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The Share Economy sample essay

This article discusses the new trend of consumers building multibillion-dollar marketplaces for sharing things like cars, homes, bikes, driveways, and tools. The trend stems from a desire to find a better deal as well as a need to make extra income in a stagnant economy. Through this process consumers are restructuring business as it has commonly been recognized. Frederic Larson is one of the many consumers that have noticed the true potential of the “share economy,” and he is exploiting this trend. Twelve days per month Larson rents out his home on a website called Airbnb for $100 a night. He nets $97 for every night that it is rented. And for four nights per week he transforms his car for all intents and purposes into a taxi, which he ends up pocketing another $100 per night. Larson admits that it is not the most desirable lifestyle as on the nights that he rents out his home, he stays in one room that he has isolated from the rental portion, and he showers at the gym. In spite of this inconvenience, Larson is willing to accept the lifestyle as he is pocketing $3,000 a month. With Forbes estimating the revenue stream to people’s wallets surpassing $3.5 billion this year, and growth exceeding 25%, more than 100 companies, in the form of digital clearinghouses, have sprouted up to support this trend. Some mainstream businesses have even taken notice. In fact, Avis purchased Zipcar to have a play in the revenue stream. While the sky appears to be the limit with this trend, it is not without its issues. For entrepreneurs, the issues hinge more on licensing, taxing of services, and the credibility of individuals using the services. Fortunately for them, the risk of individuals using the services is somewhat mitigated by checking a person’s profile on social media sites. For customers, the primary issues worth noting are centered on whether customers are sufficiently protected from liability and fraud. In the end, success or failure will likely depend on how these unresolved issues are handled, and if in the handling costs exceed mainstream business options.

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