The sharing economy has shaped the life in the 21st century, making a variety of alterations and changes due to the rise of digital platforms and collaborative consumption. Airbnb is an online platform for both short and long-term homestays, and it has been tightly associated with the concept of the sharing economy since the company was established in 2008, and ever since it has become one of the most successful platforms for sharing economy. This blog will discuss the sharing economy, the difference it makes on the life in the 21st century and the advantages and disadvantages of one of the biggest sharing economy platforms – Airbnb.

Sharing Economy

Research shows that habitat and biodiversity loss, pollution, and climate change are caused by excessive consumption, which has resulted in the overexploitation of natural resources (Lehner, 2019). Toward a more sustainable consumption pattern, the potential of the sharing economy has been discovered. 

The concept of “sharing economy” was discussed and introduced by Lawrence Lessig in 2007 (Lessig, 2008, as cited in John, 2016). Over the last decade, the “sharing economy” has boomed and become the mainstream of collaborative consumption – the term “sharing economy” is often treated as synonymous with “collaborative consumption” (Lehner, 2019). Statistics from Google Trends show a spurt of interest in the sharing economy is hard to ignore since 2013 (John, 2016). The sharing economy has the potential to improve consumer behaviour, reduce resource usage and bring in more sustainable consumption, promote sustainable economic growth, and improve social cohesiveness in urban areas – these are achieved by providing access over ownership by utilizing the idle capacity of products and services to reduce overall consumption and subsequently the use of resources (Lehner, 2019). 

The sharing economy is closely intertwined with the development of the internet, and it is defined as “ICT-enabled platforms for exchanges of goods and services drawing on non-market logics such as sharing, lending, gifting and swapping as well as market logics such as renting and selling” (Laurell and Sandström, 2017, as cited in Geissinger et al., 2020). The core of the sharing economy is digital – websites and apps are the foundation (John, 2016). Two of the biggest sharing economy companies, Airbnb and Uber, are digital intermediaries’ platforms – internet technology enabling people to offer goods or services through these platforms, and facilitate transactions, communication and coordination among participants (Abbate, 2017). Moreover, the internet enables easy access to sharing economy platforms – netizens can access these platforms from various devices. This interdependence between the sharing economy and the internet has reshaped the consumption pattern in the 21st century, leading to significant changes in various industries and the way people live and work.

Sharing Economy Platform – Airbnb

According to Roelofsen and Minca (2018, as cited in Hati et al., 2021), as of 2017, Airbnb had reached 100 million hosts and guests worldwide and generated $100 million in revenue. It is the market leader of the digital hospitality services platforms which enables everyone to lease or rent their property (van, 2018). This is different from the practices in the traditional hospitality industry. 

The operational nature of Airbnb is the sharing of space, meaning everyone is a micro-entrepreneur. Airbnb, as a model of the sharing economy, uses Peer-to-peer (P2P) technology to facilitate individuals to transact directly with each other without involving traditional intermediaries such as companies or businesses. P2P is the “activity of obtaining, giving, or sharing access to goods and services, coordinated through community-based online services”, which means the P2P model can more flexibly and efficiently transform the underutilized resources into profit (Hamari et al., 2016, as cited in Akande et al., 2020). Airbnb, as a result, shares and efficiently uses the existing resources. 

Advantages of Airbnb

Airbnb as a sharing economy platform embraces the P2P model – users are categorised into two groups, the “host” and “guest”. The advantages will be discussed from both perspectives.

Host

Airbnb provides a platform for hosts to create new opportunities for income generation, by utilising and maximising the underutilized assets (Hati et al., 2021). Hosts can earn money by doing short-term rentals, rather than being bound by long-term rental agreements, and the hosts as micro-entrepreneurs on Airbnb typically have a high degree of autonomy and flexibility in managing their listings and services (van, 2018).

Furthermore, Airbnb, as a well-established sharing economy platform, releases a series of regulations to guarantee the rights and interests of hosts. As shown on the “Airbnb your home” webpage, guest identity verification; reservation screening; and $3M USD damage protection are examples of the protections.

Guest

Airbnb, as a sharing economy platform, enables travellers to experience different and special travels. Firstly, Airbnb offers local authenticity and immersion, by providing guests with the opportunity to live like a local (Hati et al., 2021). Some of the Airbnb homes are rooted in local areas, whereas hotels are mainly located in urban areas. As a result, Airbnb guests have the chance to explore areas which are not frequently recommended. Furthermore, guests can book for a single room instead of the entire house, giving guests the chance to socialise with hosts.

Secondly, hotels are mostly the same around the world, but Airbnb provides “guests” the opportunities for a unique living experience. Airbnb has a variety of one-of-a-kind, distinctive housing options – guests can discover boats, treehouses, glamping pods, cabins, and even castles from the Airbnb platform. 

Finally, large gatherings make excellent use of Airbnb spaces – the large residences with many beds typically would be less expensive than traditional hotel rooms. Additionally, houses with amenities are not available in traditional hotels, but can be found on Airbnb platform, such as a private game area with pool or foosball tables, a hot tub, a yard, a pool, and a large dining room.

Disadvantages of Airbnb

The disadvantages of Airbnb are revealed in the operational process, such as the data safety of the Airbnb hosts and guests.

Airbnb has a history of data safety issues. Research of Twitter complaints from 2015 to 2020 shows thousands of reportsclaim hacking and scamming after booking on Airbnb. In 2020, Airbnb confirmed a technical issue, that Airbnb hosts are able to access other people’s inboxes; and host names, profile picture, booking revenue, history of booking and property views have also been leaked. 

Improvement of Airbnb

Although with the disadvantages, the Airbnb and the sharing economy still present more possibilities. To achieve this objective, the sharing economy platforms, including Airbnb, need to adjust, modify, and improve. 

Airbnb should actively update its data security systems. Airbnb, as the data disseminator, has the responsibility to protect every record of users’ privacy in the database from unauthorized access and breaches, especially sensitive information. Regular security audits and assessments should be conducted to identify and mitigate potential vulnerabilities.

Furthermore, the messaging system within the Airbnb platform should be protected. Airbnb is a sharing economy platform for direct communication between hosts and guests, some private information such as identity and bank information may be involved during the conversation, so Airbnb’s communication system needs encryption protection.

In conclusion, the sharing economy has undeniably shaped life in the 21st century. Airbnb, one of the pioneering platforms in the sharing economy, has played a significant role in this transformation. It has reshaped the way people travel, share resources, and generate income; however, Airbnb has faced issues related to data safety. As the sharing economy continues to evolve, platforms must adapt and improve.

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Reference List

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Airbnb discloses new Data Breach. Digital Watch Observatory. (2022, February 26). https://dig.watch/updates/airbnb-discloses-new-data-breach
 
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Hati, S. R. H., Balqiah, T. E., Hananto, A., & Yuliati, E. (2021). A decade of systematic literature review on Airbnb: the sharing economy from a multiple stakeholder perspective. Heliyon, 7(10), e08222–e08222. https://doi.org/10.1016/j.heliyon.2021.e08222
 
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Lehner, M. (2019). Defining the Sharing Economy for Sustainability. Sustainability, 11(3), 567. https://doi.org/10.3390/su11030567
 
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Whitmore, G. (2023, February 15). 8 pros and cons of staying in an Airbnb. Forbes. https://www.forbes.com/sites/geoffwhitmore/2019/11/12/8-pros-and-cons-of-staying-in-an-airbnb/?sh=6253d60a3c2f