Summary of The Sharing Economy

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The “sharing economy” – or “crowd-based capitalism” – is a technology-based revival of the person-to-person or peer-to-peer transactions that dominated economic activity before the Industrial Revolution. Today’s prominent online peer-to-peer platforms include Airbnb, car-ride services Lyft and Uber, and such financing platforms as Kickstarter and Kiva. Business professor Arun Sundararajan explains how social and commercial concerns drive these online transactions. His belief that the sharing economy’s impact is comparable to that of the Industrial Revolution may be debatable and he organizes his text somewhat haphazardly, but his narrative is perceptive and informative. getAbstract recommends this overview to readers seeking a detailed assessment of the sharing economy.

About the Author

Arun Sundararajan is a professor and Robert L. and Dale Atkins Rosen Faculty Fellow at New York University’s Stern School of Business. His Sharing Economy won a 2017 Axiom Best Business Books Award.

 

Summary

The “Sharing Economy” Emerges

Prior to the Industrial Revolution, person-to-person or peer-to-peer transactions dominated economic activity. Self-employed people made products and sold them to individual consumers. Even at the onset of the 20th century, the self-employed made up almost half the US labor force. Between 2010 and 2015, new companies emerged using online platforms in the sharing economy, also called “crowd-based capitalism.” The transparency of digital technology facilitates people’s ability to share and sell the unused capacity of their time, skills and assets. Five qualities distinguish companies in the sharing economy from other kinds of firms:

  1. The market is master – Most peer-to-peer companies are primarily market-based.
  2. Full-capacity focus – They make use of underutilized labor and assets.
  3. Decentralized networks – They create decentralized linkages among individual providers, as opposed to centralized institutional providers.
  4. Personal and professional – They combine the use of personal and professional abilities and traits.
  5. Contractual labor – They...

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