Sharing Economy: Risks and Opportunities in a Framework of SDGs
Sharing economy is defined by a large set of for-profit and not-for-profit activities developed alongside the expansion of information technologies. Based on the idea of temporary access rather than ownership, the sharing economy proposes an alternative consumption model based on the shared use of private resources. In recent years, large academic and political debates have been devoted to investigate the contributions that sharing activities could provide to the transition toward a more sustainable future.
Examples of sharing economy activities
Transport: Related to the provision of transport services taking place by sharing cars, by transports, or by the development of specific “on demand” services
Examples include Zipcar, Uber, car2go, BlaBlaCar, GoCarShare, GoGet, CarNextDoor, GoCatch, Zazcar, and Locomute
Property: Related to the provision of short-time accommodation. It generally relates to the use of spare rooms in private houses
Examples include Airbnb, Noirbnb, Couchsurfing, GuestToGuest, and Fairbnb
Good and services: Related to the provision of large variety of goods and services. It can take place both in a for-profit or not-for-profit context
Examples include Deliveroo, EatWith, UberEATS, JustEat, foodpanda, hungryhouse, NeighborGoods, Freegle, Freecycle, TaskRabbit, Needto.com, Ayoudo, and Timebanking
Financial support: Related to the provision of credits or financial investments taking place in a system running outside the traditional banking structure
Examples include Kickstarter, GoFundMe, Indiegogo, and CircleUp
Ranging between transport services, shared accommodation, crowdfunding initiatives, and the provision of goods and services, both within and outside the market system, the sharing economy is difficult to define. Dalberg (2016, p. 2), for example, defined the sharing economy as “sharing assets – physical, financial and/or human capital, between many without transferring ownership, via a digital platform to create value for at least two parties,” and Mohlmann (2015, p. 193) classifies into sharing economy all the activities where “participants conduct sharing activities in the form of renting, lending, trading, bartering and swapping of goods, services, transportation solutions, space or money.” Matzler et al. (2015), on the contrary, define the sharing economy according to the main activities characterizing the interactions, namely, (i) a product-service system based on private ownerships and shared use of products and services (e.g., Airbnb, Uber, Zipcar); (ii) a redistribution system, characterized by a monetary or nonmonetary exchange of products (e.g., NeighborGoods, Freegle, Freecycle); and (iii) a collaborative lifestyle environment in which people share space, abilities, and time (e.g., Kickstarter, TaskRabbit, Timebanking). The lack of a clear definition and the inclusion of a large set of activities, based on a wide range of business models, make it difficult to estimate the possible impacts that sharing activities can generate on economy, society, and environment. From a theoretical perspective, sharing economy has been described as a possible solution of the instabilities generated by the traditional market regulated exchanges. In particular, the sharing economy has been framed as a system able to contribute to a transition toward a more sustainable future (Botsman and Rogers 2010). The idea of collaborative consumption, based on access over ownership, and the possibility to establish socioeconomic relationships taking place outside the traditional business environment, has highlighted the possibility of a consumption model able to reduce the impacts on environment and to increase socioeconomic opportunities across members of society. Within this context, the sharing economy seems to align with many of the objectives established by the Sustainable Development Goals (SDGs). Oriented to reduce poverty and inequalities by respecting the environmental limits of the planet, the SDGs have been established to guide the policies of developed and developing countries. In the next section, the main positive impacts of sharing activities are described in relation to the SDGs. In particular, the main risks, limits, and constraints generated by the present structure of the sharing applications are analyzed both in relation to developed and developing countries.
Sharing Economy: Benefits and Potentials in a Context of SDGs
- Economic impacts: From an economic point of view, the sharing economy has the potential to introduce new business models, to stimulate economic growth, and to generate employment. The development of activities ranging across hospitality, transport, good and service provision, and financial support can contribute to diversify the economic panorama and to generate additional income across different levels of society. In particular, the following economic impacts can be identified:
To encourage small and local enterprise: The development of activities taking place outside the traditional market mechanisms is creating business opportunities for small and local enterprise. The creation of a specific market that change the use of privately owned resources (from private consumption to shared use) has the potential to empower individuals and to provide income and business opportunities outside large corporation and centralized institutions (Benkler 2017; Munoz and Cohen 2017).
