Question

write on the growth of sharing economy and its impact on traditional business models.

Answer 1

Sharing economy is one of the fastest growing sectors today, attracting billions of dollars’ worth of private equity funding resulting in astronomical valuations of players. It is redefining the way people work, and how consumers and sellers transact with each other.

The sharing economy refers to an economic model of acquiring, providing or sharing access to different goods and services through peer-to-peer (P2P) activity, either for free or subject to a charge, typically through an online platform facilitating the transaction. The most famous examples are probably Uber in the transportation industry, Airbnb and Couchsurfing in hospitality, eBay in retail, Spotify in music and TaskRabbit in the freelance handy work sector are some examples

It is widely noted that the sharing economy especially attracts young adults or millennials, the generation born between the early 1980s and the mid-1990s and now aged around 22 to 38. According to a study, 53% of the users of the sharing economy are under 40. This is not surprising considering that millennials have come of age during a time of major technological change, globalisation and economic disruption; they are the first digital native generation, which has a big impact on how they shop and use services.

One significant thought process in the ongoing ascent of the sharing economy is the new buyer inclinations of recent college grads. Twenty to thirty year olds are the most supportability cognizant age and they are by and large battling environmental change. Contrasted with past ages, twenty to thirty year olds are less ready to purchase things like houses, vehicles, music or extravagance merchandise – recent college grads would prefer to utilize administrations that give access to items without the 'weights of proprietorship'. Using sharing economy stages is likewise observed to be advantageous, adaptable and reasonable.

Advantages of Sharing Economy:-

• Fewer expenses and more lenient requirements make it easier for individuals to drive for Uber & Lyft than a taxi company.
• 72% of independent workers prefer to be employed as contract workers rather than traditional employees. Sharing economy offers this type of flexibility and freedom
• low barriers to entry and flexibility to workers enables digital platforms to offer services at a lower cost

Disadvantages of Sharing Economy

In most cases the legislature is still unready for the sharing economy companies that are already present in several countries and have a complex operating model. There is no perfect solution for their regulation. The regime that applies to traditional players is automatically inapplicable to them in most cases, but neither do total bans appear sensible, as in many cases companies can circumvent these with legal loopholes. Given the appropriate regulation, however, sharing economy companies could benefit the economy. Since one of the elements of their competitive advantage is precisely their unregulated environment, traditional regulation would endanger their fundamental business model and thus their existence. Decision-makers need to examine the many positives and potential risks of the phenomenon together, and use this as the basis for determining any steps that may need to be taken.

The sharing economy challenges conventional thoughts of private proprietorship and is rather founded on the common creation or utilization of merchandise and ventures. There is another pattern with individuals who don't need responsibility for and prefer to "share" assets in a case by case premise with the comfort of their cell phone or computer. The estimation of an item is starting to be found as far as its utilization, not in its out and out possession, according to customary customer models. There is likewise an expanded degree of acknowledgment of utilized items; because of the fame of online stages for purchasing and selling utilized products. Consequently, individuals are adjusting to cooperative ways of life, in which merchandise are shared as well as offer their time, space and skill.

The accomplishment of the sharing economy has negatively affected traditional  organizations across different businesses that don't provide food for these evolving patterns. A few p2p organizations, especially Airbnb and Uber, have incited fights and bans over the world for upsetting the lodging and taxi ventures, individually. Customary organizations are currently concerned and need to address the sharing economy disruptors from taking their benefits. Set up firms are battling to continue their organizations with regular plan of action for its high gainfulness. Lodgings, taxi, and different ventures compromised by the opposition from the current sharing economy have an enthusiasm for keeping boundaries to passage high so they can procure additional benefit from a progressively hostage showcase.

Significant businesses like these won't acknowledge disruptors like Airbnb and Uber. The occupants frequently utilize political and administrative relationship to limit p2p organizations and ensure their market position. Uber for instance, has had administrative difficulties in numerous urban areas around the world where there is a settled taxi industry attempting to ensure its market force and net revenues. Thus Airbnb is continually focused by the inn business to be burdened similarly as lodgings alongside wellbeing and permitting principles to try and out the playing field.

Estabished enterprises ought to figure out how to develop or adjust successfully to meet the advanced mechanical real factors, or hazard getting old. They have to jump aboard with the shopper requests for improved administrations at lower cost and move away from the conventional plans of action so as to support their commercial center and gain by sharing economy's possible advantages.