If you own a smartphone, chances are you’re an active participant in the sharing economy. This model of economic exchange has given rise to many of the services we now consider to be fundamentals of our digitally-driven, urban lifestyles such as Airbnb, Uber, and eBay. The basis of sharing economy is simple: by using the internet to expand our networks, the needs of one consumer can easily be met by another community member.
The sharing economy succeeds by making use of the stuff we have lying around (or our underutilized assets) available to others. These kinds of peer-to-peer exchanges keep a cap on prices by side-stepping commercial retailers, making things cheaper and more cheerful for everyone.
What’s more, with this new approach to exchange and consumption, we’re seeing a shift away from traditional models. The individual nature of the sharing economy means that trust is the key currency. Where large companies rely on regulation and reputation to build relationships with consumers, peer-to-peer exchanges essentially ask buyers and sellers to trust each other.
The sharing economy offers a localized alternative to the commercial market. And as a result, today’s biggest retailers are being forced to work harder than ever to keep up with consumer needs.
A new flex(ibility)
In the context of the sharing economy, many are choosing to make personal assets the basis of their own businesses. As a result, self-employment is becoming more attractive and attainable. We can see one example of this with Uber, which has made flexible working conditions an important part of their offering. In this model, drivers can use their own vehicles to work as much or as little as possible.
Using your own personal assets to direct your career creates opportunities for more flexibility, independence, and ownership. Something as simple as a laptop can be the tool that connects providers with the sharing economy. For these digital nomads, the office is a thing of the past, while coffee shops and co-working spaces are regular dwellings.
For consumers, the sharing economy makes everyday life more affordable. Extensive and well-distributed participation on the supply side of sharing economy keeps prices fair, as well as eliminating the need for people to own all of their possessions. Mooch, for example, connects local people to lend and borrow everything from tools to tuxedos, avoiding unnecessary spending on something you’ll only use once. No need to spend to stay on trend—borrowing is the new black.
Empowering entrepreneurs and stimulating startups
As hubs of creativity and innovation, startups are key to a dynamic modern economy. However, too often entrepreneurs are limited by a lack of assets, capital, and support. The sharing economy makes life easier for startups and aspiring entrepreneurs, so that all you really need is an idea and the internet.
Typically, one of the biggest issues facing startups is the reluctance of banks to fund risky ventures. The sharing economy has helped to break down this barrier, where ever-expanding interconnectivity is giving rise to the practice of crowdfunding. These online platforms connect people who need money for their project with those who are willing to invest on a peer-to-peer basis.
Crowdfunding sites undercut the tedious dependency of startups on banks and governments. Instead, the possibility of collaborative investment takes the pressure of entrepreneurs and nurtures grassroots business ventures. Leading platform Indiegogo invites potential patrons to “fund the next big thing” in the tech world—and it’s worked. The platform has raised over $1 billion across all projects since it started.
Painting the town green
We’re all well aware that urban settings and lifestyles have led to a variety of environmental problems. By pooling resources, the sharing economy works to offset some of these issues, reducing waste and making our spending habits more sustainable.
Across several different industries, the environmental benefits of the sharing economy are clearly visible. In the world of fashion, the expansive second-hand market is accessible through platforms like eBay and Depop, turning trash into cash. By giving old clothes new life, consumers are helping to cut emissions generated by goods production and waste reduction.
And it doesn’t stop there. The sharing economy also has a seat at the dinner table. Communities are working together to combat food waste with apps like OLIO, which facilitates exchanges of excess food products or leftovers.
In transportation, rideshares provide an important example of environmentally friendly solutions driven by the sharing economy. BlaBlaCar is a carpooling app that connects drivers with passengers and drivers who are willing to split on the price of gas. At a time when transportation costs are burning holes in our wallets and the ozone layer, the benefits of carpooling apps cannot be overstated.
What’s next for the sharing economy?
As networks and awareness grow, many major players on the sharing economy scene are beginning to expand into new industries. Airbnb now offers unique travel experiences designed by knowledgeable locals. Meanwhile, Uber has taken the leap into the food and drink sector with the launch of UberEats.
Of course, traditional retail models are still a major part of modern consumer culture. In this context, it seems unlikely that the sharing economy will ever completely take over. Nonetheless, communities are becoming increasingly convinced of the advantages of collaborating when it comes to both work and play. With the prospect of achieving community trust, labor flexibility, business opportunity and environmental sustainability, it seems that sharing really is caring.