What Exactly Is The Sharing Economy?

When we took our social lives online, we not only transformed the way we connected with one another on a personal level, but we also completely reinvented the way that we do business. Through social platforms and algorithms, social sharing companies became the new go-to way for consumers to enjoy a product or service. From AirBNB and its home-sharing platform to Uber and its ride-sharing app, consumers from around the globe have started interacting with one another in order to get what they want and need.

These businesses have become so powerful, they have created what’s been dubbed “The Sharing Economy.” So what exactly is the sharing economy, and how can you get a piece of this successful pie?

Characteristics Of The Sharing Economy

Throughout its infancy, this economy has been called many things. Whether being referred to as the peer-to-peer economy or the collaborative economy, ultimately the sharing economy can simply be defined as an economy in which goods, services and products are shared between two groups of people. However, the reality of this economy is much more complex than that. The sharing economy is comprised of both physical goods and intellectual resources, and it connects groups of people that otherwise may never have done direct business with one another. It’s lowered the price of many goods and services, while also making these same products and resources more accessible to the masses.

Related: Why Marketplaces Go Beyond Just “Software”

The characteristics of the sharing economy include:

  • People are the active participants in the economy and ultimately drive it forward.
  • Goods or services are co-operatively produced or shared within it.
  • Value is central to the economy, but is not always measured in financial increments.
  • Efficient systems are used to share goods and services through the economy.
  • Open knowledge, transparent governance and accessibility are central components of the sharing economy.
  • The greater good is often a pivotal part of any sharing economy business.

Examples Of Success In The Sharing Economy

When it comes to the sharing economy, there are obvious candidates for the most successful businesses. Airbnb, Uber, and Lyft are often the first examples that people think of when it comes to major players in the sharing economy. However, there are plenty of other companies that are making their mark by taking advantage of this collaborative approach to business.

Care.com has become a household name for many growing families who rely upon childcare in order to work and socialize. Through this platform, child care professionals such as nannies and babysitters are able to provide their information while families in need are able to search for a candidate who works for their unique situation. The company uses a series of algorithms in order to connect its users and foster beneficial relationships.

Neighborgoods is a company that has taken the old tradition of borrowing a cup of sugar from a neighbor and modernizing it to our interconnected, social world. Through this company, users can request to borrow items like a specialty tool or appliance from their local neighbors. Through the platform, people are able to connect, share resources and ultimately save money.

Related: Sharing Economy Rentals: The Growth And Future Of Travel

In nearly every niche sector, there’s currently a company that is taking advantage of this new sharing economy.

How Can Entrepreneurs Capitalize On This New Economy?

Any entrepreneur who wants to get started in the sharing economy needs to recognize the importance of data. Accurate, relevant data about users is absolutely critical to developing intuitive algorithms that will match users with the goods, services or resources that they need from your business. With the right algorithm in place, your new company can help facilitate these relationships and become an integral part of the consumer experience.

The aptly-named sharing economy is all the rage right now, but don’t expect this to be a trend that fizzles out with time. Social networking has weaved its way into our lives, and it is now an integral part of the fabric of our communities. This means that the sharing economy — and the businesses that utilize it — are here to stay.

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