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Communications of the ACM

Economic and business dimensions

The Dark Side of the Sharing Economy . . . and How to Lighten It

The Dark Side of the Sharing Economy, illustration

Credit: Michela Buttingnol

Because we love the sharing economy we want to improve it. But most pundits are telling only half the tale: Naysayers are too bombastic and boosters too unrealistic. Improving the sharing economy means dealing realistically with its dark side. To assure sharing will grow up, we need to avoid market and regulatory failures that allow parts of the market to gain unfair advantage over others. Regulatory arbitrage is not the right answer. Instead, sharing must ultimately create real consumer value.

It is not too early to begin. Sharing is quickly spreading. People already have access to rooms (AirBnB, Roomorama), tools (SnapGoods) cars and bikes (RelayRides, Wheelz), and ad hoc taxi services (Uber, Lyft). These two-sided platforms offer many advantages by unlocking the value inherent in sharing spare resources with people who want them.4 The size of the sharing economy is estimated at $26 billion.1,16 Internet mediaries now match demand and supply in real time on a global scale. The potential macroeconomic gains are colossal, but problems abound.


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