Slow Upward Trend in Sharing Economy Concept in Russia

Topic: 

The meager upward trend in sharing economy in Russia.

Introduction:

This report aims to describe in detail the meager upward trend in sharing economy in Russia and to compare the growth rates of this trend to the western world. I have divided this report into three sections. In the first section, the sharing economy is defined, and the overview of this trend is presented on the example of a famous company. Secondly, there is a detailed analysis given in order to explain the reasons of why this trend has not been truly successful in Russia. In the third section there is the list of examples of the sharing economy companies that failed to achieve the expected growth rates in Russia. All the statistics that was used to write this report was obtained from the reliable sources.

Body (Section one):

Sharing economy is a term that describes one of the most powerful trends of the previous year. It basically is an economic model that implies collaborative consumption of goods and services, bartering and rent rather than possession. In sharing economy all these transactions are usually done via the online market places. The examples of such companies include giants like Uber, Craigslist and Amazon. 

[pic 1]

On the graph above we can see a quarterly number of users of another famous sharing economy company – Airtasker. The data was collected in Australia. Although this graph does not represent a whole world situation – it is representative for most of the western cultures. As we can see the number of users of Airtasker grows exponentially with each quarter, making sharing economy trend one of the most significant and rapidly growing current trends in the world with a help of a number of other companies that experience similar growth rates.

Body (Section two):

        However, Russia always was a country where people have a rather rational mentality which resulted in a failure of a number of dominant multinational companies to make their impact there.

 First of all, communism is not long behind in Russia, therefore most of the people still remember the times when everything was shared in common, when everyone was equal. Thus, it seems obvious that a huge share of Russians do not trust the sharing economy trend as they simply are not able to differentiate it from the communist past. For example back in the USSR there was a miserable number of people who were able to afford a personal vehicle, while the flats were given by the government, and symbolized everything the person had – the status in society and the life’s outcome. Therefore it seems wild for those people to let other people use their cars or live in their flats even for a short time period.

Secondly, companies like Uber claim to cut the expenses and to be the economy of the future while in fact they just shift all the capital spending onto the drivers, who are forced to repair their vehicles themselves on the streets as they are not able to afford the car services due to a low minimum wage rate (around €110 per month). The drivers themselves basically have absolutely no protection or insurance if the car gets broken and they are left on their own to deal with it, which they are not used to, because in the licensed taxi companies, all these expenses are covered. What Uber actually does is optimization of the routes and the shortcuts with a help of well developed technologies. Proceeding with an example of Uber, Russians do not see the term “sharing” in their approach; they tend to see it as exploitation, as they have neither no social guarantees nor stable working hours and people are simply forced to rush between all those sharing economy companies in a search of a part-time job. The sharing economy companies in developed economies are doomed to succeed as people there are provided with a proper health insurance, decent minimum wage and other perks that allow them to think of the term “convenience” when making the choice. In Russia all those indicators are not as fully developed and therefore people will never prefer to have any further financial liabilities in order just to improve their situational comfort as they cannot afford this.