All across the world, a new wave of peer-to-peer, collaborative consumption is shaking up established business categories. Whether by borrowing goods, apartment or house renting, crowdfunding, or providing micro-skills in exchange for products or services, consumers are showing a substantial appetite for the gift and sharing-based economy.
Companies like Uber and Airbnb have taken the world by storm and boosted the sharing economy’s rise and development. But what is the sharing economy? Where did it come from, and where is it heading?
Sharing Economy Definition
The sharing economy, also known as collaborative economy or peer-to-peer-based sharing, is defined as a concept that highlights the ability and the preference of people to borrow or rent goods rather than buy and own them. However, trying to explain exactly what the sharing economy is would not do the term justice. In general, it is used as an umbrella term for various services, products, and apps.
For instance, you can cycle around town on a Lime bike and go home in an Uber. You can leave your pet to a specialized pet-sitter from Rover and order your food from Deliveroo. These examples show us how, from the modern consumer’s point of view, sharing and using is more important than having. The goal is to actively participate in reducing environmental expenses and fight against waste and overproduction.
How Did the Sharing Economy Grow So Quickly?
The biggest driver behind the growth of the sharing economy is technology. Numerous platforms, apps, and distributed networks have made it possible for people to share and inspire entrepreneurs to build their businesses around this economic model.
Ming Hu, professor of business operations and analytics at Rotman School of Management at the University of Toronto, says: “These apps have brought underutilized resources online and efficiently matched them to demand.” Young people, such as Millennials and Generation Z-ers, are more comfortable borrowing and using goods than owning them.
Energy also seems to be a sharing opportunity. Community microgrids enable access to renewable energy on a small scale, sharing the cost among users and selling surplus to regional and national grids.
The Effects of the Sharing Economy on the Macro Scale
The sharing economy keeps on growing and amassing enormous wealth, with some researchers expecting it to grow to more than $300 billion by 2025. Convenience, trust, and a sense of community are all factors for the adoption and further development of the sharing economy. Thanks to consumers’ willingness to try out various mobile apps, there are fewer obstacles for building brands from a company’s point of view, reducing waste, earning money, and enjoying an unrivaled level of convenience from the user’s standpoint.
The Effects of the Sharing Economy on the Micro Scale
According to the recent survey done by SurveyMonkey, consumers of all ages, but especially younger generations, are fully enjoying the sharing economy. This corresponds to the aspirations of most Millennials’ who prefer a simpler lifestyle with fewer possessions and more freedom from stuff they don’t need on an everyday basis.
People are becoming increasingly aware of the negative side of excessive consumption, the earth’s limited resources, and the impact of our products’ disposable nature on the environment. These are some of the top reasons why the sharing economy appeals to people and why it will keep on growing.
The Impact of the Sharing Economy in Various Industries
The collaborative economy has a history of disrupting traditional business sectors. Industries are being affected by this new economic concept, and many will struggle if they don’t adapt to the changing landscape.
The Impact on Transportation
As already mentioned, one of the biggest ascensions in the transportation industry belongs to Uber. This and other ride-sharing companies offer affordable, convenient, and safe alternatives to public transport and taxi cabs.
Top sharing economy transportation brands are:
- Lyft: $11 Billion
- Didi: $50 Billion
- Uber: $72 Billion
The Impact on Buying Consumer Goods
The three most influential factors in the consumer goods industry are affordability, convenience, and efficiency, especially compared to traditional methods of acquiring the same products.
One of the best examples of a success story from this industry is eBay, a real pioneer in the collaborative economy. This innovative platform allows its users to buy and sell new or used items through its interface. Other popular sharing economy brands in the consumer industry are Rent the Runway and Etsy.
The Impact on Personal and Professional Services
Probably the best example of the benefits of the sharing economy comes from the personal and professional services space. Platforms like Upwork, Fiverr, and TaskRabbit provide space for people to offer and share their skills, experience, specialized knowledge, certifications, and training to secure short-term labor. From plumbers to accountants to copywriters, everyone has a chance to find their next gig.
The Power of Sharing
Long before the sharing economy became a marketing phenomenon, humans have been sharing things with each other for millennia. This sharing spirit has facilitated the rapid adoption of good ideas throughout history. Though a modern citizen may look nothing like an early man, his behavior suggests otherwise. Just as early humans relied on each other to build shelters, tend fires, and hunt for food, today’s city dwellers are also interdependent in their own way.
They connect by sharing their thoughts and experiences on social networks, their knowledge and skills on useful platforms, along with their couches and cars. This shows that sharing isn’t just a buzzword; it’s an evolutionary movement. In order to bring a better quality of life to more people, we as humans are learning to buy only what we absolutely need, while borrowing and sharing everything else.
Sharing is a true symbol of human willingness to help each other and enjoy a sense of belonging and social inclusion. When we share, we bond with one another. Even when we give access to our possessions and charge money for them, we’re still practicing sharing. The real power of sharing lies in the fact that it’s easy to do, it is very cheap, it’s rewarding and fun – and it helps everyone.
During the Unlocking the Power of Belonging – Virtual Summit, thought leaders will meet to focus on feeling, understanding, and acting on the drivers to evolve and expand individuals and societies that thrive. If you’re a fellow new paradigm seeker and want to share and to contribute with your ideas and dreams, we would love to feature you. Join us and become a part of the world’s happiness community.