May 28, 2019 All
The Real ‘Sharing Society’ In The Making…
How do we lay the foundations of a tangible sharing economy?
When we think of a few successful startups, or “unicorns” as we call them in the tech world, two names top the list: Uber and Airbnb.
Both of these companies bring to mind two age-old theories:
1) A good idea, no matter how simple, can work like magic.
Each of these companies has a very simple business idea at its core — so simple that most people previously couldn’t even imagine it or, if they did, probably rejected the idea, believing it couldn’t possibly be a business idea!
2) Innovation is often greater than invention.
These companies’ ideas weren’t brand-new. Prebooked cab services existed before Uber came along. And homestays had been available online way before Airbnb was born. They didn’t think of these ideas from scratch. Rather, they worked on the existing ideas, improved on them, and packaged them in a way that choosing Uber and Airbnb is now the most obvious thing to do.
But this article isn’t about Uber or Airbnb. This is about an interesting concept that these two companies have reinforced in the digital age of business that is powered by technology. It’s an idea known as the “Sharing Economy.”
What is the Sharing Economy?
“A sharing economy is an economic model whereby assets are shared directly by stakeholders, after coordination has been conducted over the internet.”
In this model, goods or services are not owned by one specific supplier/provider, but rather are owned by many parties and can be accessed by all members from within that network, either for free or at a certain price. This is also known as a peer-to-peer economy.
Simple, isn’t it?
When we book a place through Airbnb, we don’t have to book properties from a single company. There are, instead, multiple options available — from hotels to bed & breakfasts to homestays, and we can choose what best suits our requirements (as is the case with Uber.)
But as mentioned earlier, Airbnb and Uber didn’t introduce this economic model. The foundation of today’s sharing economy was laid when eBay first launched in 1995.
So what’s the connection? Why discuss the sharing economy today?
There are several reasons. First of all, it’s a new take, a different economic model from the traditional one and perhaps a better one. Why? Because this collaborative consumption seemingly resolves the traditional issues inherent in production, distribution, supply and demand, and consumption of goods and services. This means optimum utilization of resources and, thus, less waste.
Secondly, this model revolves around the concept of “sharing,” a recipe of collaboration and trust, which in turn fortifies a more sustainable economic model, i.e. Coalition Game over Competitive Game.
Maybe that’s why, when the idea first became commonly recognized in 2011, Time magazine proclaimed the “Sharing Society” one of the “Ten Ideas That Will Change the World.”
There are, however, two sides to every coin, and though there are certainly some good things about the sharing economy, the model has attracted some major concern and criticism as well.
The Guardian published a piece in 2015 stating the term ‘sharing economy’ needs to die because, “Nothing is being shared when you hire a cleaner to tidy your house or a car to drive you to work, even if you use an app to do it.”
Other industry veterans have also raised their concerns citing that the sharing economy had changed from what it initially promised to be, and rather than saving resources, it has begun exploiting them.
Say what now? What happened?!
While conceptually this model checked all the right boxes, the reality turned out to be different. Be it booking a cab via Uber, or a home-stay on Airbnb, there’s always someone in between controlling these exchanges.
From a collaborative economy, it soon became a controlled collaborative economy, where one party reaps all the benefits (the middleman), and the others get exploited (the service provider and end user).
The sustainable collaborative economic model that this concept promised, ended up being the same old competitive game – where one side wins and others lose.
Can it be fixed?
We need to innovate this model and take the ‘controller’ out of the system, so that they can’t control these collaborations anymore.
That’s how the real sharing economy will resurface!
Is that easy to do?
Well, not really, for two reasons.
1) The controlling party who reaps the most benefit can do this because they hold a lot of power – largely, in the form of information from both end users and service providers.
2) Sharing is a combination of collaboration and trust. While collaboration can happen without the controller’s presence, trust is a major factor that might be missing without them, as the controller/middleman reinforces trust in the system by validating information for both the service provider and end user. Not just that, they also take responsibility and resolve issues for any parties in case of foul play.
That’s why people often fall for this model of controlled economic collaboration and end up being exploited in more than one way.
Is there a way out?
There certainly is.
Decentralisation is a solution that fosters the sharing economy. It doesn’t only eliminate the middleman from the system, but also helps establish trust. As a result, all the promises that the sharing economy had made at a conceptual level (like optimum utilisation of resources, no labour exploitation, less waste, etc.), can be fulfilled in reality.
The good news is, it’s already started to happen.
A number of revolutionary companies that believe in a collaborative business approach have created a decentralised network that’s starting to spread. Sylo is one of them. Based in Auckland, New Zealand, Sylo has held hands with Centrality, SingleSource, Plug blockchain, and many more to lay the foundations of a real sharing economy.
Because it doesn’t have to be a zero-sum game. 🙂
Shaan loves weaving brand stories that are simple yet momentous. Over the past 7 years, he has explored several facets of Marcom to learn this art better. In 2016, he was awarded the ‘Star Youth Achiever’ from the Global Youth Marketing Forum for showing outstanding leadership and creativity. He feels, almost every brand has the potential to serve a humane purpose. As the Chief Strategist, Shaan is trying to bring that purpose to life for Sylo.