Consumers today are becoming more comfortable with using rather than owning, such as Uber cars, Airbnb apartments, or TaskRabbit handymen. Collectively known as the sharing economy, these services combine cost reduction, benefit enhancement, and convenience into one convenient mode of consumption.
Many businesses rely on collaborative consumption-systems of organized sharing, bartering, trading, lending, time exchange and gifting for success.
1. Increased Access to Goods and Services
Collaborative consumption has seen tremendous success among consumers. From Airbnb homes and Zipcar cars to clothing exchanges and tool swapping, sharing is now a mainstream means of ownership in industries spanning food, fashion and energy.
This new model of consumer behavior offers numerous advantages to both producers and consumers alike. Perhaps the greatest of these is savings for consumers – being able to rent, borrow or share second-hand products reduces spending on new ones altogether and can offer much needed relief from overconsumption.
Other benefits of the sharing economy include environmental and social reformation, reduction of economic inequality between consumers, greater value distribution in supply chains, improved accessibility to services and products and altered perceptions of ownership. Yet despite all its advantages, sharing economy still faces certain obstacles; for example, it has no history of creating new jobs; may contribute to localism or racism , lack of regulation can result in unfair competition that increases precariousness within sectors [2, 3].
2. Lower Entry Barriers
Traditional businesses must pay licensing and regulatory fees that make their services more expensive for individuals; sharing economy firms tend to avoid this cost – giving them an unfair edge over businesses that don’t use this model; this may lead to less secure rental properties for consumers as a result.
Sharing economy startups have shown impressive rapid entry into the market during Stage II of their development. Mobility services and on-demand labour platforms dominated this phase, while room and car sharing platforms experienced lower growth rates.
The collaborative consumption industry follows similar patterns to other technologies, including automobiles, telecom devices and credit cards; initial entry costs were low but subsequent growth was exponential. To reach its full potential, sharing economy must continue expanding into new sectors while improving user experiences.
3. Lower Costs
Sharing economy services aren’t simply passing trends or an answer to economic uncertainty; they offer numerous tangible financial advantages for both consumers and small businesses alike.
Sharing economies are beneficial to consumers because they provide access to items they would have had to buy or rent otherwise; such as renting dresses from GrabOnRent or borrowing tools from Mooch rather than having to store and pay for them at home. They’re also an effective way for small business owners to reduce expenses while increasing sales.
Consumers can also live more sustainably by owning and maintaining fewer assets. Instead of spending money to own and maintain a car, for instance, consumers can turn to ride-hailing services like Ola, Rapido or Quickride or hire drivers through startups like Uber. Furthermore, consumers may shop secondhand stores for clothes or swap with friends in order to avoid buying new goods altogether; and apps like OLIO provide tools for fighting food waste.
Sharing economies provide temporary access to goods or services via rental, borrowing and swapping. They may serve as an antidote for the hyperconsumerism that has come to dominate society over the years while offering benefits such as cost reduction, benefit enhancement and environmental stewardship.
Airbnb and Zipcar are perfect examples of collaborative consumption, providing individuals the chance to make use of underutilized physical assets such as spare bedrooms or cars by sharing them through these sharing platforms. Not only are there financial benefits associated with sharing underused physical assets like this but users can also make profit off underused assets while simultaneously decreasing waste production.
However, the sharing economy can also be seen as an example of gig economy due to how it has destabilized more established industries by offering new types of employment that may not be as stable than existing sectors. This must be taken into consideration in order to maintain its positive effects on consumer spending and the wider economy.