The sharing economy is known by several names including collaborative consumption and peer-to-peer business. The sharing economy has caught the attention of legislators, economists, the media and other groups as it grows and develops.
If you weren’t using it, no-one would be
There is no single, agreed definition of the sharing economy however there are some common principles.
The ING International Survey Sharing Economy 2015 described it as utilising goods (such as a car, house or lawnmower) that would otherwise be idle or unused. Online platforms connect sharers, such as Airbnb for spare rooms and BlaBlaCar for ridesharing. For the purposes of the survey, only sharing economy activities that involve payment were considered.
However, others argue the intention of the participants is important in defining sharing, labelling it sharing if human interaction is the main motivation and “pseudo-sharing” if it is profit.
Well-educated and keeping watch on the financials
The ING survey found accommodation and cars were popular among sharers and that people participating tended to be younger (aged under 35), well-educated and open to trying new payment technologies.
Why are they joining the sharing economy? The most popular motivation was saving money, a conclusion that has been found time and time again.
But sharers typically earn only a small amount. The survey found median earnings of only €300 but some earned noticeably more, pushing the average to €2,500. In general, sharing supplements rather than replaces regular income.
“We are what we own”
Would you loan your spare room to a stranger? Your car? Would you hire a room or car from someone else?
Just as many feel there are positives to the sharing economy, many have reservations about it too.
The survey found one of the strongest influences is the simple reason of people disliking others using their property. Insurance worries and fears over the quality of items are also concerns.
Trust is also a key part of the sharing economy, with a Utrecht University study on willingness to lend finding that it was important to be able to check identities, get insurance and publicly report bad participants.
Research from the University of Warwick tells how online profiles are helping build trust.
Changing the way business operates
Although the market is still relatively small, growth in sharing could change the way some businesses operate.
Traditional hotel and short stay accommodation operators are already being challenged by people sharing rooms in their houses. Research suggests hotel operators in Austin, the capital city of Texas in the US, have seen revenue fall eight-to-ten per cent due to increased competition from room sharing. Prices in hotels fell. Most affected were less expensive and non-business accommodation.
Likewise, a study of car sharing in the US found people on lower incomes stood to benefit most by both having increased access to a car.
Hello crowd power
Sharing is an age old impulse – think back decades of borrowing a friend’s car. But super-charged by the digital revolution and the potential to benefit financially, the size of the sharing economy is tipped to rise significantly.
Like with so many movements, there are benefits as well as risks in taking part.
But the movement may allow some people to access items they previously could not easily get their hands on. It may mean you do not have to actually own a car to have regular access to the driver’s seat.