The Principles of a Sharing Economy

By: M. Weber

In the age of consumerism, the term “Sharing Economy” comes almost as a surprise, as by definition it highlights the act of borrowing or renting goods as opposed to the act of buying and selling these. While the concept is still in its early stages of development and imposition in today’s society, it comes with a wave of revolutionary beliefs that is shaping the current and future generations of the world.

​Short-term renting is a prime example of what a Sharing Economy outlines: it is essentially when a property-owner opens up his/hers home to other people, being them locals or tourists, in exchange for money, during a specific time period. While one at first may think that this is limited to houses and apartments, it actually goes way beyond that: you can rent out a bedroom, a car, clothes, or even a bed in a room (popularly in dormitories inside hostels)! But while hotels seem to almost fit into that list, their formal, less flexible, and some may argue less adventurous nature prevents them from doing so.

While it seems like Short-term Rental companies are on an ongoing war with hotel companies, in some countries, like Portugal, the current hub for Short-term renting, the figures on both show that while the latter is recognised as the more popular option worldwide, the former, in fact, might be winning the said war:

	Short-term rentals	Hotels
​Number of registered accommodations	59,300	1,282
Total number of beds (total capacity)	229,298	181,082

Figures for hotels and Short-term Rentals in Portugal (via https://eco.pt/2018/03/01/ja-ha-mais-camas-no-alojamento-local-do-que-na-hotelaria/)

   
​But what really makes up the “winning factor” of Short-term Rentals, argued by previous guests, is the opportunity to “live like a local” due to the somewhat personal environment and cultural immersion of buying, cooking, and navigating just like the hosts normally do. Other qualities also shaped this ongoing growth: rented accommodations are cheaper (generally), provide more space for the guests (which is especially good when involving children), and ensure a more flexible stay (which can be helpful when, for example, a vegetarian family cannot find a place to eat and hence can choose to cook their own dinner).
         
​However, while the growth of the Sharing Economy may seem great at first hand, as it provides a city with renovated buildings and a wider variety of entertainment and food as these are industries that grow alongside the rental business, it also comes with many concerns. While this “war” continues, the introduction of wider variety of entertainment and restaurants may promote a de-characterisation of historic neighbourhoods, and the increased rental of ordinary houses and apartments may lead to a higher average house pricing for locals wanting to find a home to live in, and even a shortage of homes for residents. Other popular discussion points are the well-being of the renter’s neighbours, the ethics of the pricing of the establishment, and, for the businesses themselves, the possible monopoly of the industry.

Law-enforcers in Portugal are at this moment trying to come up with a law, that could maybe even be instilled in other countries across Europe and other continents, in an attempt to rule out all or at least many of the problems listed above, trying to be fair on both the hotel and Short-term rental entities as to not force an ending to a battle that has practically only started.