Must adopt robust cybersecurity, data privacy protocols to comply with laws
By Naushad K. Cherrayil
Bengaluru: New entrants in the sharing economy platforms are disrupting old models and gaining traction with consumers by adopting disruptive technologies, an industry expert said.
Aisha Lena U-K Umaru, Thematic Intelligence Analyst at GlobalData, said that incumbent companies such as Uber and Airbnb face a new wave of disruption from smaller players as the sharing economy market matures and these new entrants are harnessing technologies such as AI to gain a foothold in the market, forcing legacy companies to invest in disruptive technologies to maintain their competitive advantage.
The sharing economy is a financial model that allows people and companies to share access to goods, services, and assets through online platforms or digital markets.
Companies such as Airbnb and Lemonade have integrated AI into their offerings to provide more personalised recommendations or more efficient services.
More personalised offerings
As AI develops, sharing economy platforms will use it to understand their consumers better and provide more personalised offerings.
““We are seeing how technology can enhance products and services across all industries. However, as sharing economy platforms are predominantly app or website-based, the need to invest in technology is indisputable. Technologies like generative AI are helping sharing economy platforms enhance their services,” Umaru said.
Moreover, she said that consumers are becoming used to hyper-personalization and are increasingly familiar with chatbots and other AI services.
“Sharing economy platforms can invest in these areas to satisfy consumer demand and stay ahead of their competitors.”
According to Allied Market Research, the sharing economy market size was valued at $387,074.5 million in 2022 and is projected to reach $827,098.1 million by 2032, growing at an annual growth of 7.7 per cent from 2023 to 2032.
Sensitive data
Umaru said that three key factor – rapid advances in digital platforms and devices, globalisation and urbanisation, and more efficient use of scarce resources – have contributed to the massive growth of the sharing economy:
Moreover, she said that much of this growth may be driven by large players expanding their dominance.
However, she said that the fast growth of smaller players such as peer-to-peer (P2P) insurance company Lemonade or clothes-sharing platform Hurr will also have an impact.
The speed at which the sharing economy is evolving, she said will require agile responses from data privacy and cybersecurity perspectives.
“We have seen data or cybersecurity breaches and, subsequently, large fines or legal action against players such as Uber and Chegg. These highlight the tough position in which sharing economy platforms are placed as they hold large amounts of sensitive data. As sharing economy platforms invest in new technologies, they must also adopt robust cybersecurity and data privacy protocols to comply with ever-more stringent regulations around the globe.”
