The sharing economy is one of the business models whose growth is relatively fast and has a significant impact. Its presence can disrupt the old business model and become a competitor to be reckoned with
Even so, this trend is not a new thing. Thanks to the internet and other technologies that make transactions easier, its development is accelerating. For some people, this trend still sounds foreign, even though it has been used for a long time.
So, what is the sharing economy? How does it work? Check out the explanation below!
What is Sharing Economy?
This economic model does have many meanings but simply put; it is a peer-to-peer (P2P) based activity where assets and services are shared between private individuals. This model is used to exchange access to goods or services between two or more parties.
There are three derivatives of different business models from the sharing economy, which many companies apply. The first is Real Sharing. An example is the Wikipedia website, where users can seek and share knowledge voluntarily.
The second concept is Gift Giving, which aims to share products or services in the hope that others will reciprocate. For example, there are many open-source websites where programmers can code for free.
The third concept is Pseudo Sharing, which is said to be the most appropriate concept in summarizing the current sharing economy. Every business trend has its advantages and disadvantages.
This concept’s advantage is that it positively impacts the wider community, where many parties claim to be satisfied because they can transact digitally. Besides that, it benefits from the speed of meeting needs, as well as the many choices and more competitive prices.
Besides, there are drawbacks to this concept, where technology will collide with government regulations. This is not only happening in Indonesia but also throughout the world, where the existence of permits and taxes can cause chaos which leads to mass demonstrations.
This business trend is often considered the easiest way out of economic problems because you don’t need a certificate of ownership but can still take advantage of its facilities.
How Does the Sharing Economy Disrupt the Conventional Hospitality Industry?
One of the victims of the hotel industry disruption is the giant British travel company, Thomas Cook. Thomas Cook is the oldest travel company in the world in a state of bankruptcy, leaving more than 150 thousand consumers stranded in various countries waiting for certainty of when to go home and hotel payments. Including their tourists in Bali.
Thomas Cook has 22 thousand employees, working with 100 airlines worldwide, 200 hotel and resort owners in 47 destinations, and up to 19 million customers worldwide. Several factors caused the company to be disrupted, namely an inefficient business model, one of which was creating its airline.
In principle, the existence of a sharing economy benefits business actors so that they do not only have complete control over an item. That is why various online platforms for selling tickets to room rentals were born, such as Airbnb.
Many companies have taken advantage of this trend, one of which is the conventional hospitality industry. However, the government needs to regulate this economic model, even though many traditional accommodation and hotel service providers have wanted to use the trend.
Many parties have asked the government to make regulations that can regulate the sharing economy system. If the government has made these regulations, many service providers will have shifted to this economic model because there are various advantages.
One of them is that the costs incurred are cheaper when compared to setting up a hotel directly and that setting up a hotel requires more requirements. But if you use the sharing economy model, even one room in a room can be used as lodging.
Overall, it’s not only the hotel sector that takes advantage of this economic model, as with the Gojek. It has already implemented this economic model and is successful because it has established many branches in other countries.
To deal with this trend, entrepreneurs need to be able to see gaps and opportunities to be able to respond to the challenges of the times. You can use business management consulting services to present solutions that suit your business needs.
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