The phenomenon called collaborative consumption, first hit the scene in the mid 2000s. This peer-to-peer model encourages travelers to be thrifty and includes the practices of bartering, swapping, lending and exchange.Due to the technological advancements being made in recent years, more people are able to participate in the sharing economy all around the world, and on a larger scale.
The sharing economy gives travelers access to services and goods, instead of affording them the opportunity to own these goods or services. This is the main component of this economy model. Those who are tourist benefit from getting affordable accommodation, as well as travel advise from the locals, and free or budget-friendly transportation. This economic model also affords people the right to travel to places they may not have been able to afford previously and gives people direct access to locals who can provide pointers and advice for traveling the city. A local can provide a traveler with a first-hand list of the best places to shop or eat, and give advice about the best parts of town to visit.
The Shared Economy and The Financial Crisis
After the economy took a nosedive in 2007/2008, consumers started defaulting on their debts after thousands of them got laid off. Debt collectors were chasing them and trying to squeeze anything they can get. So people needed to spend much less money in order to try to maintain economic stability. Some people just couldn’t bear it anymore and they had to get rid of debt collectors by filing suits in court for harassment and other forms of unfair debt collection practices.
This is a stark contrast to the over consumption that was common in the global economy before the crisis. It quickly gained popularity, since the traveling population and the service population were able to combine in order to meet each other’s interests.
Cultural and Global Issues
There are both global and cultural issues to consider when participating in the sharing economy. For instance, in developing countries where many of the consumers are of the middle class, the citizens of these areas are likely trying to make significant purchases, such as cars or household goods.
They may still be focused on savings, so they also hunt for bargains even when they shop online. Due in part to this, online penny auction sites like Dealdash rapidly gained popularity.
Rachel Botsman, the coauthor of What’s Mine Is Yours: The Rise of Collaborative Consumption (2010), states that there are benefits that contribute to the success of the sharing economy. They are:
- Value: The sharing economy allows locals to get paid for extending their homes and resources to travelers. Users pay competitive yet affordable prices for these services.
- Use of Under-utilized Resources: Travelers are able to use a spare room or vehicle that a local has, which offsets the cost of travel for the vacationer and ensures that the product or service is used productively.
Some Downsides To Consider
Unfortunately, there are some drawbacks to the sharing economy also. One issue is that there is little rural sharing. This indicates that the sharing economy is largely an urban concept, and that rural locals aren’t able to participate as readily because they are farther away from the city’s attractions. There are also legal components involved.
In many cases, sharing economy businesses don’t meet the legal regulations such as zoning for the city and hospitality tax requirements. This could cause problems for travelers and local consumers down the line. In this case, their best option for still saving money in their purchases, is to buy online and use services like Dealdash where people are getting items for very low prices — sometimes even just for pennies when the original prices are worth hundreds of dollars!
Fortunately, there are plenty of opportunities for the sharing economy to keep growing. One of the ways this economy will thrive is through the formation of niche markets. Through a number of specific sharing sites that feature traveling preferences such as vacationing on a farm on staying on someone’s couch, locals are able to effectively market their services. It is also projected that business travel with be next when it comes to the sharing economy. This will offer more options to those who have to be on the road often for work-related reasons.
As the reputation of the sharing economy continues to improve, larger companies and corporations may partner with certain local organizations to provide mainstreaming and investment opportunities. This can help to improve the overall perception of the sharing economy, and can give the concept a more professional reputation.
Industrial Action and Safety Concerns
Even with all the potential and established benefits of the shared economy, there are still some concerns to keep in mind. For instance, the Uber protest in Europe is a reminder that acceptable working conditions and safety for passengers and drivers should be a priority in the sharing economy. Travelers should also consider that it may be difficult and sometimes impossible to ensure that health and safety regulations are being met in the homes of locals. Personal insurance for travelers is always a sound idea.
Overall, the shared economy allows for vacationers to see the world in a fun and exciting way, without spending a fortune. Proper organization and vacation planning can assist in the future success of the sharing economy.