As recently as 2004, a scholar from Yale Law School, Yochai Benkler, said that he could not come up with many instances of sustained sharing economies outside of information technology and carpooling. Even a decade ago, open-source software and sharing rides to work were common.\
What’s really striking about that statement? The Brookings Institute reported a sharing-economy value of about $14 billion just a decade later in 2014. Even more, they predict that the value of social sharing will boom to over $300 billion within another 10 years. It’s interesting to see how the grown of the sharing economy has impacted modern life in a few short years and which industries it impacts the most.
What’s Driving the Sharing Boom?
The idea of sharing is hardly new; however, it’s also telling that Benkler came up with the examples of IT and carpooling. That merger of technology and ride sharing has created the car-sharing and ride-sharing enterprises that have made such a significant contribution to the modern social economy. Within just six years, Uber grew so quickly that it gained more value than such traditional transportation companies as Ford, General Motors, Avis, and Hertz. Besides Uber, there have been companies like Cars2Go that allow people to offer rides or lend their personal vehicles. Obviously, sharing has greatly impacted transportation.
Why has ride- and car-sharing grown so popular? Vehicle owners and drivers get a chance to earn some income from spare assets and time; riders get to access transportation in a way they find economical and convenient. Certainly, taxis and car rental companies have been around for the long time. It’s the technology that now allows these sharing companies to enable scheduling rides and making payments through mobile apps. The demand for these kinds of services may have always existed, however, newer tech has allowed these more decentralized, sharing type of companies to offer customers an alternative.
The Sharing Economy Doesn’t Just Impact Transportation.
In addition to transportation, technology has also empowered the growth of the sharing economy in many other industries. For instance:
- Airbnb allows guests to stay in private residences instead of hotels.
- P2P lending platforms connect individual lenders and borrowers without having to use a traditional finance company or bank.
- In Brooklyn, a blockchain tech company allows people to share excess solar power with their neighbors in exchange for payment.
As clever entrepreneurs see more efficient applications of social sharing, the types of industries impacted is bound to grow. While most of today’s notable sharing companies have focused upon consumers, there’s been recent growth in the B2B market as well. Of course, many companies have begun to use services like Uber and Airbnb for business travel, so this is an example of a service that started out to appeal to consumers and then extended its market to business customers.
Another popular example of B2B sharing services include co-working spaces. For instance, a building may have unused space that they can rent out to a number of smaller companies to share on an as-needed basis. One startup is called Yard Club, and they provide a platform that allows construction companies to easily rent out temporarily unused equipment to another company that has a need for it. It’s sort of like a Car2Go for construction equipment instead of for personal cars. In any cases, many businesses can benefit from the sharing economy as a good way to benefit from underused assets.
What’s the Future Impact of the Sharing Economy?
This article already mentioned a prediction that sharing services could grow to $300 billion within the next decade. The impact of the sharing industry should extend beyond a dollar value though. Social sharing offers consumers, businesses, and social sharing organizations a way to maximize efficiency and meet consumer demand when it makes sense to do so.
For instance, sometimes Airbnb isn’t cheaper than all other temporary housing alternatives, but the additional choices that it offers may appeal to some travelers. Some travelers may still choose a cheap motel because they just need a place to sleep or an expensive hotel because they want to amenities. In some cities, taxis may still offer cheaper and more trusted alternatives to ride sharing.
Benefits of social sharing can include lower prices, improved convenience, or even just additional choices. Social sharing probably won’t put the core, traditional providers of services out of business. There will still be taxis, hotels, and traditional rental companies around in 10 years. On the other hand, social sharing offers an alternative to traditional services, so consumers or business buyers can pick and choose the way they want to maximize the value of their transaction.