Does the Sharing Economy Really Promise Sharing?

In these quarantine days we live under the influence of a pandemic, all humanity goes through a different experience. In many countries, the vast majority of people have been spending time in their homes under quarantine for weeks as never before. We live in a period where consumption and production decrease globally, life slows down, and the planet can breathe to some extent. However, while people are trying to protect their health, they are also worried that they will still have a job at the end of this period, when they do not know how long it will take.

In this process, where institutions, companies and individuals question the way they do business in every sense, their habits, and their usual norms and patterns, structures that have previously adapted their business models to digital streams create advantages by adapting to “work from home” more quickly. However, the struggle for life gains completely different dimensions for the production sectors and those who have to work in the field. Businesses that adapt themselves quickly to changing needs can survive, but it is clear that there are not many easy days for those trying to maintain their traditional business models.

In the upcoming periods, very important changes will be made in the structures of supply chains, the number of intermediaries will decrease or disappear completely, direct sales from the manufacturer to the consumer will begin. Many more local, small-scale distribution and supply systems will probably be on the agenda.

Stimulus Packages Will Be Implemented In A Wide Range

It is also controversial that the packages of measures by states and central authorities and efforts to intervene in this period will bring much greater difficulties in terms of economy in the future. In today’s crisis, where there is a complete shut-down, governments and central banks are aiming to apply their stimulus packages not only to financial institutions but also to a wide range of businesses, from small businesses to giant airline companies that are forced to shut down.  However, it is also estimated that interventions in these institutions, whose revenues will be severely reduced due to consumption coming to a standstill in certain sectors, will not be sustainable. As a result, we are moving towards a period when major bankruptcies can occur. This unfortunately means a serious unemployment dimension. At this point, we see that many states will start direct monthly cash aids to their citizens to meet their basic needs.

The epidemic actually seems to accelerate the transition towards a sharing trend that is the philosophy of the new generation to look at life rather than the materialist and possessive worldview.

Sharing will increase in every way. Remaining monthly internet usage capacities,  electricity capacities left over from our consumption can be shared peer to peer over the network, experience sharing, donations, aids will gain importance. Of course, these structures are not easy to build under the concept of “sharing economy”, which entered our lives especially after the 2008 crisis, where new business areas were created, and low-income masses can find alternatives and get involved.

The sharing economy model, which came into our lives by presenting an argument against the traditional capital and physical asset-based business model, has evolved into a model that’s charging high commissions to the service provider, and prioritizing the users who are paying to access for certain goods and services. Thus, the concept of the sharing economy evolved into an “Access economy” concept, changing from broad participation and sustainability arguments to digital market-place centers serving the interests of capitalist venture capital.

Discussing Marketplaces

Through these platforms, the negative effects of the non-observance of the rights of the service providers, and effects on other business lines and markets in their fields of activity began to be discussed.In order to meet the high brokerage commissions, landlords started to make short-term leases with high rental prices, this time long-term leasing opportunities narrowed. This has started to put upward pressure on rental prices in certain regions. On the other hand, the credibility and reliability of the algorithm models embedded in these platforms were also highly questioned. The accuracy of the comments, feedbacks, ratings and whether they were made by real persons has been and continues to be the subject of debate.

So why do we need these platforms? What function do they undertake other than mediating to bring the service provider and the service space together?

Of course, in order to provide the necessary “trust”  for a virtual exchange environment of parties who do not know each other. These brokerage services are naturally paid for certain costs, fees and commissions. For this, platforms make technological improvements such as user-friendly applications, easy access, fast payment and collection integrations, customization and algorithms for scoring systems.

How right is it for us to bear these costs only to provide “trust” to these agents, and to voluntarily share our information, even though they are not committed by themselves to ensure their safety in any way?

It is now necessary to replace the central platforms and technological marketplace empires over the mountains of users data with robust and distributed structures.

Blockchain Will Stand Out

Transparent decentralized structures created by blockchain or distributed ledger technologies that will not compromise the privacy of user information, will shape the future. The Italian Red Cross, who started collecting donations with Bitcoin over the HelperBit platform last month is already a meaningful example of this. Because in the Bitcoin blockchain with an open ledger structure, it is possible to monitor that the donations collected are transparently transferred to which wallets, even anonymously. This provides reliability and credibility to the system. In models that are structured with smart contracts, both these donations will be released if certain conditions are met, and a purposeful use will be confirmed. Smart contracts will be common in our lives, not only in the distribution of donations and grants, but also as codes that provide the legal basis for any trade or exchange between parties that do not know each other.

However, the confidence factor in blockchain also has its limitations. If a person makes incorrect data entry to the system, blockchain will record it immutably and will confirm that the entries have been checked. But it will not be able to verify the accuracy of the information by its very nature. Blockchain promises an infrastructure for trust; not for verification of the truth. There are different infrastructures, systems and processes in place to ensure that information is accurate and truthful. These problems can be solved with integrated systems that can communicate with different databases, infrastructures that will flow information from IoT devices and sensors, and multiple data validation systems.

As digital technologies grow in our lives in the future, both habits and needs will shape the usage practices of technology.Blockchain and distributed database systems with low cost structures that eliminate the middlemen will challenge central platforms.