The sharing economy is the umbrella term for on-demand, peer-to-peer economy. In the beginning of the 21st century it was just seen as a disruptor but now the bunch of companies operating in this line has created a separate stream of economy. The proof for this is the growth of these companies Uber is now present in almost 60 countries and Airbnb is available in 191 countries. The growth of these companies and the number of companies replicating this model is evidence to its domination in the current world.

The companies have enables millions of people to have a work style or source of income in their own terms. It will put to use the un-utilized resources; it may be a car or a room in your house. This has developed the quality of our life, by making activities easier and cheaper. Now there are several companies that operate in similar fashion in almost every business model. Today there are companies that provide food groceries clothes and services like drivers, electricians or plumbers at the click of an icon.

Factors That Rules Evolution of Sharing Economy

income through sharing economy

It provides people the comfort of availing services or goods at the comfort of their house. This is the major factor attracting the people to this business. Working in a 9 to 5 job or got caught in the never ending work process, it takes away the burden of waiting for services or products.

The sharing economy has its roots in urban centers of the world. Cities which are over-crowded and have eternal demand for services and products are the breeding grounds for this service. Cost plays the next important role. Everything gets costlier once you step into a city, now when you have an option to avail things for cheaper rates, who would miss it?

They are a space for local economy to grow. Create job opportunities for many. On demand economy has provided gig for many university students, stay at home mothers and retired people. This group cannot for full time but an additional income is always essential and welcome. This is what sharing economy provided them, the comfort to work at your own time and place. The work you do is proportional to the money you gain.

Labor Norms

People who witnessed the labor movement and fought for their wages would feel slightly threatened by the way on demand economy is moving. There are no fixed wages or rights for the workers here. As in most of the companies on demand employees are not workers of the company rather they are treated as the contract workers. So the company is not responsible for their work environment safety or anything. This is most suitable for on demand taxi drivers. But when you look in the case of on demand electricians or plumbers or photographers the platform has nothing to do with the wages they earn. Because they are given the freedom to fix their wages and only need to pay a percentage of their earnings back to the platform.


Cities increasingly became crowded with preneial traffic making travel in the city a nightmare. When services or products are provided at the doorstep nothing makes it more attractive.


Due to the ability to reach large number of people unlike the physical stores the companies have a wider market place and thus enabling them to lower prices which makes customer return to them.


The start-up environment was very conductive during the beginning of on demand economies. Investors backed all new companies and believed that they had something big to deliver. This hope is also a reason the companies managed to build themselves. Anything radically new was not seen dangerous rather an opportunity for an illustrious future. Crowd funding too helped realize the dream of many entrepreneurs. People started believing new ideas and common man was ready to invest in the dreams of other common men. Even the society in general wanted to experiment new products and business, this change in mentality was helpful for companies to build.


They are seen as the disruptors of traditional business in the initial stages. Now they are no longer just disruptors but an economy of their own. However, many traditional industries blame them for taking unfair advantage over them. They are accused as violating tax laws and that is what makes their service cheaper. They may crib over this but these companies have moved fast and have established themselves well beyond the point of removing or banning them. Thus, all that one could expect is more norms and regulations framed for this business model, to keeping illegal activities creeping into the functioning.

Legal issues

However the growth for these companies has never been that smooth. Uber and Airbnb had so many legal battles across the world. The governments were not prepared to handle these sorts of new companies. They did not go well with existing laws. Many of their operations are termed illegal. In certain extreme cases they have been completely banned. Uber has recently sought the intervention of European Union regarding its ban in European countries along with various others on demand companies. Some countries are taking initiative to frame laws for them.

Quality of Service

Many on demand companies have managed to survive because of their commitment to provide certain amount of quality which was not available in previous times. Uber’s success can also attributed largely to the unorganized taxi industry which never cared about the customer satisfaction. Uber stepped into the scene and guaranteed this and caught the attraction masses. They have rating system to maintain that. Same goes to Airbnb’s success they gave affordable stay at times when decent hotels stared getting costly.


Today there are various businesses which operate on demand not just cars and rooms. You can hire professional like photographers, lawyers and accountants on demand. Thus giving any budding professional an opportunity to grow and even the customers can choose the best out of all the available options at the price flexible to them.

But is on Demand The Necessity?

While everything looks attractive about on demand there are things which we do need at our demand. The classic example on can give is medical care. You may get your medicines on demand but the person proving the medical care cannot be availed through on demand. The major reason for this is medical care is a continuous process. A doctor patient relationship is very essential for a healing process.

So the craze of on demand should be restricted in certain cases. But that is not happening exactly. Today we have on demand OR and clinics. So until the craze crumbles it keeps going.