amidst the dynamics they bring and the pre-existing policy decisions. Regulators are at an impasse on the impact of imposed regulations sharing markets apparent in the transportation and tourism and hospitality industries. The primary goal is to ascertain whether these markets ought to receive similar treatment to conventional firms. The apparent predicament is evident in the number of ongoing litigation albeit the prospective ones. In Quebec, Canada for instance, the media has addressed various facets of the industry such as the possible circumvention of short-term rental laws placing ...