For a long time, the shared economy was characterized by low-priced but high-quality and convenient products and services. However, the situation is changing.
In many cities, the cost of shared bike services increased to as high as 1 yuan ($0.14) for every 15 minutes and the cost of shared phone chargers rose from a fraction of 1 yuan per hour to 2-3 yuan ($0.29-0.43) an hour.
All this shows that the low-price era of the shared economy has come to an end.
Many cannot help but ask why shared products and services were so cheap and why they became expensive.
It is wrong to assume that the low prices of the shared economy were a reasonable market price. The fundamental reason behind the low price was that the operators of the shared economy gave subsidies to grab customers from competitors, not because they had found effective methods to save costs. However, no industry can sustain such a model. Once large enterprises stand out in the chaotic competition and consumers have been wooed, the model will be abandoned and enterprises will raise prices.
At this point, consumers have two options, either to continue to use the service or exit. Whether users are willing to continue to subscribe depends on whether the enterprises can provide premium services that meet the former's needs.
(This is an edited excerpt of an article originally published in China Youth Daily on June 4)
