A Day in the Life: The Sharing Economy
Imagine that you wake up in the morning and make yourself breakfast with groceries delivered the night before by a close neighbor who had your grocery list via a social media platform. You leave your house, noticing that the renter using your spare bedroom has already left for the day (you make a little extra income this way, but it's not inconvenient because the renter has access to a separate entrance). You walk to the carpark and check the app on your smartphone for a car that you could rent for few hours; you locate one, unlock it with your smartphone, and drive to your meeting place.
As you approach your destination, you check another app for the cheapest available parking. You find one at a nearby condominium (this space is available for the next several hours because the owner drove to work). The meeting place is a large conference room, rented for the day by your company, in an office building nearby.
In the evening, back at home, you decide to go for a bike ride. You walk to a bike-sharing kiosk and use your smartphone to unlock one of the bikes. You ride to the nearby park; going back home, you decide to walk instead of ride, so you leave the bike at another conveniently located kiosk.
On your way back, you stop by a coffee shop where you meet one of your friends who hands you the books you ordered online (the books were delivered to your friend's address together with the books your friend ordered). At home you assemble your newly purchased desk using a drill you rented using yet another app from a neighbor.
This vision is increasingly becoming a reality. We are witnessing a paradigm shift away from the exclusive ownership and use of resources to one of shared use and, potentially, shared ownership. This paradigm shift is taking advantage of innovative new ways of peer-to-peer sharing that are voluntary and enabled by Internet-based exchange markets and mediation platforms. Value is derived from the fact that most resources are acquired to satisfy peak demand but are otherwise poorly utilized. Several successful businesses in the US and elsewhere—such as AirBnB for rooms in private homes, Uber for taxi service, LiquidSpace for office space, RelayRides (now Turo) for private car sharing, and TaskRabbit for errands—provide a proof of concept and evidence for the viability of the sharing economy.
Sharing has the potential of increasing access while reducing investments in resources and infrastructure. In turn, this could have the twin benefit of improving consumer welfare while reducing societal costs.
Take, for example, cars: the availability of a sharing option may lead some to forego car ownership in favor of on-demand access via the car-sharing option. In turn, this would result in a corresponding reduction in road capacity and parking infrastructure, freeing up significant land for alternative uses. Combined with other forms of sharing, particularly office and residential space, the net effect on both access and sustainability could be significant.
Of course, increased sharing may have other consequences, some of which may be undesirable. For example, greater access to cars could increase car usage—and, therefore, congestion—if it is not accompanied by a sufficient reduction in the numbers of cars, if patterns of car usage are not properly managed, if sharing leads to speculative investments in cars and price inflation, or if it affects the availability and pricing of other modes of public transportation (e.g., taxis, buses, and trains). Social and behavioral impediments could also limit the adoption and spread of a sharing culture, including issues of trust, privacy, and status.