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How The Sharing Economy May Impact Your Business

the sharing economy

Forbes defines the sharing economy as one in which owners rent out something that they aren't using - such as a car, house or bike. One of the most well-known services in the world is ride-sharing app Uber, a service that connects willing drivers with people who need rides. Other options offer chef-to-door dining services, overnight accommodations and more. Since coming into the public spotlight, the shared economy has garnered praise, criticism and a heap of attention. How will it affect your business? 

Uber protests rattle France

Recently, mayhem erupted in France as cab drivers gathered to protest Uber. The New York Times reported that many furious drivers attacked drivers, blocked the roads and destroyed property to show their disdain for the car-sharing service. 

Paris is the stage for one of the many protests that have unfurled across the world over the past year. This protest is a prime example of some of the drawbacks of a shared economy, underscoring frustrations that are felt by people in the food and beverage and hospitality industry.

The dark side of the shared economy

The Guardian pointed out that the downside of the shared economy has gotten far less attention than the benefits, some of which were underscored by the publication. 

  • Tourists who stay in hotels, use taxis and perform other services are important streams of tax revenue. Most shared economy services, namely Uber, have found a loophole to paying taxes, which means they're a money pit for a city as a whole. 
  • The issue of safety is no stranger to anyone who's heard of shared services like Airbnb. As The Guardian explained, hotels are typically inspected and regulated. However, many of alternative sources are not. 
  • Communities have to deal with disruptions from these services. For example, someone might unwillingly have to live next to an Airbnb residence, which may not be what he or she signed up for when moving to the neighborhood. 

Not to mention, when protests become as radical as the ones in France, they take away from anyone who lives in the area - big and small businesses. People inevitably get stuck in traffic and arrive to work late and frazzled. In the same vein, these services take people from the employment pool, which often means fewer qualified candidates might apply to work for you. Many services like Uber allow employees to create their own schedules and make money at their leisure. It's nearly impossible to compete with that type of flexibility. 

The perks of a shared economy

Despite this drawbacks, it's important to take note of the bright side of a shared economy - not all aspects are negative. Small businesses can potentially reap the benefits of this emerging market. Here are a few examples of the sharing economy supporting small business. 

  • As The Economist pointed out, having a shared economy can encourage people to try new services or products, which can work in your favor if you offer similar options.
  • Enterprises can capitalize on these affordable services for business trips. Small businesses are able to cut costs by using Airbnb and Uber instead of paying steep prices for accommodations and travel. 
  • Shared economies can serve as inspiration for smaller businesses. 

Finding the balance

It's to be seen whether people will rebel against these services to a point where they're discontinued or if they'll continue to blossom. In the mean time, why not revel in the benefits? Keep the pitfalls in mind so that you can work around them.

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