The Current and Future State of the Sharing Economy

38 Pages Posted: 25 Sep 2017

See all articles by Niam Yaraghi

Niam Yaraghi

Governance Studies, The Brookings Institution; University of Connecticut - Department of Operations & Information Management

Shamika Ravi

Brookings Institution

Date Written: March 17, 2017

Abstract

This paper finds that the sharing economy is “the peer-to-peer based activity of obtaining, giving, or sharing access to good and services”. Alternative names for this phenomenon include gig economy, platform economy, access economy, and collaborative consumption. The sharing economy is estimated to grow from $14 billion in 2014 to $335 billion by 2025. This estimate is based on the rapid growth of Uber and Airbnb as indicative. Data shows that private vehicles go unused for 95 per cent of their lifetime. Together with the fact that there are fewer requirements to drive for Lyft, Ola and Uber than for a taxi company means greater supply of rides. Prices of shared services are also falling as indicated by Airbnb rates that are between 30 and 60 per cent cheaper than hotel rates around the world. More information shared on an online platform can lead to greater trust between users, but it can also lead to racial and gender bias. Sharing economy companies must work to combat bias on their platforms, both in their algorithms and their users. Removing some identifying information from profiles lowers risk of bias. It is difficult for any one company to form a monopoly since the cost for customers to switch between sharing economy services is quite low.

Suggested Citation

Yaraghi, Niam and Ravi, Shamika, The Current and Future State of the Sharing Economy (March 17, 2017). Available at SSRN: https://ssrn.com/abstract=3041207 or http://dx.doi.org/10.2139/ssrn.3041207

Niam Yaraghi

Governance Studies, The Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States
2027976238 (Phone)

HOME PAGE: http://www.brookings.edu/experts/yaraghin

University of Connecticut - Department of Operations & Information Management ( email )

368 Fairfield Road
Storrs, CT 06269-2041
United States

Shamika Ravi (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

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