The sharing economy has become one of the fastest-growing business trends in history, with more than $23 billion invested in companies operating on a share-based model in 2010. It’s impossible to estimate the scale of collaborative consumption because most of these enterprises are private.
There are, however, several pieces of evidence it will have a significant impact on society
- With a combined market value of $103 billion, Airbnb ($31 million) and Uber ($72 billion) is the world’s 38th wealthiest countries.
- In 2016, 44.8 million adults in the United States used the sharing economy, with that number expected to climb to 86.5 million by 2021.
- According to McKinsey, 162 million people, or 20-30% of the workforce, are suppliers on sharing platforms in the United States and Europe alone.
How Does the Sharing Economy Work?
Attempting to describe this economy would be a disservice to the phrase. The modern industry is a dynamic economic principle that is always evolving.
It’s based on the idea that mutual parties might benefit from a skill or asset that is underutilized. This value exchange is facilitated via a shared market, collaborative portal, or peer-to-peer application.
The includes aren’t a new concept; many distant settlements thrived on the same basis of bartering. Because of the internet’s availability and mobile technologies, managing share-based transactions has never been easier.
While the term “sharing economy” is most widely used, it refers to a broad range of economic systems, including:
1) Collaborative Consumption/Economy
2) A peer-to-peer economy is one in which people trade products and services among themselves.
3) Gig Economy (freelancing)
4) Crowdfunding (sometimes called crowdsourcing) is a means of raising funds from a big group of individuals.
What Is the Sharing Economy’s Impact?
As a result of their increased efficiencies, these companies may be able to pass on value to their customers, suppliers, and distributors.
Traditional businesses are being impacted by the economy, and many old brands may suffer if they do not adapt to the new reality.
Transportation
Uber’s rise in the transportation industry is one of the greatest examples of this economy’s impact on a traditional industry. Uber and other ride-sharing services offer a cost-effective, safe, and fast alternative to conventional modes of transportation such as public transit and taxi cabs.
Uber serves consumers’ transportation needs while offering a better experience than traditional modes of transportation by leveraging an efficient smartphone application and a network of vetted drivers.
better experience than traditional modes of transportation by leveraging an efficient smartphone application and a network of vetted drivers.
Top Transportation Sharing Economy Brands include:
- Uber’s market capitalization is 72 billion dollars.
- Didi’s estimate: $50 billion
- Lyft has an 11 billion dollar market value.
Consumer Goods
As per PWC research, 86 percent of Americans who are familiar with the sharing economy say it saves money and is more efficient and convenient than conventional methods.
Three of the most significant factors to consider while purchasing consumer goods are affordability, convenience, and efficacy. As a consequence, it’s no wonder that share-based brands dominate the consumer products market.
People can purchase and sell old and new stuff directly through their interface, and the goods are delivered to their door. This gives customers greater leverage and allows them to make more cost-effective, quick, and efficient purchases.
Top Consumer Goods Sharing Economy Brands include:
- eBay has a market capitalization of 36.8 billion dollars, whereas Etsy has a market
- capitalization of 5.2 billion dollars.
- – $800 Million to Rent the Runway
Professional and Personal Services
In the personal and professional services arena, the advantages of the sharing economy are best shown. Professional or personal services are jobs that need specialized knowledge, skills, experience, credentials, or training, such as advertising, accountancy, or plumbing. This is also known as freelancing, gigs, and other current phrases corresponding to short-term labor in the sharing economy.
Top Profession and Personal Services Brands in the Sharing Economy:
- Fiverr has a market capitalization of 351 million dollars.
- $168.8 million-plus on Upwork
- TaskRabbit is worth $50 million and up.
Healthcare
Healthcare: That may explain why venture capital funding for digital health firms jumped 10.2 percent in the first quarter of 2018 compared to the same period last year. Even though the fact that the sharing economy has yet to truly take root in the healthcare business, many experts believe it will be the next frontier for sharing economy.
Shared-based solutions are already being used in other industries to overcome the limitations of the traditional health systems, such as costs and resources. From the internet to group consultations, the sharing economy is bound to transform the health sector.
For example, medical equipment is expected to remain underutilized 58% of the time, resulting in storage and maintenance expenditures. As a result, companies like Cohealo are developing technology that allows hospitals to share medical equipment with other hospitals, saving money and increasing the value of the equipment.
Top Healthcare Sharing Economy Brands include:
- $160 million for Doctor On Demand
- Cohealo is worth $9 million and up.
Advantage of industrial sharing economic
Companies benefit in a variety of ways from the sharing economy, as long as they are willing to adapt to changes and invest capital and labor in growing or reconfiguring their company model.
New business models:
As the example of Airbnb, Uber, and Netflix demonstrate, the sharing economy allows established industries to mix. Even if markets are not affected, the sharing economy offers the benefit of expanding economic domains and reaching clients who would not have been interested in the company’s offerings previously.
Efficient technology:
By meditating goods, services, or data via matching applications, personnel costs or commercial property costs can be eliminated.
User data access:
Companies may gather a lot of useful information about the platform’s users by having customers communicate online. This information can be used to improve and adjust services to the demands of customers, but it’s also valuable as a starting point for providing targeted advertising.
Disadvantage of Industrial Sharing Economic
Small and medium-sized enterprises, as well as large corporations, suffer from the disadvantages of the sharing economy because they refuse to join the digital economy or lack the necessary capabilities or economic ability to adapt to new economic systems.
Disruption of established industries:
Sharing economy platforms are diverting a large number of customers away from established sectors through the use of cheaper private providers. The taxi sector, for example, is unhappy with Uber, the hotel industry with Airbnb, and major film distributors with Netflix.
Fewer sales:
Used items are resold, while other items are shared, resulting in lower demand for new products and fewer sales.
Customer requests have been changed:
As items are utilized for longer periods and with more intensity, our perceptions of what constitutes a good product evolve. Customers are increasingly demanding long-lasting, easy-to-repair goods. As a result, disposable products lose their appeal, and manufacturing businesses must adapt to the changing attitudes of consumers who buy them. However, in the end, this may be beneficial to the environment.
Read More: Einride, the Swedish autonomous trucking startup
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