Here’s how a business participating in a sharing economy is defined
What exactly is the sharing economy?
Also known as the peer economy, the sharing economy began to make it’s appearance at the beginning of this century when new businesses models emerged inspired by sharing as a modality of economic production.
It’s detractors have on more than one occasion announced it’s untimely death, however this is a business model that has shown great flexibility of supply and demand.
It is based on the premise of I NEED – YOU HAVE, it takes advantage of underused capacity of assets that are matched with someone’s need, classic examples are companies like Uber or airbnb.
Additionally it’s also important to understand that this allows consumers to access goods or services when they are needed, rather than having to purchase them and have them sitting there unused, and this alone is a game changer.
Finally it allows consumers to do more, with less. This collaborative consumption has reinvented traditional consumer behaviors. I used to shop around for the best hotel rates, and sometimes still do, but on a recent trip to Bulgaria, I wanted a more immersive experience, and looked at Airbnb options that would allow me to “live” the city of Sofia more authentically.
I found a great place – an artists apartment in an old Soviet era building, chock full of historic sites within walking distance. For the artists, it was a way she was supplementing her income and it fulfilled my need.
You can see from this example that it is a global phenomenon, not limited to evolved economies, we are able to share efficiently and globally through the magic of technology.
How is a business participating in the sharing economy defined?
The main business idea must revolve around unused or under-utilized assets whether it’s for monetary or non-monetary benefits – yes there are nonprofits also participating. Other values are transparency, humanness, and authenticity that inform short and long-term strategic decisions.
The business should be built on distributed marketplaces or decentralized networks that create a sense of belonging, collective accountability and mutual benefit through the community they build. And this is not limited to accommodations but it also includes big ticket items such as private airplane travel – companies like SurfAir and Flightshare.
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