Sharing Economy can Improve Cities

Capitalism, with its many competitive aspects, is an unavoidable part of modern, urban life. With how universal competitive, free-market economy is, it is not without variations, and one of them, sharing economy is getting increasingly popular. To simply put, it is a term that refers to the method of creating mutual benefit by splitting assets, instead of individual ownership (Rinne, 2017). It is not uncommon to see it being practiced in rural areas but not so much in cities. When executed properly, it can lead to more efficient utilization of sources, diminishment of capitalism’s unsustainable effects on cities and encouraging local relationships. However, the practice also has its detractors, criticizing sharing economy for being uncontrolled, ineffective or inconsistent in execution. In this paper, I will argue that while the drawbacks should not be ignored, its benefits outweigh them and it is a useful way of improving rural areas.

One of the most obvious uses of sharing economy is sharing tools and utensils among the people living in the same area. As in, instead of seven households purchasing seven lawn mowers, they buy one and use it alternately. It may seem like an unimportant practice but it has significant effects on local economies in the long run. Vanessa Timmer, Executive Director of environment journal One Earth, reminds us that it is possible to put “the untapped social, economic, and environmental value of underutilized assets” into good use (2014). Tool libraries, places where people can borrow equipment and tools, are a good example of this since they reduce the spending of the local community and allow materials to be used more efficiently.

Sharing ideas, suggestions, and advice along with tools

Another, less direct impact of sharing economy is its potential to change the context around economic activities. Currently, most of the transactions in our life are highly impersonal, even though trading places used to be (and still is, in rural areas) places of socialization. As Sundararajan eloquently put into words in The Sharing Economy: “today’s digital technologies seem to be taking us back to familiar sharing behaviors” and sharing economy fits into our communal nature well (p. 5). Places, where local people have access to common assets, are ideal for people sharing ideas, suggestions, and advice along with tools. Economic interactions have a reputation of being devoid of emotion and sociality but sharing economy can change this and help people to strengthen their bonds with others whom they share a city with.

Sharing economy’s potential advantages are not limited to individuals and communities. It can also benefit to cities themselves. Most current economic models depend on heavy consumption and it does not just a threat for limited resources, it also produces a dangerous amount of waste. One of the reasons that mega-city Seoul decided to embrace the collaborative economy was the city’s consumption-based mindset leading to unmanageable amounts of trash (Johnson, 2014). A group of people from a city having access to the same materials instead of each buying the same individually decreases the overall consumption and therefore environmental impact of the city. Less consumption and more efficient use of materials also means less waste.

Limited scope and influence

Despite having significant support, the sharing economy is also subject to criticism. One of the main complaints against is its limited scope and influence. Being based on ‘peer-to-peer’ interaction, the collaborative economy does not have the direct economic impact of corporative business. While discussing the shortcomings of sharing economy, Malhotra and Van Alstyne, scholars from The University of North Carolina and Boston University respectively, they talk about how ineffective it can be even on personal budgets and remark that it covers “only marginal costs and leaving nothing for new skills, health care, or retirement” (p.25). The sharing economy can have a noticeable cumulative effect, but it has not reached the point of being sustainable by itself for most.

Digital platforms

The sharing economy also has problems with having a well-defined purpose or modus operandi, and it leads to questions about how actually socially beneficial it is. Some academics researching the topic point out that a lot of people use services like car-sharing simply because convenience or price, not because they are interested in the system’s socioeconomic outcomes (Barhi & Eckhardt, 2015). If users do not care about services and tools beyond accessing to them, a key part of sharing economy, creating communities, is lost.

Sharing economy is still not widely known but it is possible that most of us take part in it to some extent (a research reveals that over half of German consumers practiced collaborative economy in one way (p. 230)) and some of its less obvious effects are likely being ignored (Heinrichs, 2013). We know that it has capacity to be influential but currently, we only have a groundwork for an effective and widespread sharing economy. Despite having troubles with reaching its full potential and finding one, consistent voice, it still has tangible positive effects on urban places and their inhabitants. With more research and better communication between practices, solidarity economy can sustain bigger economies and large groups of people. By this way, actual sharing cities might be a reality.