The concept of the “sharing economy” has become the latest buzzword. But do we really understand what it is and how it works? Let’s take a quick look at how the sharing economy works.
It all started with sharing between friends, family, and neighbors, such as car-sharing or carpooling. Over time, the concept of sharing then transformed from a community practice into a profitable peer-to-peer business model. Most notable examples include platforms such as Airbnb, Grab, Kwikcar and more. Thus, the rise of the sharing economy is not just about creating enormous amounts of wealth, but it also helps our environment by increasing resource efficiency and reducing environmental burdens.
#1 Flexibility & Efficiency
By using online platforms to connect consumers with suppliers, sharing-economy services are able to yield greater efficiency than traditional business models. Assets like cars and rooms can be rented out when they are vacant. This scenario is more favorable, unlike taxis and hotels that often spend most of their time struggling to find their next customer. Most importantly, it is cheaper to share a car or room compared to purchasing a brand new car or staying in a hotel. You can also share out your available car or room to earn some side income. Therefore, consumers are able to access goods and services only for as long as they are needed, thus yielding greater efficiency for service providers.
#2 Emissions Reduction
The transportation sector is one of the largest contributors to greenhouse gases (42%) with the highest potential to be reduced. Emissions can be easily reduced through the combined use of public transportation, bicycling, and car-sharing or e-hailing services. Car-sharing services like Kwikcar, where people share or rent a car for short-distance travel within the city, could lead to emissions reductions by reducing the number of cars on the road leading to less carbon dioxide emissions as a whole.
Shared accommodation platforms like Airbnb also lead to lower emissions. These private properties consume less energy compared to energy-intensive facilities like restaurants, bars, 24-hour operations, and more. Hence, it could eventually reduce the demand for new hotels, and avoid emissions from the construction and production process.
#3 Resource Optimization
Reuse and recirculation of unused resources can help in optimizing our resources. One of the best examples that can be used to explain this concept is shared-parking spaces. Platforms or apps such as ParkEasy and ParkIt help existing car owners to share available parking spaces to those who need one – thus efficiently using available resources to solve parking problems and improve city life. (And we all know how painful it is to look for parking!)
Another good example would be ride-sharing. Purchasing or owning a vehicle is no longer a must. There are other alternatives one can consider: request an e-hailing ride, share a ride, or grab a bike nearby. Following the reduction of driving private cars and car production, the sharing economy thus indirectly encourages vehicular usage.
Did we enlighten you about the benefits of the sharing economy? We sure hope so.
Help keep the Earth green by sharing more with each other!