Sharing economy revenues are set to double by 2022, according to a report by Juniper Research. Statista projects that by 2021, the number of participants will almost double to a total of 86.5 million. As stated by a 2017 Brookings Institute report, the sharing economy will be a 335 billion dollar industry in 2025. As far as the numbers go, everything looks good.
However, this relatively new phenomenon has its critics too. One of the more oft-repeated critiques is that the sharing economy harms workers and lets companies abuse workers. One author went so far as to say “The unspoken implication is that as a facilitator of commerce, the [sharing economy] company holds minimal responsibility for the impact of that commercial activity. Thus, by design, sharing economy models minimize company risk by passing it on to customers, workers and communities.” Past academic papers have also alleged that elements and segments of the sharing economy exhibit racism towards minorities.
And yet, despite these criticisms, the sharing economy is definitely here for the long haul, and several exciting developments are on the horizon. These developments may also address some of the major pain points in the industry.
Three Key Sharing Economy Trends and Developments for 2018
- The Youngest Generations Will Lead the Way – One of the main reasons for the recent growth in the sharing economy is the involvement of younger generations. Though it depends on the sample and data set, both millennials and Gen Z-ers have been labeled as the “most entrepreneurial generation”. Whatever the case may be, the world’s youth will play a large role in the future developments of the sharing economy, and their access and understanding of technology will only aide in technological advancements.
- Blockchain Technology – Blockchain technology is the key factor that will forever change the sharing economy. This is because, decentralization, one of its fundamental contributions, distributes authority and control while simultaneously cutting out expense third party operators.
One blockchain company, the Sharering network, is developing a digital token uniquely designed for the sharing economy. It functions on a global scale, is secured and protected by blockchain technology, and provides instant transaction confirmation. The platform is also fee-free, giving sharing economy workers and their customers a way to transact in an efficient, cost-effective, and decentralized manner.
Another company, Gladius is has created a decentralized CDN and DDoS protection network. It lets users to pool untapped processing and computing power to protect devices from DDoS attacks. Users link their devices together through the platform to create a distributed network. The collective pool, instead of a single server, then fights of DDoS attacks. This system greatly reduces the likelihood of a successful attack by distributing defensive processing power. In addition, protection plans are generally cheaper because third parties and server costs are removed.
Finally, some are working on decentralized platforms that allow businesses to crowdsource solutions for blockchain related initiatives. One example, FundRequest, has developed a decentralized marketplace for users to collaborate on open source projects. It connects developers directly with customers so that specific solutions can be proposed and implemented efficiently. Companies use the app to submit a request and attach a smart contract-secured fund to it. Everyone who contributes to the solution has a chance to earn the request’s funding.
Of all the sharing economy trends, blockchain technology has the most potential in terms of improving the overall landscape. By removing third parties, it can help foster a greater sense of accountability and transparency. What’s more, it will distribute power and control so a centralized party–such as the corporations behind Uber, Lyft, etc.–can’t abuse customers and / or employees.
- A Growing Emphasis on Products – The sharing economy is best known for service providers like Uber, Lyft, and TaskRabbit. Recently, however, the industry has seen a migration towards product-related companies. Turo, a site that lets users rent higher-end cars, and Spinlister, which provides a marketplace for renting bikes, are just two examples of companies that let users share physical goods for a daily fee. The business model pioneered by Airbnb will continue to spread to other consumer goods.