Sharing Economy: Understanding, Concepts, Strengths and Weaknesses

Every economic action taken in business must be able to digest every form of small problems to the most complex problems, such as taking monetary policy, income distribution, and other economic problems. One other thing that must always be remembered is to apply the sharing economy in doing business.

Sharing economy is an act of modernization of collaborative consumption . This is done in order to be able to provide access to all resources owned by the company that can be consumed or shared with other users.

So, this sharing economy action is able to help increase enthusiasm in running a business, because business people can take various resource efficiency actions by consuming together with other users.

Currently, there are many examples of the sharing economy implemented by large companies, for example, startup companies that rely on technology on smartphones, such as applications such as Gojek, Grabbike, Airbnb, etc.

These companies use the sharing economy system as a basis for achieving investors’ investment goals in order to provide higher returns in the future. Well, to find out more about the sharing economy, let’s discuss it in-depth below:


1 Definition Sharing Economy
2 History Sharing Economy

2.1 French Revolution
2.2 Modern Economic Era
2.3 The Modern Era: The Internet and the Birth of the Digital Economy
3 Development Sharing Economy
4 Draft Sharing Economy
Advantages and Disadvantages of Sharing Economy

Understanding Sharing Economy

In the business world in the digital era as it is today, the sharing economy is often translated into a peer to peer-based activity or known as P2P. The main goal is for companies to share access to a product that is facilitated by a digital platform on a community basis.

The business concept carried out with the sharing economy approach is actually not much different from the Gig Economy. The difference is only in the use of the digital platform in it.

The main benefit of this sharing economy activity is to increase enthusiasm in carrying out various consumptive resource efficiency actions simultaneously and minimize the possibility of bad risks that can have an impact on the environment due to uncontrolled consumption.

However, in the implementation process, the company is still expected to be able to save the entire budget that has been prepared.

History of Sharing Economy

Basically, the world has experienced various economic systems. Starting from the economic system after the French revolution, to the modern economic era as it is today. Then, comes the concept of a sharing economy, where someone in it can be a consumer and a producer at the same time.

French Revolution

In the mid 1700s until the early 1800s, the birth of the French revolution was able to change the history and lifestyle of the world’s people. This was driven by the existence of the economic level of the French people which did not provide any improvement so that a very large movement arose at that time.

Broadly speaking, the changes that occurred were changing the face of an absolute monarchy, which at that time was led by King Louis XVI into a more absolute head of state government.

The French Revolution showed how very strong the power of the people with a 98% majority was to be able to fight against the authoritarian monarchy which was only 2% in controlling and taking every government policy.

The result can be seen in the fall of the monarchy and turn France into a democracy.

Modern Economic Era

For now, macroeconomic conditions are actually almost the same as the French Pre-Revolution era. In terms of economy, only a few groups of entrepreneurs are actually able to enjoy the benefits of the modern economic system.

The modern economic system teaches that the company must only be able to provide welfare to its shareholders. With a justification or justification that the higher the level of risk, the greater the income or profit.

A certain group of groups take advantage of the modern economic system only to enrich themselves.

The Modern Era: The Internet and the Birth of the Digital Economy

In the early 2000s, the Internet began to become an inseparable part of human life. Although it was first created in 1962 and only needed for the defense purposes of the United States, internet travel is very important to be able to give birth to a digital-based economic system.

In simple terms, the sharing economy is able to cut human needs to the needs that humans need without having to buy a product or service to meet these needs.

With the internet, everyone can be met based on supply and demand. Of course, this can maximize the utilization of assets so that nothing is wasted.

Sharing Economy Development

Currently, the development of the sharing economy has occurred very quickly in recent years. The results of these developments can be seen from the presence of various types of online or digital transactions. In fact, the sharing economy currently refers to business-to-business or B2B interaction activities.

In addition, the development of the sharing economy can also be seen from the many economic platforms that have joined, such as coworking platforms, peer-to-peer lending platforms, freelance platforms, mode platforms, etc.

The coworking platform itself is a company that is present by providing a sharing economy by providing an open space with freelancers, businessmen, and employees who can do their work at home.

On the other hand, Peer To Peer Lending Platform is a company that can help everyone to lend money to other companies with lower interest rates and relatively transparent terms.

While the Fashion Platform is a site that can help someone to sell or rent a design and also clothes. Finally, the Freelance Platform is a site that helps freelancers to find work projects in a wider spectrum.

Apart from these platforms, currently the concept of the sharing economy has also touched on leasing business activities. An example is the Airbnb company where every member in it can rent a room or house that they really want.

Draft Sharing Economy

The most important point of the sharing economy concept is that all members in it can share with each other. Businesses run with this concept must have a high level of trust and reputation. Apart from that, a high level of legality and transparency is also needed.

In order to compete by embedding this concept, 3 main concepts are needed, namely real sharing, gift sharing, and also pseudo sharing.

Real sharing is a concept for the platform to be able to provide various conveniences for each user to be able to contribute and also share knowledge voluntarily. On the other hand, the concept of gift sharing is a concept that is needed to be able to share products or services so that later others can reply to them in the future.

Meanwhile, the pseudo-sharing concept is a very suitable method to be able to summarize the sharing economy that is currently happening.

Advantages and Disadvantages of Sharing Economy

As previously explained, the sharing economy concept will allow each individual to be a producer and a consumer at the same time, and this changes a new color in the business world. The internet is used as a good medium to be able to apply this concept.

The main advantage of the sharing economy is that it is able to have a positive influence on the wider community. There are so many people who claim to be satisfied because they make transactions with the digital world because that way everything can become easier.

In the future, consumers will also benefit from the speed in meeting their needs, the many choices, and the far more competitive prices. Cheaper prices can be given because usually, the provider of the goods or services is a small entrepreneur who has lower costs than large companies.

Even so, the drawback of this sharing economy is that an economic model based on the technology will always clash with government regulations. This also happens all over the world, the existence of taxes, permits, etc., often causes riots that lead to mass demonstrations.

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