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Sharing Economy

For young consumers, sharing is caring

Unsplash Creative 0.0: Photo by Robert Anasch

Services such as Uber and Airbnb represent immense opportunities for employment and innovate consumer services...

The current COVID-19 pandemic has shown both how much the sharing economy has helped consumers access essential goods and services, while at the same time revealing the restrictions and regulations that undermine them. For instance, sharing economy services have made it possible for many consumers to access food delivery services during COVID-19 lockdowns. 

The Consumer Choice Center’s Sharing Economy Index 2020 looks at 54 world’s most dynamic cities to see which ones are the most sharing economy-friendly. According to the findings, excessive regulation of taxicabs has caused a lot of harm, and with various ride-hailing services entering the scene, the issue has become particularly apparent. The fear of competition has taken taxicab drivers to the streets and, in the end, resulted in even tighter regulation of ride-hailing services. In order to reduce the disparity between traditional taxi cabs and ride-hailing services, most cities introduced a taxi drivers licence requirement for ride-hailing service drivers. In all cities, except Kyiv (Ukraine), it is necessary to obtain a taxi driver’s licence to become a taxi driver. Although the requirements differ from city to city, becoming a rideshare driver isn’t significantly easier: out of 52 cities analysed, only ten do not have a similar taxi licence requirement. 

A smarter way forward would be less regulation of both taxicab services and ride-hailing, not more. Instead of picking losers and winners in the marketplace, institutions and regulatory bodies should create and sustain the conditions under which both traditional services and platform businesses can compete on equal and fair terms. It should be only up to the consumer what service to use.

Young consumers have been early adopters of sharing-economy innovations. In essence, this phenomenon sheds lights on a new perspective on the efficient use of scarce resources. This works for the known application of sharing economy services such as houses, flats, cars, bicycles, or gyms. But the pay-per-use system also works for services such as gyms or office space, or even for household items -- for instance, why buy a hammer you'll only need a few times when you could order a hammer for a single-use occasion, paid for the time you needed it. This would create more resourceful communities, more accurately producing what is needed for each household. 

As digital natives, young adults are easy to convince of such services, but companies such as Uber and Airbnb have quickly shown that even those who did not grow up with computers become tech-savvy when it comes to saving money on better services, or utilising their resources efficiently. On top of that, the review system of these companies allows for more security and oversight. With Uber, parents can more comfortably let their teenagers be picked up by drivers that are identified and known by the company that relays the service. On Airbnb, the community roots out bad actors through reviews and complaints.

The sharing economy also provides employment opportunities that previously did not exist for some people. A comment by Benjamin Bell (former Head of Public Policy at Uber), who appeared on LinkedIn, clearly shows this: “I was driven home by a man with a hearing impairment, very well rated in the application by Uber passengers, but not in the traditional labour market.” He added: “Technology lowers barriers and raises aspirations.”

It is not in the interest of any country or consumers to regulate the sharing economy to safeguard industries and corporations that have been regulated by the state for decades. If hotels and taxis want to compete with new technologies, they will have to adapt, rather than clinging to government protection. The sharing economy is a necessary technological disruption that benefits everyone.

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