Big Data Hype

The sharing economy is hype. Many claims it disrupts industries. Some even commit their careers to exploring the theme of sharing.

But there really isn’t a lot of disruption. There is a transfer of wealth from physical asset owners to information platforms. That’s all.

Airbnb is quite symbolic within the sharing economy.

But home owners were already sharing their rooms on forums and through private channels even before Airbnb appeared. Then, there were regulatory challenges — it was hard to catch illegal landlords and it was also difficult to trust private landlords given the lack of a credible review system.

Supposedly sharing companies aggregate information and display the information on a sexier website or application. In short, many of these hosts simply switched their distribution intermediaries. I agree that a more convenient platform helps grow the private room rental sector. But there isn’t really a technology revolution.

There is, however, a value revolution. If hotels continue to charge 30 to 50% more for rooms without substantiating their value, they will feel the competition from private rooms or from traditional hotels anyway. The same can be observed for Uber. Did private charter exist only after Uber was created? Certainly not.

The sharing economy enhances existing businesses. There is a significant transfer of wealth between traditional players and the common man. But there is no evidence of technology or business based revolution.