Why Social Media is necessary for the Sharing Economy

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Sharing is caring. In the 21st-century, sharing via social media such as Facebook and Twitter is what we do best. Recommending things online has given rise to the ‘sharing economy’ over the last decade.

What is the Sharing Economy?

Would you rent out your car, a laptop or a room in your house to a stranger via a website on the Internet? That is what many people are now doing online. The Sharing Economy includes the online sharing of goods, transportation and services.

Does the sharing economy work for me? Absolutely! If I want to book accommodation when I am travelling, I log on to AirBnB where I can see a variety of rooms for rent in locations all over the world. If I want to move house, I book a van on Anyvan.com. The best thing about these websites is that everything has been reviewed and I feel that I can trust previous people’s testimonies. Welcome to the sharing economy.

Sharing Economy

The Sharing Economy also includes financial sharing. Kickstarter and Indiegogo are examples of crowd-funding platforms where people can fund businesses and startup projects. My boyfriend recently funded a ‘Ghost Busters Board game’ on Kickstarter. As you would expect, we are now counting down until the first ever version arrives in October, complete with Slimer! These crowd-funding sites also come under the umbrella of the ‘Sharing Economy’.

How has Social Media fuelled the Sharing Economy?

The sharing economy is reliant upon valid reviews, therefore social media is necessary for the sharing economy. In the early stages of social media, many people hid behind aliases. Yet social media sites are now moving towards verifying identity online and this is crucial to accepting people’s opinions online and believing reviews.

On Linked In, it is almost impossible to hide behind an alias, because the platform offers an online CV through which you can be recruited for jobs and projects or positions. We certainly take someones word when we can clearly see that they are in a professional and responsible role.

Facebook is becoming the  ‘go to’ area for recommendations. If your Facebook friend recommends something, you are much more likely to believe them rather than a paid advert. Facebook has recently taken verification one step further, by requiring ID if you want to advertise.

As people become more transparent online, it is apparent that honesty is the best policy. This honest approach to our online accounts is what fuels the sharing economy because we feel that we are following up on recommendations from reliable sources and those we trust.

What are the Advantages of the Sharing Economy?

A collaborative or sharing economy makes it easy to rent something out to a stranger online. It keeps the costs down to the person with the assets and makes it easy to the person who would like to rent what they need. For example, on a Snapgoods you can rent pretty much anything from a laptop to a saxophone!

Are there any Disadvantages to a Sharing Economy?

Despite the numerous advantages of the sharing economy for business owners and consumers, there are also disadvantages that may question its sustainability.

The key problem with these easy to use collaborative consumption websites is that they make business difficult to trace and monitor. Will it put traditional companies out of business? Are there corrupt business owners renting rooms our on AirBnB without paying taxes? And then there is the morbid issues of death – do these online sharing website check that the owners of the goods and services are actually ‘still alive’?!

Many legal problems can arise from a sharing or collaborative economy. Indeed, business should declare their taxes and make sure that they develop an ‘online will’. Is the sharing economy sustainable?

The sharing economy certainly is a cost effective way of running a business. Although it will cause a shift in consumerism, I don’t believe that it will ever completely eradicate the need for face to face business.

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