A rose by any other name would smell as sweet. Likewise sharing economy, collaborative consumption, peer economy, access economy and a person can call this by any name of his/her own choice, the result is the same sweet concept. Yes, this is based on the great concept of 'sharing is caring'. This can be considered as a hybrid between ownership and donation of gifts. But how does it work or who makes it work?
In simple terms Sharing Economy refers to sharing of access to goods by consumers and is facilitated by community services that are operated online. So the key factors that are essential in the smooth running of share economy include:
1. Consumer behaviour itself which changes here from ownership to sharing 2. The electronic media / social network that link the sharing consumers and 3. Mobile apps that enable the use of Sharing Economy extremely simple easy and convenient for the consumer.
Sharing economy has revolutionised and transformed various fields much to the convenience of millions of customers worldwide.
The idea of sharing economy gained momentum in the late 1990's when online trading venues like e-bay, Craig list, etc. gained popularity as they provided users with the unique opportunity to buy/sell items that are no longer used or in other words turning your junk into cash. Later on the concept of renting as against owning gained momentum with the advent of companies like Lending club, Task rabbit, etc.
The company which has become a big success by taking the transportation industry by storm with the idea of sharing economy is Uber. It became a hit not only in its country of origin, the US but in many other countries around the world. Any car owner with the Uber mobile app can drive his/her car as a taxi and generate income from an otherwise may be under-utilised asset. At the same time, this ride sharing drastically reduces the cost for the customer. Close behind Uber, in the same field is Lyft operating on the same concept with the mobile app.
Another company is AirBnb which is beginning to have impact on the hospitality industry in a similar vein. This enables anyone owning a house or apartment to rent out to the needy who are weary of or do not wish to stay in hotels. Casaversa is a company though small that might pose a challenge to AirBnb. This company basically deals with home swapping. There are several different companies though small operating on the concept of sharing economy in USA and other countries, in various fields helping thousands of people in need.
Skillshare is a website which offers online education in various fields for a monthly fee of $10 to the eager learner and anyone can teach their by downloading and signing in to the app. This is the most unique way in sharing education. Other examples that are noteworthy are 'Getaround' for rental cars, ‘Timebank' for trading skills, 'Pivot desk' to find work spaces for small teams on month-month basis.
Now let us see who can be called the pioneer in sharing economy? When it was first introduced? Surprisingly this concept was used 40 years ago when a company called Legal Shield (An American Corporation) was started. The costly business of hiring an attorney changed with the concept of sharing consumption. LegalShield has 1.4 million memberships that cover over 3.5 million people. These people pay a monthly membership fee of about $20 for which they receive unlimited legal access to reputed law firms which are partners of Legal Shield. The lawyers are paid a steady monthly income regardless of the time they spend on a client for a case. So the lawyer strives to resolve the client's issues in the quickest and most effective way possible. Essentially this satisfies both the client and the lawyer and both are satisfied monetarily.
This concept of sharing economy has thus insinuated itself into our daily lives, transforming and making our lives convenient, at the same time giving a commendable lift to our economy too. On the other side of the same coin, as the Harvard business review points out, the term is inappropriate after all as the consumers end up paying for someone else's services/ goods in effect. Thus there are many who question the genuineness of the concept. Those who oppose opine that under cover of this attitude of making our lives convenient and connected, this collaborative concept is actually taking away means of livelihoods for millions while amassing the wealth of the elite technology providers. This concern is yet to be addressed satisfactorily.