Is sharing economy sustainable?

Organizations based on the sharing economy concept are popping up left, right and center. But are these organizations profitable? If yes, is this profit sustainable? These kind of questions can’t be answered yet, since the business model is quite new (started emerging in the early 2000s). But it is quite interesting to do a little research regarding these questions.

The business model sharing economy aims to let people share resources, for a lower price than buying/hiring something new or from competitors. Traditional businesses like yellow-cab taxi drivers are slowly being replaced by individual Uber drivers. Unfortunately Uber is privately owned, so financial flows are not published. Rumors claim that Uber is making losses, but with a 7 billion investment from VC’s and individuals they are definitely sustainable for a long time (Millard, 2016). Sharing economy is all about mass, the parties (Customer and seller) are complementary to each other and it will result in more profit if more people participate. The more people that are willing to share their resources the more people are attracted and are willing to make use of the resources and vice versa (Kaldenberg, 2015). Therefore many sharing economy platforms are currently focusing on growth that will often lead to a higher profit. But what if everyone is going to make use of the sharing economy? This will also have negative consequences for the sustainability of the environment. If more people use Airbnb instead of hotels, people might travel more and therefore increase emission per traveler. And if more people tend to use Uber instead of public transport the emission per traveler will also rise. You can also argue if people share their resources a household will buy less stuff and therefore a household will save money and there will be less waste (Johnson, 2014). I came across a platform that I found very interesting, the platform is called Parking panda, and it allows people to book & share parking spaces.

Usually parking spaces in a busy city are relatively hard to find, moreover the parking lots are often very expensive. With parking panda you can reserve a parking spot in advance for a lower price than regular parking lots and garages. I personally find this idea very sustainable, not only as a platform but also as a way to reduce emission. People that are looking for parking spot usually ride around in circles wasting a lot of time and gasoline. With parking panda a parking spot is guaranteed and you can avoid wasting time and money looking for a parking spot. They can actually guarantee the parking spot that you reserved, by partnering up with tow truck drivers that patrol the area. The platform is currently active in 40 cities spread across the United states, with over 500.000 parking spots available. Parking panda doesn’t own any of the parking spaces, but partners up with different locations in order to create a lot of availability. The vision of Parking panda is making parking painless and inexpensive. A very simple and handy platform, in my opinion a platform that is definitely sustainable and reduces emission at the same time.