The term Collaborative Consumption or Sharing Economy was first coined in 1978. However, it didn’t really become a well known term until 1995, as eBay was launched.
The uprise of eBay led to strong foundation of the sharing economy that would eventually shape the global markets two decades later. From the inception of eBay till now, sharing economy has penetrated various sectors such as transportation, property, fashion, education, healthcare and now consumer goods.
While sharing economy is still in its infancy, the journey has been a promising one, so far. With multiple global players stomping their authority and many others emerging as national winners, here at Crowdholding we dissect and pinpoint the reasons below for the up rise of the sharing economy concept.
- Increasing accessibility to self-employment opportunities
Collaborative consumption offers economical benefits for everyone involved. With the proliferation of online jobs and ride-hailing providers such as Ola, Rapido, Quickride and others, people can now work from the comfort of their home and use their owned vehicle to generate an extra source of income. People can also sell unwanted pre-owned items on portals such as OLX and eBay. This enables the seller to make some money on commodities that were otherwise futile.
2. Embeds a sense of trust in the community
Sharing economy’s contribution to societal concerns isn’t just restricted to the environment. One very important aspect of sharing economy is instilling trust amongst community members. Earlier the apprehensions of having unfamiliar faces as guests soon were overcome by strong driving principles that led to the creation of the Airbnb community. Many sharing economy platforms, such as ridesharing apps and Airbnb, have built-in ratings and reviews that help keep providers and consumers honest. And some platforms use their influence — and the shared resources of their participants — to help those in need. These trust-building efforts help sharing economy participants see one another as equals, building constructive relationships where none existed before.
3. Higher savings with the same lifestyle
This isn’t rocket science, is it? The Sharing economy has provided means to have a desired lifestyle without burning a hole in your pocket. So, if you are looking to make your apartment a home, startups like GrabOnRent is your Santa Claus, providing a wide selection of home furnishings and appliances on rent. Having the desire to wear designer clothing, Flyrobe can be your personal designer, or the adrenaline rush of cruising on a Ducati around the city can be realised through ride sharing. Sharing economy has seen a hike in more and more platforms providing rental options to users without sacrificing on quality.
4. More business opportunities
Are you serious? It would never work.” Those were the words when I had first come across Airbnb, an idea that sounded ridiculous, superfluous and that was destined to crash and burn. Years later it’s dominating the travel industry with more and more people choosing homestay over the luxuries of a hotel. Another startup allows its users to preserve their umbilical cord stem cells that can be used by the donor, his/her family and the community (MIND = BLOWN!). Despite its increased prominence and continued growth, sharing economy won’t completely displace traditional economic networks anytime soon. It’s more likely to force existing industries to become more like collaborative platforms that challenge them with potential benefits for everyone involved.
5. Lower ownership
Not too long ago ownership was seen as a status symbol. The more assets one owned, the more wealthy one seemed. All that seemed to change after the economic depression of 2008. Assets became a liability and ownership became scarier. Today, if you can get more of what you need through the sharing economy, you may be able to live a leaner existence that requires fewer valuable possessions — and fewer worries. For instance, if you live in a city and you only need to drive a few times per month, a car may be unnecessary. Not having to deal with car loans, insurance, maintenance issues, and potential thieves could be a big benefit. Likewise, if you can rent or share expensive tools or equipment that you only use for special projects, your tool shed or garage won’t be such an attractive target for thieves.
6. Easier access to capital
For any business, getting access to traditional means of financing is not just a hassle but an obstacle too. Most banks often find startups and small businesses as risky. But with the increasing adaptation of sharing economy, crowdfunding became an easy and convenient way of raising funds by connecting people in need of money with those willing to give. For creative types, using a crowdfunding platform like Zetto and Faircent is less time-consuming — and offers a better shot at success — than applying for grants through government or non-profit arts organisations. And for those who contribute funds, the rewards can range from the emotional satisfaction of supporting something they care about, to an equity stake in a potentially successful venture.
While these are still early days in the sharing economy and it is still forming, the potential it holds is second to none. As technology takes giant strides forward reducing processing time, increasing capacity and a wider interconnected network, it’s only fair to assume it would add on to empowering communities as a whole with sharing economy at its centre. The only constant is change and we are at the forefront of witnessing the greatest change in consumer trends.