How should the “sharing economy” be defined? Is Uber an example of the sharing economy?

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Q1. How should the “sharing economy” be defined? Is Uber an example of the sharing economy? 

Sharing economy is defined as an activity in which an individuals' acquire access to goods or services that are provided by its owner through online platform. According to Botsmans et al. (2013), it is defined as an economic model which focus on sharing under-utilised resources like spaces or skills for gaining monetary or non-monetary benefits in interest of a particular firm. Sharing economy is also known as peer economy in which peer to peer (P2P) based service is provided in an enterprise platform for collaborative consumption with the neighbours instead of depending on big companies (Hamari, Sjöklint, & Ukkonen 2016). The different forms of goods and services used for this purpose includes car, house, bicycle, staffing, as well as services like babysitting. With the rise in popularity of these services, people are inclined more to rent as well as borrow such facilities instead of owning and buying them.

One of the most important aspect of sharing economy is that it helps the individuals involved for gaining and monetize goods, which in-general are not being used fully by them. With the frequent use of social media like Facebook, Google, Twitter and applications of mobile phones, it becomes easier for the community members, to share data related to their unused good and possible services, for sharing with so-called customers. With the introduction of this facility, it becomes possible for an individual having less economy or bargaining power to take access of all kind of goods or services, without actually buying it (Daunoriene, Drakšaite, Snieška & Valodkiene 2015). In this context, the companies who provide customers with online access to goods and services, of other people instantly, are known as "access economy" or "on-demand economy". Therefore, it is the responsibility of the entrepreneur to create such platforms, assist quality service, and handle logistics related to delivery and agreements. Despite of all these benefits, it is clearly noticeable that the independent contractors of sharing economy adversely affects the economy of traditional brick and mortar business. Sharing economy frequently undercut costs through their self-designed terms and conditions and thereby

According to the give case scenario, Uber is considered as one of the best classic example of sharing economy by facilitating car sharing service. According to a survey report, most of the private vehicle remain unutilised for around 95 % of its lifetime.  Uber is the largest taxi firm across the globe and interestingly it has no car of its own; but a shared platform to continue business of shared economy. Uber has managed to create strong connection with both interested owner and borrower of cars (Lee, Chan, Balaji & Chong 2018). According to the CEO of Uber, Travis Kalanick, Uber is actually a technology platform which brings together both riders and drivers. Uber operates in more than 300 economically active cities worldwide and holds above $8 billion in the equity funding. With the help of technology and powerful engine, the company is able to become world's most valued firm in terms of sharing economy. It acts as a middle man by introducing a creative technology based on smartphone application where customer can connect to the drivers, anywhere and anytime as well as easily, making peer-to-peer transaction. In 2010, it has first launched its application in its home ground of San Francisco, which was founded by Travis Kalanick (tech entrepreneur). For this purpose, it has hired a computational neuroscientist, a rocket scientist, and nuclear physicist for developing algorithm for its application. The billion-dollar company do not consider the drivers as their employees rather consider them as independent contractors and provides flexibility to do part-time or full-time service (Daunoriene, et al., 2015). The company provide the facility for its customers to pay differently for different service level like Uber X (cost effective service), Uber Pool (shuttle service), Uber taxi (taxi or cab service) and Uber Black (high end sedan car service). Passengers can check the application and look at all the Uber cars available near to their location. Once the request is activated for a car, the passenger can view the booked Uber car's approach through the city map.  The fare of travel is calculated by the application by taking into account the shortest distance covered and time taken. Without being the owner of a single car, it has valued above $60 billion, which double the expected value of Hertz car Rental. Uber consider itself as a piece of software and tries to avoid laws related to insurance, taxes and fair wages. Unlike other taxi service providers, Uber does not operate within the local limit and do not abide by the rules related to operate in airport (Posen, 2015).

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