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Change Management Economics Economics Management

Collaborative or Sharing Economy

“We used to live in a world were there people, private citizens, a world where there are businesses, and now we’re living in a world where people can become businesses in 60 seconds”.

“We used to live in a world were there people, private citizens, a world where there are businesses, and now we’re living in a world where people can become businesses in 60 seconds”.

By Brian Chesky.

Collaborative consumption or collaborative economy is defined as an interaction between two or more subjects, through digitized media or not, which satisfies a particular need.Digital platforms establish a framework, where users can interact with each other and with the same platform. Users select the role they want at the moment, or several roles simultaneously and it is an open and dynamic system. Normally, there is an evaluation system among users, through which they acquire a reputation, and with it, the confidence necessary to continue carrying out the activity they want.The greater the number of users that exist in the digital platform, the more value it will have. Besides, the users will have more possibilities of choice and development, they will be better evaluated and the trust will be more contrasted.The movement of collaborative consumption implies a cultural and economic change in consumer habits marked by the migration from a scenario of individualized consumerism to new models powered by social media and peer-to-peer platforms.In the collaborative consumption services, the barriers of distrust are minimized thanks to the use of user profiles with valuations and references added by other users, which gives rise to new ways of relating, exchanging, and monetizing skills and economic goods. Ir what was unthinkable a few years ago.

Evolution

The concept of collaborative consumption began to become popular in 2010 with the publication of the book What’s Mine Is Yours: The Rise of Collaborative Consumption. Rachel Botsman, co-author of the book, gave a talk on collaborative consumption at the TEDxSydney conference in May 2010, in which he explained how access to goods and services can be of priority importance without the need to own them. In Spain, the phenomenon of collaborative consumption began to be known between 2012 and 2013, especially in the tourism sector, although it has continued to expand in many other sectors, revolutionizing the transport of passengers and very recently the real estate market.According to the Time magazine, collaborative consumption is one of the ten great ideas that will change the world. New York Times columnist, Thomas Friedman, believes that the collaborative economy “creates new ways of undertaking and also a new concept of the property”. The MIT has calculated the potential of collaborative consumption in 110 billion dollars, when today around 26,000 million, generating a profit of about 3,500 million according to Forbes magazine.

Examples of collaborative economy platforms

Among the multiple examples that come to mind when talking about the collaborative economy arise the platforms to share cars. Blablacar is a company created with the aim of serving as a link between travelers and drivers, so that both parties benefit from the fact of sharing a vehicle: the driver reduces costs by charging a price to the passenger, and the passenger pays less for a journey It would be more expensive if you traveled by bus, train or plane.Airbnb is another clear example of collaborative economy. The platform is the link between landlords and tenants of accommodation, which allows the two groups to take advantage. The owners of the houses manage to rent their properties, while the tenants pay a lower amount of money than if they spent the night in a hotel or hostel.

The advantages of the collaborative economy

Currently, the possibilities to take part in the collaborative economy are innumerable. There are so many platforms dedicated to it that counting them would be an infinitive job. Given this fact, it is worth asking the question why every day new tools appear that favor the ‘sharing economy’. The answer is obvious: because it brings many advantages.

These are some of the main ones.

Less money: the products or services offered in this type of platform have a lower cost than those acquired or contracted in a traditional way.
Caring for the environment: the platforms that promote collective transport contribute to reducing CO2 emissions. It will always be better to have a car that carries four people than four cars carrying one person.
Helps entrepreneurship: the collaborative economy has encouraged many entrepreneurs to create their own platform. In addition, systems such as ‘crowdfunding’ have helped bring forward ideas that otherwise would never have achieved the necessary subsidy.
More to choose from: consumers have access to alternatives that, had it not been for the collaborative economy platforms, would not have been available to them.
The human factor: the collaborative economy fuels social relations, dialogue and solidarity.

The pros of the collaborative economy

But not everything is rosy in the model of the collaborative economy. Being a new economic model, the current legislation does not cover many of the cases in which collaboration between users comes into play. It is not necessary to look back many months to remember the taxi strikes against Uber that were registered in several European cities, and how the taxi drivers claimed rights for having paid licenses and insurance at a high price.The European Union supports these forms of exchange, but the regulations are still far from having given shelter to all the cases that may arise. As explained in an article published in La Vanguardia, there could be cases in which the collaborative economy was used in an unorthodox way: if a person uses an Uber car every day to cover the same route, there would be doubt as to whether it’s about ‘sharing economy’ or an undercover taxi. The controversy is served when it comes to new business models.

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