Centuries ago, our ancestors survived by sharing important resources such as food and clothing. Although we may never get all the way back to that type of lifestyle, the concept of a sharing economy is quickly becoming extremely popular.
Several companies have helped bring this relatively new term to life. In fact, the phrase “sharing economy” can only be traced back to approximately 2005. However, this has not stopped interested individuals and businesses such as Airbnb, Uber, VRBO and Lyft from pushing forward with much gusto. Due to this, it is easy to speculate that the sharing economy is not only here to stay but will soon present a very viable alternative to a long list of products and services.
For the uninitiated, a sharing economy refers to the trade or rental of goods and services that does not involve traditional methods such as renting a hotel room or calling a taxi company. Instead, members who join the applicable networks can offer their own services and products on a temporary basis in exchange for money.
A prime example of the sharing economy can be found within the Airbnb platform. This website enables homeowners to list their properties or extra rooms as short or long-term vacation rentals. Airbnb acts as the intermediary, and this is how the business makes a profit. Consumers are offered protection via Airbnb’s verification process, and homeowners who sign up as hosts are given access to millions of travelers worldwide. As an added bonus, Airbnb gives hosts the protection of their $1 million host guarantee.
Some cities, including Asheville, North Carolina, have attempted to get rid of vacation rental opportunities by imposing high fines on participating homeowners. However, for the most part, Airbnb appears to have one of the best track records as a sharing economy platform.
Other business models such as Uber have attracted a lot of positive and negative legal attention, and there are most likely going to be several legislative changes in the future. Uber is the latest in a string of ride sharing companies, including Lyft and ZipCar. The FTC is expected to eventually impose new rules upon these businesses, and Australia is currently facing many questions regarding Uber’s tax minimization methods.
Even if the government of each respective nation becomes more involved in the sharing economy, it is still expected to maintain a place of growing prominence. After all, the overhead is naturally much lower, and this will allow participating companies and individuals to still earn a worthwhile profit. Additionally, it is vital to consider just how beneficial these opportunities can be for consumers and owners.
Our resources are becoming tighter every day due to issues such as global climate change, and many people are attempting to downsize in order to save money and be less destructive to the environment. Lisa Gansky, who wrote “The Mesh: Why the Future of Business is Sharing,” discussed the expected impact of the sharing economy in a popular Ted Talks session. In a nutshell, Gansky expects the sharing economy to become a major component of the business world, which will impact the way we access everything from music to cars. If Gansky is correct, and all signs seem to indicate that she is, this is the perfect time for consumers, businesses and legislators to help shape the future of the sharing economy. It is unrealistic to expect a minimal level of government oversight to remain in place due to two major factors: consumer protection and taxes. However, it does seem possible for insurance and taxes to become a component of sharing without zapping the allure out of this entire concept.
In China, for example, Kandi Technologies has recognized the need for temporary car rentals at an inexpensive price. For approximately $3 per hour, consumers can rent a car from what is basically a large vending machine. This gives people the ability to use a vehicle as needed without putting their financial resources into actually purchasing a car. Kandi Technologies has found a way to make a profit with this business model, and other sharing economy companies will almost certainly do the same.
Another major perk of the sharing economy is that it encourages people to trust and connect with others in a way that has not really been seen since the urbanization of America. Instead of dropping your dog off at a certified kennel or daycare facility, you can turn to DogVacay to find a nearby dog sitter. TaskRabbit connects members with local handymen, and LendingClub even gives individuals the ability to borrow money from personal investors as opposed to a bank. When you combine lower prices, reduced waste and the more personal, neighborly approach of the shared economy, it makes sense that so many of these platforms are thriving. Overall, this just may be one of the best solutions for minimizing the impact of financial issues and the drain that the overproduction of vehicles and other products has placed upon the environment.