As we begin 2016, it’s a good time to take stock of the remarkable and disruptive changes we have witnessed in the last decade or so. I’m speaking of what’s been called the “sharing economy,” but perhaps the more appropriate term is the “democratized economy.” Just think of these innovations that allow the average person to wear an entrepreneurial hat, and also save consumers tons of money:
· Ride Services: Uber and Lyft have revolutionized the taxi industry, and from personal experience, it’s definitely for better, at least in Chicago. Wait times and fares are much lower, the cars are cleaner and the conversation is livelier. Now, taxi companies are joining the ride service networks rather than fighting them.
· Crowdsourcing: The rise of the crowdsourcing portal has changed the way ventures and projects get funded and how talent is hired. Originally, crowdfunding was based on donations, but in 2015, the SEC finally enable the 2010 JOBS Act and now the average person can buy stock in private companies via business crowdfunding portals. And businesses have gotten much more efficient by adopting the freelance model of staffing. There are now numerous websites that act as crowdsourcing hubs for freelance talent, such as writing and designing – anything from a company logo to a full advertising campaign to a tattoo.
· Hospitality: Airbnb and its competitors wrested away the monopoly on temporary lodging so long enjoyed by the hotel industry. Despite ferocious resistance from the mega hotel chains and, in many cases, city governments, the popularity of private temporary lodging is growing each year, and is especially useful in medium-sized towns that host large conventions.
· Lending: Peer-to-peer lending once seemed risky and exotic. Now, it’s a terrific way to borrow, or lend, money from/to ordinary folks as an alternative to banks, credit card advances and those awful payday lending companies. Experience shows that borrowers get lower rates and more flexible terms, individuals earn higher income from lending out their extra cash rather than stowing it in bonds or savings accounts, and that default rates have been remarkably low. Everyone wins, excepts the traditional lenders.
· Healthcare: Opponents hate to admit it, but Obamacare broke the insurance industry’s stranglehold on the American public when it came to pre-existing conditions. It’s comforting to know that the next generation won’ ever be exposed to the cruelty of having insurance coverage denied or rates jacked up because of pre-existing conditions. The fact that the government subsidizes the insurance for low- and middle-income folks, that coverage must meet essential needs, and that true competition exists for insurance policies, is extra gravy. No wonder millions of people have become insured for the first time since the new system was put in place.
· Biodiesel: We applaud those intrepid entrepreneurs who retrieve the cooking grease from local restaurants and turn it into high-quality biodiesel. Recycling the gunk reduces the need to drill for oil, frees up some corn to use as food rather than fuel, transforms a potential pollutant into green energy, and creates jobs in cities and towns across the nation. And if it kicks sand (even a few grains) in the eyes of the giant, polluting oil firms, so much the better.
There are other examples, but we’d like to know where you see the democratized economy heading next. Leave us a comment!