To promote alternative source of funding: The generation of additional income, the community support provided by sharing activities, and the development of investment provisions based on the use of online platforms (such as the crowdfunding initiatives) are providing financial support outside the traditional banking and credit system (Stephany 2015).
To reduce income disparities: The generation of additional income, the creation of new business opportunities, and the provision of financial support can contribute to reduce inequalities in income generation and distribution (Frenken and Schor 2017).
To generate working opportunities and employment: The sharing economy has been framed as a provider of flexible employment opportunities, based on short-term contracts, freelance work, and independent working supply (Horpedahl 2015). The possibility to convert a privately owned assets and skills into marketable goods can provide working opportunities particularly for those who would previously have been unemployed.
Provision of affordable goods and services: The development of a consumption model based on access over ownership can contribute to reduce the cost of goods and to provide affordable services such as transport and accommodation sectors. In addition, the use of Internet platform and the peer-to-peer review can also contribute to reduce the searching costs and to increase the overall savings (McLaren and Agyeman 2015; Stephany 2015).
- Social impacts:
To reduce the gender gap: By providing more flexible working options, the sharing economy can contribute to reduce the gender gap bypassing the potential barriers characterizing the formal work structures (IFC 2018; Schoenbaum 2018).
To increase social bonding, collaboration, and networking: Sharing one’s possession with others is generally perceived as a pro-social behavior contributing to improve solidarity and sense of community (Prothero et al. 2011). Most of the sharing activities, mainly based on solidarity and trust (see, e.g., car sharing and Couchsurfing), are also supposed to be able to generate social connection, intrapersonal relationships, and networking (Bauwens 2005; Belk 2010; Benkler 2017).
To change the traditional form of sharing: The use of Internet platform and the peer-to-peer review is contributing to extend the sharing activities from family and friends to people who do not know each other (Schor 2014).
To reduce the existing barriers between communities of society: The sharing activities taking place across communities of society can contribute to reduce social disparities by increasing trust and the sense of belonging to society (Benkler 2017; Fitzmaurice et al. 2016).
To increase democracy: The use of Internet platforms is contributing to generate e-democracy and to increase sociopolitical participation (Praharaj et al. 2017).
- Environmental impacts: Sharing economy has been framed as a sustainable alternative to the consumption model based on the private ownership of resources. Based on the use of the hidden capacity of “shareable goods,” defined by Benkler (2004) as goods that are not used by the owner for all the time, the sharing economy has the potential to improve the environmental standards by reducing pollution and consumption. The main environmental impacts can be summarized as:
To reduce the energy, the material demand, and the generation of pollution and waste: The development of a consumption model based on collaborative consumption, swapping, and reuse can contribute to reduce the overall production of goods, the related pollution, and the generation of waste (Shor and Wengronowitz 2017).
To reduce transport-related emissions: The development of a business model based on local proximity and community can contribute to reduce the transport-related emissions. In addition, the implementation of a car sharing system can reduce the consumption of fuel and the material and energy demand for the production of additional cars (Chen and Kockelman 2015; Nijland et al. 2015).
To promote sustainable development by encouraging reduced and “greener” forms of consumption and transportation (Botsman and Rogers 2010).
