Question Details

[solution] »

Hi Prof Hugo

Listed below are the requirements for the assignments

Explain how the pe


Description

Answer Download


The Question

Hi Prof Hugo

Listed below are the requirements for the assignments

Explain how the peer-to-peer (shared economy) concept is disrupting our traditional economy

Describe whether the shared economy is creating new value for the consumer or if it is just replacing existing business

Please feel free to add anything additional to enhance the paper

The assignment must be 3-4 pages not including reference and cover page



Running Head: MARKETING CHALLENGES IN A NEW ECONOMY The Concept of the Shared Economy

 

Alonda Martin

 

BUS 620 Managerial Marketing

 

Dr. Susan Sasiadek

 

June 13, 2016 1 Running Head: MARKETING CHALLENGES IN A NEW ECONOMY 2 The Concept of the Shared Economy

 

Introduction

 

A shared economy is a socio-economic ecosystem built around the sharing of human,

 

physical and intellectual resources (Matofska, 2016). In the article Ailrbnb and the Unstoppable

 

Rise of the Share Economy, the author discusses the emergence of a new shared economy were

 

owners are creating income by utilizing spare things such as a bedroom. The rise of peer-to-peer

 

sites has grown with sites like Uber and Lyft and has contributed an income for many people.

 

?The sharing concept has created markets out of things that wouldn?t have been considered

 

monetizable assets before? (Geron, 2013). Forbes estimates that this year 3.5 billion dollars of

 

the shared economy will flow directly into the pockets of the people and will grow 25% (Geron,

 

2013). The shared economy has caused a disruption in the traditional economy because of taxes

 

not being collected that harms industries such as hotels, taxis and car rental. Like any business,

 

the shared economy does have issues but it is still growing at a rapid rate.

 

How this Concept is Disrupting the Traditional Economy

 

When the economy took a downturn in 2008, many Americans lost their homes, jobs and

 

high credit scores. Once the economy started to turn for the better many people did not recover

 

the lifestyle they were once accustomed to, so they began to think of alternative ways to earn

 

additional income. For example, Sara can utilize Airbnb to list her luxury apartment for rental

 

for weekend for $100. When Sara accepts the offer from Jane through Airbnb, she will would

 

leave her apartment for the agreed upon date and net $97 dollars tax-free from the weekend

 

transaction. Since sellers connect directly with the buyer, this may allow them to capture profits

 

that would shared with channel partners (Finch, 2012 para5). Although this is great for Sara,

 

there are issues with this new model that is causing quite a stir. Because the lack of taxing for Running Head: MARKETING CHALLENGES IN A NEW ECONOMY 3 the overnight stay accommodations, many in the hotel industry believe that it is unfair because

 

they provide the same service and is taxed for it.

 

With traditional hotels, there are certain standards that the hotel must achieve to be a fully

 

operational business. According to Malhorta, ?short term rentals create shortages of affordable

 

log-term housing when nightly rates exceed monthly rates?. Sharing would directly affect lower

 

income families although it would increase the income from homeowners. Furthermore, it also

 

hurts the hotel industry because the price of the peer-to-peer accommodations forces the hotels to

 

lower prices in order to compete for customers.

 

Another popular peer-to-peer service that is on the rise is Uber, which allows private

 

citizens to utilize their personal vehicle to give rides share services for a fee. Uber gives the taxi

 

and drive services direct competition. With taxi companies, such as Yellow Cab, all drivers must

 

be licensed and carry special commercial insurance. Ride sharing is increasing by evading costs

 

and regulations that regulate businesses (Malhotra, 2014). Not only does Uber avoid the fees

 

that are required by taxi drivers, but Uber can also avoid lawsuits when accidents occur. For

 

example, if an Uber ride-sharing driver strikes a pedestrian and kills them, the sharing service

 

would not be held responsible because the shared driver is considered a contractor (Malhotra,

 

2014). The company is considered not considered a transportation service, so it successfully

 

avoided paying the victim?s family because of this loophole.

 

Value or Replacing Existing Business

 

Providing an alternative way to earn money for regular people is less expensive to the

 

consumer; however, it lowers the standards from professionals and endangers the customers.

 

According to Malhotra, ?peer-to-peer exchange based on sharing ideas or performing work, such Running Head: MARKETING CHALLENGES IN A NEW ECONOMY 4 as TaskRabbit on the cheap, strips opportunity from the bottom of the pyramid, as jobs move

 

from traditional manufacturing and services to micro-services?. Although the host may have

 

insurance to cover damages, their rates would increase and the company has no consequences.

 

Insurance companies also face losing profits as well because with peer to peer sharing the

 

claims if there was an accident is basically fraud which causes rates to increase for everyone.

 

For example, since Uber drivers are considered ?contractors? if they would have accident with a

 

person in their car, their insurance claim would be fraudulent because they could list the person

 

as a passenger when actually they?re a client because the contractor is making a profit for the

 

service. This type of blatant misrepresentation is reckless and increasing everyone?s insurance

 

rates.

 

Finally, peer-to-peer sharing eliminates traditional jobs such as taxi drivers and hotel

 

jobs. Peer-to-peer sharing allows cheaper rates and hotels have to drop their prices to stay

 

competitive. When rooms aren?t being booking employees lose their jobs and businesses close.

 

The sharing economy is dangerous and could cause many traditional businesses to fall but it also

 

opens the doorway for more increase and fierce competition.

 

Conclusion

 

In the new economy, anyone can become a part time or temporary host to earn extra

 

money. This is appealing to someone who has an extra bedroom or willing to leave their home

 

for someone else to enjoy for a short time period; however, this puts a strain on traditional

 

establishments who pay extra taxes and go through additional regulations to operate. The new

 

economy is creative but can be hazardous to the ?contractor? and the ?customer? if an incident

 

occurs. Running Head: MARKETING CHALLENGES IN A NEW ECONOMY 5 Reference Finch, J. (2012). Managerial Marketing. San Diego, CA: Bridgepoint.

 

Geron, T. (2013, January 22). Airbnb and the unstoppable rise of the share economy. Forbes,com

 

, 3.

 

Malhotra, A. a. (2014). Economic and Business Dimensions The Dark Side of the sharing

 

Economy and How ro Lighten It. Communications of the ACM , 57 (11), 24-27.

 

Matofska, B. (2016, April 25). The People Who Share. www.thepeoplewhoshare.com .

 


Solution details

Solution #000176220

[solution] »

Hi Prof Hugo

Listed below are the requirements for the assignments

Explain how the pe.zip

Uploaded by: Tutor

Answer rating:

This paper was answered on 14-Oct-2020

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Oct 14, 2020

EXPERT

Tutor

ANSWER RATING

BEST TUTORS

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

STUCK WITH YOUR PAPER?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now