Among the many things that are seeing an upward trend in today’s times, ‘Sharing Economy’ stands out for the quick way it is catching on with people. This economy isn’t new. Since decades people have been sharing furniture, clothes and other utilities primarily because of the cheaper costs and the needs which were much simpler. Car pools and Bed and Breakfasts are classic examples of businesses built on a sharing economy.
With technology, it has become much easier, quicker and cheaper to live in a shared environment especially when a large number of people are impacted. The best example of a sharing economy is AirBnB, a San Francisco based company that opened up the home rental segment putting owners directly in touch with guests completely online. More than 40,000 people across 192 countries have rented places to stay through paid transactions without getting even a glimpse of the others.
With people and their data increasingly found online, it has become much easier for assets such as furniture, products and appliances to be consumed as services. When before, renting anything involved stress and worry, owners today are matched with renters, people checked out through social networking sites, payment transactions secure and connectivity all the more seamless.
The sharing economy is here to stay, because we cannot use and throw everything anymore. There is only so much we can use and it makes perfect economic sense to share the surplus or whatever is unused. Sharing or renting sites put people in touch with each other or takes care of their needs for a fee.
Who can benefit from a ‘Sharing Economy’?
- This model works best for assets or items that are expensive to buy
- It is also great for people who own things that they seldom make use of themselves
People who are a part of the sharing economy vouch for access trumping ownership. This model is followed across the globe, from fields being rented out in Australia, to camping spaces in Sweden and appliances in India.
The core feature of the sharing economy is people renting their assets to each other and author Rachel Botsman pegs this peer-to-peer rental market at $26 billion and growing.
Benefits of a Sharing Economy or ‘collaborative consumption’
- It helps owners make money out of underused assets
- Guests/renters pay less than what they would have spent on a new asset or rented out the item from a traditional provider
- It also helps the environment with less thrash, promotes mindfulness and prevents attachment to physical things
The sharing economy is here to stay and will have a major impact on the economy in the years to come. It is a great example of the internet impacting consumers and their buying decisions.