SDG and expected benefits of sharing activities
Sharing economy – expected benefits
Sharing economy has been framed as model able to increase income opportunities, redistribution, and wealth. Based on the use of Internet platforms, peer-to-peer exchange, and trade outside the traditional market systems, the sharing economy has been defined as a structure to empower individuals and to promote the development of micro-entrepreneurs. The economic and financial opportunities provided by sharing activities can also contribute to reduce poverty both between and within countries (Botsman and Rogers 2010; Sacks 2011; Stephany 2015)
The possibility to generate income from the use of underutilized assets and the provision of services taking place outside the market system can provide business opportunities for segments of population often excluded from the traditional job markets (ICF 2018; Schoenbaum 2018)
Decent work and economic growth
Based on the idea of freelance work and flexible employment opportunities, the sharing economy has been framed as a business model able to reduce the working constraints and to increase the opportunities for self-employment and independent contractors. The development of innovative business models alongside the persistence of the traditional market system is also considered as a structure able to increase income generation and growth (Horpedahl 2015)
Industry, innovation, and infrastructure
Innovation and technology are important factors of development. The recent expansion of Internet connection, personal computers, and mobile phone largely contributed to extend the sharing economy both in developed and developing countries. The use of sharing platform and the possibility to benefit from the sharing activities can contribute to expand the diffusion of information technologies, mobile phones, and personal computer devices (Belk 2014; Parente et al. 2018)
By providing opportunities for economic growth, innovative business models, and employment opportunities, the sharing economy has been framed as a model contributing to reduce the socioeconomic inequalities both between and within countries (Hamari et al. 2016; Kenney and Zysman 2016)
Sustainable city and communities
The development of activities based on sharing, local provision, and proximality can be functional to increase the socio-environmental sustainability of the urban environment. Within this context, sharing economy has been described as model able to increase personal relationships, sustainability, and trust. In addition, the consumption model based on the use, rather than ownerships, can contribute to reduce the environmental impacts of waste generation, production, and consumption particularly in urban environment (Prothero et al. 2011; Fitzmaurice, et al. 2016)
Responsible production and consumption
Environmentally friendly claims are reported by most of the companies involved in sharing activities. The ideas of reducing production and disrupting the unsustainable practice of hyper-consumption are considered as some of the main features characterizing the sharing activities (Martin 2016)
As reported above, sharing economy can contribute to reduce the environmental impacts of production and consumption. By providing consumers with the opportunity to use the excess capacity embedded into “shareable goods,” the sharing economy can contribute to optimize the use of assets and to reduce the pollution related to good production, consumption, and displacement (Acquier et al. 2017; Heinrichs 2013)
Sharing Economy: Risks and Constraints
SDG and risks of sharing economy practices
Sharing economy – expected benefits
Sharing economy can contribute to increase business activities, income generation, and growth. However, the benefits of sharing can be concentrated in the hands of few, as demonstrated by the creation of large monopolies as Kickstarter, Uber, Etsy, and Airbnb. The economies of scale and the network externalities characterizing the use of the Internet platform are presently reducing the market of small and local enterprise, with consequent impacts on income generation and redistribution. In addition, the lack of clear regulation on national and international taxation can contribute to increasing the accumulation of financial capital and to reduce the public resources generally used to reduce inequalities and social disparities (Murillo et al. 2017; Kasprowicz 2016)
The development of business models based on the use of spare time and resources could increase the workload of the female population in a context where family-care-related activities and activities taking place at home (such as Airbnb or Couchsurfing) are not considered by national accountability. In addition, some studies published, for example, by Edelman and Luca (2014), Cansoy and Schor (2017), and Ge et al. (2016) highlight that racial disparities have not been decreased by the development of sharing activities. On the contrary, Afro-American Airbnb and Afro-American Uber drivers resulted to be discriminated in terms of less guests and longer waiting time and cancellations
Decent work and economic growth
Based on the idea of freelance work and flexible employment opportunities, the sharing economy has been framed as a business model able to reduce the working constraints and to increase the opportunities for self-employment and independent contractors. The lack of pension and insurance, together with income instability and insecuriety are some of the main side effects generated by the working structure proposed by the sharing activities. At the present stage, the lack of proper regulations has generated working conditions generally classified not as decent as those characterizing the traditional working market (Carboni 2016)
Industry, innovation, and infrastructure
