The Sharing Economy – an Alternative to Standard Capitalism?

HHL Young Leader Scholarship- Full Time MBA (2015)

@ HHL Leipzig Graduate School of Management

Scholarship Essay

2015

The Sharing Economy – An alternative to Standard

Capitalism?

Indrajeet Singh

The Sharing Economy – An alternative to Standard Capitalism?

1. What do we mean by Sharing Economy and Collaborative Consumption?

The Sharing Economy is an economic model that has massified and commoditized

ideas of collaboration and sharing to redistribute underutilized assets.

Collaborative Consumption is a mechanism that places emphasis o􀅶 o􀅶e􀍛s a􀄐􀄐ess

to resources rather than ownership and carries its own ideology or set of ideas.

When we use the ph􀆌ase 􀍚Colla􀄏o􀆌ati􀇀e Consu􀅵ptio􀅶 ideas􀍛 It mean a set of

broader ideas that embody qualities and practices such as sharing, community,

togetherness, helping others, taking only what you need, and kindness.

Collaborative Consumption is the driving force behind the sharing economy, and

the ideal it strives to reach.

Sharing has been incorporated in economies in many forms both historically and

culturally, and now, technology is what separates the sharing economy from

other forms of sharing. Smartphones and computers have reinstalled the sharing

of resources and services on a large scale. There has been resurgence in the

notion of sharing because peer-to-peer 􀄐o􀅶su􀅵ptio􀅶 pla􀄐es e􀅵phasis o􀅶 o􀅶e􀍛s

access to resources rather than ownership. The sharing economy is attempting to

use Collaborative Consumption to be the economic backlash to hyper

consumption. The fundamentally new aspect now is that technology is being used

as the platform for enabling consumption among peers. The intersection of

technology and sharing is beginning a revolution in the way we consume and it is

called the two-sided marketplace.

EBay and Craigslist are examples of companies that operate as two-sided markets.

This is where two people join together through a third party to accomplish a task.

For example, one person needs to sell their lawnmower so they turn to the third

party website eBay and post the listing. The second person needs to purchase a

lawnmower so they also turn to the third party website eBay where they find the

lawnmower and purchase it. A peer-to-peer model of consumption is performed

because in this two-sided market both the seller and customer get what they

want directly from each other with the help of EBay as the third party. EBay and

Craigslist are two prominent examples of online platforms that enable peer-topeer

consumption.

This massification and commodification of sharing resources has turned side jobs

and temp work into a common practice, which makes financial gain from sharing

more prevalent. Sharing economy companies have become successful so quickly

because of the use of the two-sided market due to the development of newer

technology, and because of the way Collaborative Consumption ideas are

combined with capitalist business models. To look at the complexities of the

sharing economy and understand how this combination of collaboration and

capitalism is taking place, we will discuss the organizations Peers and Lyft.

Peers

In June 2013, Peers was founded as an online grassroots organization to help

promote the sharing economy and to bring like-minded peer-to-peer consumers

together. It is attempting to act as a platform of support for both the sharing

economy economic model, and the Collaborative Consumption ideal. Peers has

been especially useful when sharing economy organizations are faced with

adversity. It is also being used as a virtual meeting ground intended to strengthen

the sharing economy by bringing current participants, or peers, together and

further promoting the sharing ideas. The first big event put on by Peers was a

global potluck dinner that took place in October 2013. The way this worked was

Peers asked their members if they would allow their homes or spaces to be open

to other Peers members for an evening of food and discussion. Once the hosts

were set up, invitations were emailed to the Peers community again saying you

could register online using your email and zip code to find a host near you. Once

the guest ‘“VP􀍛d, all they had to do was arrive with a dish to share with other

guests and an open mind ready to discuss the Sharing Economy. This allowed for

the meet up to be a social gathering, an information session, and also a

brainstorming time. These three aspects combined created a sense of community

and began relationships among people who otherwise