What are the Advantages or Disadvantages of Sharing Economy?

Advantages of Sharing Economy. What Are The Disadvantages Caused by the Sharing Economy? You should also look at Sharing Economy, which is another topic for Sharing Economy.

What are the Advantages or Disadvantages of Sharing Economy?

Advantages of Sharing Economy

1. Cheaper Products and Services

Sharing economy is based on the fact that sharing some products, services and skills is more efficient and effective. This allows people to have products and services cheaper and saves people time.

For example, you have a saw in your house. You only use it to prune trees in your garden for a few hours a year, and the remaining 364 days of the year are out of business with this saw. If you rent this saw for 10 lira a day and you do it many times, you can earn for example 350 lira per year. This is the basic philosophy. It is possible to apply this for service and skill sharing as well as products.

Buying a product second hand or just renting it when it's needed saves you a lot of expense and hassle. For example, if you buy a car, it will have many expenses, taxes and insurance. However, by using a system like Uber, you can reach wherever you want as if you have your own car and you do not have to pay for such expenses.

In other words, the sharing economy removes the "intermediary" factor to reach a product or service. This of course allows you to have the product and service at a more affordable price.

2. Additional Income

People who provide products, services or skills within the scope of sharing economy can earn additional income from these behaviors. So, based on the example we have given above, do you prefer to use the saw once a year and stay idle throughout the year? Or renting your saw for a fee and earning additional income?

You can earn additional income if you rent out your unused vehicle, house and belongings through sharing economy platforms. In a sense, you can spend this income, which we can call as passive income, as you wish… For example, you can buy that perfume you want so much by renting your tester without doing almost anything…

3.Fresh and Good Deals

The sharing economy gives people access to things they don't have. For example, you do not have money to buy a car or you cannot borrow money from banks. Thanks to interpersonal lending platforms, you can take credit and pierce the "embargo" imposed by banks, and you can travel in a latest model Mercedes thanks to Uber vehicles.

4. Spirit of Solidarity

Sharing economy platforms such as Uber and Airbnb attach great importance to users' votes and opinions, ensuring that these platforms operate properly. Collaborative workspaces and knowledge-skills sharing platforms also encourage the use of resources in a collaborative and solidaristic manner. Crowdfunding sites also survive thanks to the people who support people in realizing their projects.

In other words, sharing economy, as its name suggests, has a philosophy of "sharing and solidarity" elements.

For example, Airbnb provides free accommodation to people who are homeless due to natural disasters. TaskRabbit organizes and mobilizes volunteers in crisis situations. Such efforts based on trust make people who adopt the sharing economy feel that they are equal. Such respect-based relationships naturally build loyalty and devotion.

What Are The Disadvantages Caused by the Sharing Economy?

So, what kind of risks does the sharing economy carry? Let's take a look at them now.

1. Security Issues

The sharing economy requires some compromise from the privacy of the person on both ends of the deal. For example, let's say you rented a house or room with Airbnb. In such a case, you invite people or people you do not know to your home. Even if you know that in principle these people will follow the rules, you cannot be 100% sure of this. Probably such a thing will not happen, but we can say that there is still the potential for theft. Anyone using Airbnb will not do such a thing to jeopardize their own record, but as we said, there is little risk.

The same can happen with other sharing economy exchanges such as car sharing, product trading, knowledge and skill sharing.

On the other hand, places such as traditional taxi driving, retail merchandising operate officially and have to comply with the customer's rights protection legislation. This allows them to be held legally responsible. Legal responsibility is not one of the cornerstones of the sharing economy.

2. Lack of Warranty

When you share your resources with others, that is, when you rent your house, your car, when you lend money to someone, you take the risk that the other party may not "return" your property and money or damage your property. For example, you have designed and sent a logo for a company through Upwork. You cannot be 100% sure that the other party will pay you, and you cannot find a real addressee for yourself, as this company may be in Japan for example.

In addition, you can not be sure that the other party will not damage your home and car in home and car sharing and rental method. Although applications such as deposit and temporary insurance have started to be used for such cases, we cannot yet talk about elements such as "full guarantee and full insurance" in the sharing economy. Overcoming these issues will also increase the confidence in the sharing economy.

3. Dependence on the Other Party

Even if the people using the sharing economy platforms are in solidarity with each other, the sharing economy obliges the cooperation with the other party. This, too, may overshadow your independence somewhat.

For example, to use a conference room in the co-working area, you have to check the availability of the conference room. In other words, someone else may be using the conference room at the time you want. However, there is no such situation in your own company's office, you can use it as you wish at any time.

Again, in the house where you will stay in the home sharing system, you have to follow the rules of the host. However, when you stay at the hotel, you are free to act as you wish.

4. Market Intervention

Sharing economy can negatively affect the free economy as we know it from time to time. For example, the sharing economy has some negative effects on the real estate sector.

In a study conducted by the University of California Center for Economic Research in 2017, "a 10% increase in the number of homes offered by Airbnb in a city causes home rents to increase by 0.42% and house prices by 0.76% in that city. Although this increase does not seem like much, the number of homes offered with Airbnb has increased significantly in the last 10 years. Especially in cities such as San Francisco, New York, London and Berlin, the increase in rent and house prices is felt more seriously.

According to Zillow's research, it is understood that house prices have doubled in many cities in the USA when compared to 2012 and 2018.