The sharing economy is becoming a new economy
Our grandfathers had one job all their lives, we change six jobs in life, our kids will do six jobs at the same time. The P2P economic model is taking up more and more space. In the USA, 80% of the population has already tried some form of "sharing economy". This kind of economic connection has moved from the vertical to the horizontal, everything is connected and divided.
Can we even understand what is going on?
The younger generations are increasingly rejecting the need to own all material goods. Young people are buying cars and houses less and less, they have fewer credit cards. Millennials who are slowly taking the lead will become "dominant" customers as early as 2025. After this generation, Generation Z enters the scene, which will be a 100% sharing economy generation that will not even know a different way of doing business. Research shows that in one year, the popularity of the "sharing economy" has grown by more than 150% in all age groups of consumers. The sharing economy is already called the new economy and in 2025 it will reach the turnover volume of the traditional, old economy.
The sharing economy is strongest in tourism
In the tourism sector, this economy is developing most dynamically. The companies that are becoming symbols of these changes are Airbnb, Ryanair, Booking.com, Uber, eBay, Amazon.com, and many others. It is estimated that the 50 strongest digital technology start-ups operating in a P2P way are valued at over $ 130 billion, while the value of this market is currently estimated at $ 12 billion. dollars a year.
The Chinese are coming…
CTRIP.com employs 33.000 people, has 8.000 engineers (4 times more than booking.com), has 300 million users, owns state-of-the-art digital technology, works with all banks in China, and has a network of 6.500 representative offices throughout China. As a test of their strength, they offered the 20 most expensive package deals worth $ 200.000 for online sale. They managed to sell them in 17 seconds.
With its digital solutions, Alibaba travel wants to provide its passengers with a complete travel service from creating interest through travel decisions, purchasing arrangements, resolving visas, organizing departure from home, travel, transport to hotels, organizing local excursions, visiting local restaurants, shopping, transportation people and goods until they return home. For all this, they offer a system of payment and cooperation with partners on a global level with the possibility of cooperation and co-marketing in all segments. They already own very powerful e-commerce platforms, then companies in charge of passenger lifestyle profiling, leading cloud technology, artificial intelligence research and development system, global payment system. They work with the leading Marriott hotel chain through digital marketing, data bank, loyalty program and the like. It’s the same with Singapore Airlines, FLY Zoo hotels and similar companies outside of China.
Politics and interest groups against the digital economy
Politics has been quite unprepared for these changes, which is not strange, because the change disturbs the old state of affairs. In some countries, the authorities simply wait and observe developments, in others they leave the market to self-regulate, some adapt and some find it very difficult to cope with these changes. Big cities like London, Amsterdam, Barcelona, Berlin, Paris are "at war" with a new phenomenon, trying to limit it, to prevent development. They do this under pressure from groups of the old business model, such as taxi drivers, hoteliers, travel agencies, which in turn lose market share, but not because of the consequences but because of the cause - the collapse of the old economic system.
Position of the European Commission
The European Commission has taken seriously the positive and negative consequences of the new economic model, which they believe provides new opportunities, gives consumers more choice, offers lower prices, increases economic, social and environmental values, creates a large number of new jobs and jobs. adversely affects the existing market, creates tensions among existing providers of products and services, creates uncertainty because it does not accept regulatory frameworks such as legalization - registration, consumer protection, tax payments, social security and permanent employment. Nevertheless, the EC plans to invest 24 billion euros to include entrepreneurs in the circular, new economy. Airbnb has "buried the hatchet" and is currently negotiating with the administrations of 200 cities on how to collect taxes and show tourist traffic.
The attitude of the USA administration at the time of President Obama
The White House, the US government has given a clear signal that the new model is supported, former Secretary of State Kerry praised the "P2P diplomacy" led by Airbnb. The Goldman Sachs house said more and more people using Airbnb don’t want to go back to hotels anymore. This is perceived as a bad forecast for hotels. Some have adapted in time - D. Kong CEO of Best Western Hotel: "If we are already working with digital platforms, why not work with Airbnb?". The CEO of Accorhotel, Europe's largest hotel group, said it was "stupid and irresponsible to fight the sharing economy". They are already collaborating with Expedia, Home Away, Houstrip, Flipkey. Hilton collaborates with Uber through the "Ride reminder" platform, Mariot collaborates with Liquidspace in renting workspaces in his hotels (Work space on demand). However, traditionalists are calling for a "control" of the P2P platform. The European Association of Hoteliers "Hotrec" is in the lead.
To be continued…
Author: Nedo Pinezić, www.nedopinezic.com