4 factors holding back the development of a sharing economy

The sharing economy philosophy posits that access trumps ownership. But is mere access the best solution for all? Since first rising to prominence, the sharing economy has been clouded with controversy pertaining to safety, accountability, regulations and jobs.

In spite of passionate think-pieces, riotous demonstrations, and fierce legislation, the sharing economy continues to thrive, proving that unless one has a special conviction to fight against the likes of Uber and Bunz, people are going to use what is most cost-efficient and convenient.

One of the foremost appeals of sharing is productivity. By opting to share, you can make use of items that would otherwise be gathering dust and profit off of them by getting something that you need in return.

As a result of this, it’s no surprise that sharing is making its way into mainstream culture and even upcoming condo developments. Peer-to-peer commerce makes money for owners and saves money for borrowers. After all, why pay regular price for something that you only need for a limited time when you can borrow it for significantly less money or trade it for something that you no longer use?

Though the question is simple, the answer is polarizing. Despite being friendly to both your wallet and your watch, the sharing economy still remains under fire. Here’s why:

1) Safety issues

Without a middleman or third party enforcing strict regulations, sharing can present some serious safety risks. For example, where hotels are inspected on a daily basis to ensure they aren’t posing a danger for guests, Airbnb, a popular home-sharing network, faces no such inspection. Furthermore, guests face limited screening, putting both hosts and their neighbours at risk.

2) Little to no accountability

Sharing apps and websites only act as ‘matchmakers’ per se and most inform you of the risks beforehand. So should something go wrong, there is a lack of accountability on the sharing network’s part because you are using their services at your own risk. The item or service that you trade for or buy could be faulty or not as advertised and there is no one you can turn to for a fair resolution.

3) It’s difficult to regulate

Just because sharing is done under the table, does that place it out of reach of the law? Though some people don’t care whether or not the government profits off of sharing, others are impassioned by the alleged injustice that the sharing industry perpetuates.

Since sharing is done on a peer-to-peer basis, users and hosts can evade government fees. For example, Airbnb users are not required to pay hotel taxes, even though they are essentially partaking in the hotel business. And Uber is basically a taxi service, but they don’t abide by the same bylaws.  

Ultimately, a significant portion of the controversy surrounding sharing has been due to the fact that sharing exempts entire sects of business from pricey taxes and regulations just because their services are provided online and more or less managed by users.

4) Jobs are at risk

For avid Uber users, the days of hailing a cab are over. Though that means cheaper, faster rides for users, what does that mean for taxi drivers? Many cities impose restrictions on the number of cabs on the road in hopes of securing income for all drivers, but with Uber and related services on the road as well, it jeopardizes drivers’ income, as with other industries.

That said, should a government prevent growth of the sharing economy just because it may cause other industries to fail, or is it the responsibility of those failing industries to innovate and compete in order to survive?  

Whether you see it as a trend or an authentic way of life with staying power, the past couple years have cemented the sharing economy as a viable alternative to several dominant businesses. The sharing economy is becoming stronger and only time will tell to see how the Greater Toronto Area and other major urban centres around the world adapt.