What had so far been a hot topic of debate over the past few years has now bloomed into a new trending concept for some, and a way of life for some others. The concept of course, had been doing the rounds for quite some, until finally being accepted and practiced. Now, it has become worthy of being considered as a growing trend, and being assessed and evaluated in terms of future prospects. I’m talking about the so-called “sharing economy”, that benefits the users or the consumers, the service providers as well as the intermediates. According to a recent report by PwC, the global size of the sharing economy in five key sectors was approximately US $15 billion in 2014 and it is expected to reach US$ 335 billion by 2025. It definitely seems like it’s on its way towards becoming a common thing for people.
Robert Vaughn, an economist at PwC said, “ The sharing economy is a result of long-term mega trends colliding together, driven mainly by advances in technology, resource scarcity, and social change.” Couldn’t have put it better.
The two most used or most popular (of late), representatives of this particular concept are Uber and AirBnb. Their success is not just a passing fad or a fantasy. They mean business and a new form of business at that. Now, what is it that help these companies achieve more than their other counterparts?
A simple explanation could very well be the fact that sharing, makes everyone’s lives easier. Both AirBnb and Uber revolve around this fundamental fact, of sharing and rational living. It basically helps everyone involved. They have gone as far as influencing the minds of more and more people to use and enjoy something without having to own it. Whether it is by sharing rides like as in Uber or renting something for extra income as in AirBnb, people have accepted them as a way of life.
What do they teach us?
Let’s take the case of Uber for the sake of arriving at an “economic rationale”. As rightly put by Julio Alonso, “ with two assets without any technology, it is difficult to seize prey; free time individuals who are not professional drivers and their private vehicles.” This holds good in case of a number of other assets as well and for the same reason, AirBnb and Uber have paved the way towards more such rational sharing of idle assets such as garages, commercial buildings, offices and even industrial plants. This could be applied to even a retail store, where it could be rented for a few hours. This means that the trend is fast growing in diversity as well with new kinds of industries and platforms pitching in.
Both these companies have taught us how even with tiny bits of inefficiencies initially, or with tiny gaps while implementing technology, a whole new business model can be created and transformed with very little costs involved. An already existing or rather obsolete concept was given shape and wings to fly in a little time and with little resources. It shows how to make use of scarce resources and put them together to make a brand new idea. One that has the potential to bring about an industrial revolution I would say. Funny, how we always learnt throughout our academic lives about rational usage of scarce resources and everything, and how long it took us to finally arrive at a solution. It was like the solution was always in plain sight, waiting for us to see it.
This is just the beginning of sharing economy. AirBnb and Uber can probably be said to be the pioneers in this regard and they have laid quite a strong base for us to build on and follow their paths. Hopefully, in the future, we’ll see more of shared spaces and assets and yet, people living in harmony and peace.