when the economy learns to share

The sharing economy is the concept in which people pool their unused capital to maximize profit and minimize waste. Resources are shared so that they are utilized to their full potential, and money is saved because each individual doesn’t have to purchase the capital for himself. However, some disagree with the premise of many of the new sharing companies such as Airbnb, Lyft, Postmates, and Uber, whose primary, sole goal is to maximize profits. Ideally, the goal of the sharing economy is to minimize consumption and waste for the good of the whole, but such models are difficult because they require donations/volunteers and have no incentives to offer.

This is an interesting and brilliant idea- the sharing economy- but it seems that it faces the challenge of sustainability. An economy based on morals over money seems exactly the opposite of the traditional business world. Although waste is decreased and profits are increased, there are risks and downsides involved. The primary risk is that you depend on the honesty of all participants- it would be easy for someone to take advantage in a sharing situation. The downfall is that in some cases one has to turn down opportunities for additional profit in order to share with someone else.

This is a relevant issue, and it is what sets apart the two types of “sharing” companies. Both have a commodity that is not being used to its full capacity. One would assume that this means that there is no opportunity cost in donating it to someone else- the thing is not being used, so they might as well let it benefit someone else. The companies like Uber, however, don’t seek to benefit others by sharing with them, but seek to make the profit that would normally be lost by the unused item. It can benefit others- but at a cost. Technically, these companies still minimize waste and consumption as a secondary goal, but the primary goal of profit overshadows this endeavor because it completely changes the choices made by the business.

If sharing is used correctly, the factors of production- labor, human capital, natural resources/land, capital- can all be considered sharable commodities, meaning that the limited ability to produce based on capital is not quite as limited. This is especially beneficial because more people can produce for the same cost as one if all have similar goals. The sharing economy has obstacles to overcome, but if it is optimized, it could make the economy more efficient.