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Concerns about a shared economy, "Who is it for?"

"The Share Hub" is a space where citizens discuss and share their ideas with them about the city's shared economy policy and what good influence it will have on our society. Because of this discussion, the shared hub has been able to tell many people what a shared economy. And it has played a big role in helping them to become a new concept of understanding Seoul.

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However, a shared economy is not necessarily a good one. Almost everything have an bad side. And the bad side be wanted to hide. People either try to ignore this hidden side, or they choose a strategy that highlights the good side. We walked towards a sign that the good side direct. 

But right now, Share Hub is going to look at the dark side of the shared economy. It's a rather heavy area of talking, but I'd like to spend a long time talking about problems that haven't yet happened, or that have already occurred, that we don't recognize.

First, let's take a look at the problems that shared economies can face with the topic of friction with existing businesses that are currently the most problematic in Korea. In the future, we will look at the lack of institutional basis, trade risks, and social risks. I'd appreciate it if you could look forward to writing.

A new business model called a shared economy can cause conflicts with an existing business as it replaces some of the existing business models. More detail can be divided into friction with existing suppliers (e.g. taxi drivers) and friction with existing producers (e.g. motor company).

As the shared economy replaces existing transactions in part, it is expected that the profits of existing suppliers who were supplying existing transactions would decrease. For example, if you share a ride, you may find that the existing taxi drivers have strong objections. In case of public accommodation, the existing accommodation businesses such as hotels and lodging will be reduced.

It poses a problem where conflicts with existing suppliers can cause a greater social backlash. Existing suppliers are expected to be politically resistant due to the need for policy consideration and the number of businesspeople who are smaller than the middle class.

If you go deeper into the friction with an existing supplier, you may encounter problems in terms of the well-being of your existing provider. Even if the shared economy does not impede overall social well-being, the social levels of existing suppliers can be reduced, and if the existing supplier is subject to policy and social consideration, the reduction in the existing supplier's stakes can be an important issue in itself. Taxis and lodging-sharing private sector owners, existing suppliers in the field of passenger-sharing, are usually low-income people, so reducing their well-being can be an important issue. When hotel sharing was activated in San Francisco, where the Airbnb headquarters is located, concerns were raised that the benefits of the existing hotel would be reduced, triggering the dismissal of hotel employees.

However, if existing suppliers can utilize the shared platform, the degree of reduction in the benefits is reduced. Small homeowners can promote empty homes through a shared hotel-sharing platform, so they can turn into a shared-trade provider and reap the benefits of a shared economy. Also, friction with existing businesses is not necessarily a concern for the shared economy, as there are cases where existing suppliers do not exist to a significant extent or are not subject to policy or social consideration in various areas of the shared economy. In space, knowledge, and talent sharing, there is no existing supplier or enough to form an industry group. Financial shares (especially loan-type crowdfunding) are not subject to policy or social consideration by existing suppliers, savings banks or loan sharks.

It is also possible to have a shared economy that does not conflict with existing businesses. Kakao Taxi, the platform for sharing rides, does not cause friction with existing suppliers because it offers only the existing suppliers taxi drivers, thereby allowing existing suppliers to use the platform as a new means of customer exploration to expect additional benefits. You may think that a platform providing intermediary services only to an existing provider would not be a shared economy because it is not an idle asset, but an idle asset might be able to reach new demanders that were not considered as existing intermediary services.

We will then look at the friction with the existing producers. If the shared economy is activated, the utilization of idle assets such as houses and vehicles will increase, thereby reducing the demand for purchases to those assets, which may also decrease. Shahen et al (2012) sees that people who join North America's vehicle-sharing network have a 50% lower ownership ratio than the reference group. According to a 2014 survey of 1,000 U.S. shared economy users by accounting firm PwC, 81 percent of respondents said sharing assets is cheaper, 43 percent more expensive, and 57 percent said sharing is a new form of ownership.

However, if new demand is generated through the revitalization of the shared economy, existing production companies can participate in the shared economy to reduce losses or obtain additional revenue streams. The Vehicle Inspection GM (GM) is able to facilitate the TSM sales by providing a technical benefit to owners of vehicles that regularly purchase vehicle ICT services sold by their affiliate OnStar, by providing them with a more convenient technology benefit. 

BMW, a German carmaker, has brought in its own platform called DriveNow, which is a part-time rental of its brand vehicles. DriveNow CEO Richard Steinberg expects BMW's main and customer base to be separated from the company's shared car owners, mainly high-end vehicle consumers, so the shared economy will not shrink the existing business.

Also, it would be desirable in the long run to reduce the production of a certain asset and to inject a replacement component into another asset of the consumer's desire if technology and economic developments no longer require the same amount of assets as in the past. Within this scope of the existing producers, we did not include the same production effect as in case intangible assets such as financial, knowledge and talent sharing are traded or assets other than major production segments of existing producers such as space sharing.

We have discussed conflicts with existing suppliers and producers that may result in a shared economy. Currently, Kakao and the taxi industry are in a big fight in Korea due to the shared economy. When Kakao attempted to launch a car pool service for commuter cars, the taxi industry protested that it was sharing the taxi industry's pie. While we may look at the shared economy in terms of efficient use of resources and utilization of idle resources, it is time for us to take a look at the benefits that existing suppliers and producers traditionally have. While it may be necessary to protect businesses that are subject to social and policy consideration, we should consider whether such protection poses a risk of losing the vitality of society as a whole.