The lack of clear international regulations around the storage and management of the personal information collected through the platforms can generate privacy-related issues. In addition, the large availability of information related to consumer preferences can be used by companies to target advertising tailored promotions
At the present stage, the benefits of the sharing activities are not universally inclusive; on the contrary they tend to concentrate on certain groups of individuals. According to Stein (2015), for example, the additional revenue generated by sharing activities mainly benefits people with a middle- or upper-income level and excludes the low-income categories, with limited goods to share. In addition, the countryside or the remote areas result to have a reduce opportunity to share due to the lack of Internet coverage and low density of sharing activities. In addition, the difficulties that a relevant percentage of the world population is experiencing in using the information technologies (for income, cultural, and aging constraints) can contribute to generate an undemocratic system of asset provision
Sustainable city and communities
As reported above, the use of sharing activities does not seem to provide a major contribution in the creation of social bonds and collaboration. In addition, the increased affordability of goods and services and the creation of new markets can expand the volume of commerce with consequent impacts on hyper-consumption, waste generation, and pollution (Demailly and Novel 2014; Acquier et al. 2017)
Responsible production and consumption
Environmentally friendly claims are reported by most of the companies involved in sharing activities. However, the market-related structure and the for-profit dominated logic that characterizes most of the sharing activity generally contribute to expand the volume of commerce and to increase the pressure on environment (Martin 2016)
At the present stage, no clear evidence exists around the reduction of energy and material demand. On the contrary, the increasing affordability of goods and services and the expansion of market activity contribute to increase the consumption of natural resources together with the production of pollution and waste. In addition, the short-term and temporary use of the goods available in a sharing context generally leads to a lack of caring attitude and increases the turnover of the assets available in the market (Bocker and Meelen 2017; Wilhelms et al. 2017)
In addition to the possible risks reported above, the developing countries are also experiencing a set of constraints such as lack of assets and skills, lack of regulations and norms, inadequate technologies (such as Internet connection or electronic payment systems), and sociocultural disparities. All these elements, together with the negative impacts reported in Table 2, constitute a real barrier to the contribution that the sharing activities could generate on the implementation of the SDG. In addition, large varieties of socioeconomic and environmental conditions that characterize the vast panorama of developing countries make it difficult to identify common policies able to support a sustainable implementation of sharing practices. Up to now a very limited number of researches have been specifically oriented to examine the sharing economy in low-income contexts, and further analysis would be needed to investigate the possible impacts on developing trends (Retamal and Dominish 2017).
Sharing economy is a worldwide phenomenon. Based on the use of Internet platforms and on the access over the ownerships, the sharing economy is contributing to the development of alternative business models by introducing new way of connectivity and collaboration among people. According to this structure, the sharing economy has been generally framed as a possible solution to the negative impacts generated by the traditional market system. By promoting a more efficient and temporary use of resources, the sharing economy could potentially contribute to address some of the socioeconomic and environmental objectives reported in the SDGs. Despite these premises, however, the present structure of the sharing system involves large risks and constraints potentially able to generate inequalities, poverty, and conflicts. As reported above, the lack of clear regulations and the large variety of activities included under the umbrella of sharing could provide the base for a business model more unsustainable than the present one. In such a complex, diverse, and worldwide extended phenomenon, the balance of risks and opportunities is not an easy task. The implementation of specific policies, however, could contribute to improve the sharing practices and to align the sharing economy to the objective of the SDGs. Some of the most urgent interventions are related to the following areas: (i) to develop national and international regulations related to sharing practices, working conditions, and taxation; (ii) to support and consider the potential development of self-regulation, such as worker platforms for minimum wages or collaborative provisions among business activities; (iii) to promote inclusion through increasing Internet accessibility and literacy; (iv) to create a market and regulatory environment for the development of small and independent business activities and to break down the power of large monopolies; and (v) to develop programs of education to sensitize people around social and environmental problems related to discrimination, disparities, and hyper-consumption. These elements, among others, could contribute to shape and expand the sharing economy in respect to the individual and communities that are the constituting parts of the sharing philosophy. The potential benefits and risks related to the rapid expansion of this worldwide phenomenon should also be investigated by specific research oriented to investigate the possible impacts both in developed and developing countries.
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