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Policy makers need to stay ahead of these sharing-economy trends.Īs services and software converge, public officials must enhance their technical skills and work with the private sector to ensure market fairness and efficiency. On the other hand, technology platforms that use “algorithmic scheduling” to align workers’ shifts and hours with business cycles automatically, continue to disrupt family life and cause unnecessary stress. TaskRabbit, which subcontracts household jobs like assembling Ikea furniture, requires participants to pay a minimum wage, and has launched an insurance scheme to protect its US workers. Some firms have set their own operating standards. Seattle, for example, has deregulated its transportation and hospitality sectors, challenging the city’s taxi and hotel monopolies.īut economic change of this magnitude inevitably has its opponents, some with legitimate concerns.ĭo peer-to-peer businesses undercut incumbents by not paying similar taxes?Īre such businesses - flush with venture capital - running their operations at a loss in order to capture market share?Īnd should these firms be allowed to access telecoms data to learn about customers’ habits and movements, thus giving them an unfair advantage? Several cities have recognised the benefits to be gained from promoting a sharing economy. The opportunity to buy or sell has also become much more inclusive: half of Airbnb hosts in the United States have low to moderate incomes, and 90 per cent of hosts globally rent their primary residence. During the 2014 football World Cup in Brazil, a country with a chronic shortage of hotel rooms, more than 100,000 people used home-sharing websites to find accommodation. What began as a simple way for households to boost incomes - by renting out one’s apartment or car - has become a formidable disruptive force.įorbes magazine estimates that the sharing economy’s 2013 revenues topped $3.5 billion. The sharing economy also boosts entrepreneurship, as people see new ways to fill gaps in the market.
One reason why Uber and other sharing-economy pioneers are so disruptive is that they represent a highly efficient form of peer-to-peer capitalism.īuyers and sellers can agree directly on the price of every transaction, and business reputations depend on transparent customer feedback, generating continuous pressure to improve performance. Similarly, crowdfunding platforms, such as Kickstarter and Lending Club, allow start-ups to raise grants, loans, or investment from the general population, rather than relying on a financial intermediary.īy cutting out the middleman, these online platforms empower individuals, reduce transaction costs, and create a more inclusive economy.īut their evolution is far from straightforward, and many such services will require careful regulation if they are to flourish - as protests and court rulings in Europe against Uber demonstrate. They can share transport, using Uber, Lyft or RelayRides provide accommodation through Airbnb tender household chores via TaskRabbit, Fiverr, or Mechanical Turk and arrange their grocery deliveries using Favour and Instacart. People can now circumvent many traditional service businesses.
T he increasing ability of people to exchange goods, services and labour directly, via online platforms, is transforming how modern economies operate.īut to ensure that the rise of the “sharing economy” works efficiently and improves conditions for all parties, some regulation is needed.