2014 is the year when the sharing economy goes mainstream. Therefore the growing popularity of Airbnb and Uber has made us question what the sharing economy means.
So what is the sharing economy? It is a socio-economic system built around the sharing of human and physical assets including the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations.
Travel seems to be first interaction most people have with the sharing economy, ie, Airbnb. People put up their spare rooms, houses or apartments for rent as an alternative to hotels and other traditional paid lodgings. In the world of transportation the corollary is an app like Uber, or Lyft, which have taken car sharing to another level.
“The sharing economy has existed for a long time on a small scale, as part of the ‘informal economy’. Simple examples are multiple parties sharing a car to a party, borrowing your friend’s DSLR camera for a special event or letting a friend crash on your sofa,” observes Tushar Agarwal of Spacious, a platform for locating co-working office spaces.
“The rise of the formal sharing economy as we see it today has been enabled by the ability of technology to give us real-time information on the availability of under-utilised assets that exist outside of our immediate network, and build trust around who you are transacting with and the quality of the goods or services in question. This has been formalised into the business models of some of the largest technology sharing economy companies, formerly start-ups, which we see today such as Airbnb and Lyft.”
Clearly, the sharing economy is changing society and various parts of its economics. And it is expanding. More and more of us are going to have first hand experiences of the sharing economy and may become active participants in it.