The Sharing Economy

The Sharing Economy

The Sharing Economy[86] is an emerging, highly flexible economic network known as the sharing economy allows people to share resources – equipment, services, and skills – with one another, at a lower cost than traditional. The Sharing Economy increases efficiency, the participants can get valuable items, such as cars, while extracting value from idle possessions or talents. It will bring some tangible benefits that will increase the quality of life, such as more flexibility in work and life, more ways to earn and save money, less worry about valuable possessions and obligations, and more adaptable businesses. Examples include:

1.     Peer-to-Peer Lending: these platforms allow individuals to lend and borrow money going through a traditional bank. Technology makes it easier and safer for individuals who have money to find people who need money. It represents a higher risk for the lender, but also provides higher return rates. It also provides capital to borrowers who may not be able to find a traditional loan at an affordable rate due to shaky credit history or a stingy bank.

2.     Crowdfunding: connects people who need money with those who provide it. Entrepreneurs present ideas in platforms such as Kickstarter, to a community of potential funders, and then set a fundraising amount and date. Some campaigns act as grants, and others act like capital raising rounds, where startups or small businesses solicit investments in exchange for equity in the company.

3.     Apartment/House Renting and Couchsurfing: Apartment/house sharing platforms, such as Airbnb, VRBO, and Couchsurfing, connect homeowners with people who need a place to stay when they’re traveling. Hosts set the nightly price and specify available dates, typically when they’re not using the property. In preparation for a trip, visitors can browse accommodations in their destination and choose a place that fits their desired neighborhood, amenity needs, and budget.

4.     Ridesharing and Carsharing: with apps like Uber and Lyft, you can hail a ride from drivers in their personal vehicles. Services like Car2Go and Zipcar, you can commandeer a shared vehicle, owned by a for-profit or nonprofit organization, and pay for the time you drive it. And with newer companies like FlightCar, you can park your personal vehicle in an airport parking lot and rent it out to someone who needs it, whether they’re a car-less neighbor or someone visiting your city business. Taxi and rental car companies have become antiquated. Ridesharing has forced these players to adopt technological solutions, such as smartphone apps, and may result in lower prices over time. Though taxis and rental car companies have been around almost as long as the automobile itself, the sharing economy dramatically undercuts their business model.

5.     Coworking: it is a space that allows you to share the cost of office rent, utilities, storage, mail, and office supplies with other professionals. It is very useful for freelancers, sole proprietors, and very small businesses that don’t require lots of storage space. Coworking is also a social experience that puts people in close contact with professionals who have complementary talents.

6.     Reselling and Trading: eBay and Craiglist allow you to buy, sell and sometimes trade new and used goods, without face-to-face interaction.

7.     Knowledge and Talent-Sharing: traditional jobs may never go away entirely, but for some, talent marketplaces may be a much more enticing form of employment. Talent marketplaces are more flexible than traditional employment arrangements. If you have the skills or knowledge, these platforms allow you to earn money by providing them, often from the comfort of your own home.

8.     Niche Services: smaller slices of the population can benefit from niche services. These services cut out the middle man, reduce costs, and connect like-minded people. The Sharing Economy introduces disruptive innovations in areas such as Automotive, Hospitality, Retail, Entertainment and Media, and Technology landscapes. Uber, AirBnB and Spotify are good examples. These business models include providers and users. Another example is CouchSurfing, where a person acts as a guest and offers a couch in his living room for an unknown guest. The guest gets a free place to sleep, and the host gets points in a ranking system. These points can be used to get a better place at somebody else’s house when the host decides on travel.     Before, you needed money to get around. Today, webpages and apps connect people who have different needs together. You can lend your house to a stranger in the summer, and he can lend you his. In that way, you spare the rent. You can find a free driver to take your kids to school, together with other kids from the neighborhood. Or lend things between neighbors. Again, these type of arrangements or inter-exchanges have always existed, but at an informal level. For many years, parents would call each other to decide which one would pick up the kids. The principle is the same, but by using technology this is done in a more efficient way. And whereas before you needed to know people in person, now it is easier to get in touch with strangers that have the same interests, needs or demands. Things are getting easier and life is getting cheaper… if you dare to TRUST a STRANGER.