The sharing economy is famous for utilizing innovative technologies to rethink conventional business models. Despite being a relatively new industry, the sharing economy has already started to out-compete traditional companies, like taxis and hotel corporations.
The industry has also proven extremely agile, as entrepreneurs are willing and able to continually incorporate new technologies into their services, like cryptocurrencies and blockchain.
However, companies that were once startups have now been around long enough that they’ve grown out of their adolescent mindset. Companies like Uber and Airbnb have grown from small, agile startups into giants in the sharing economy.
It isn’t clear if the period of rapid replacement in the sharing economy is over. Will the entire industry undergo a similar shift, with the most successful platform giants forever outcompeting smaller firms?
Case Study: Social Media
Remember Myspace? Friendster? No one talks about these networks much anymore, but they used to be household names in the early days of social media. More recently, Vine, a video-focused platform popular among teens, was closed down. However, Facebook, Instagram, Twitter, and LinkedIn all seem to have staying power. Indeed, they are the most visited and regularly used social platforms in the United States.
Their place in the digital pantheon doesn’t show signs of slipping, and for good reason – they’re huge, profitable, and provide their users with much utility.
Facebook, in particular, has grown so huge that other mobile apps use it as verification of a user’s identity. The mobile dating apps Bumble and Tinder require that a user link their Facebook account to open a profile on the app. These networks act like octopi – whose tentacles reach into other parts of our digital lives.
The Future Of The Sharing Industry
Will the same thing happen in the sharing economy as with social media? Will travel-planning websites one day incorporate Airbnb plug-ins in addition to hotel and flight options? Perhaps. If so, a few, large platforms would become permanent fixtures of the sharing economy.
It’s hard to say whether this is an entirely good or bad thing. On the one hand, larger platforms are more likely to provide their users with financial and legal guarantees for their assets. Smaller and newer platforms may develop more innovative methods for conducting the same services as larger platforms, but might not be able to compete with the giant platform. This could prevent continued innovation – a current core tenant of the sharing economy.
Time will tell, and anything can happen.