The Sharing Economy

Don’t be surprised if you find the schools of Mumbai and Pune bustling with activity long after school hours, late into the night, on weekdays and weekends. On a typical weeknight at St Andrew’s school, Bandra, their busiest time will be at 9 pm where you’ll find at least a hundred people playing 5-a-side football on their four fields under floodlights.

As a result of the infamous space constraint in Mumbai, private players in the sports and entertainment space have started approaching schools to lease out their grounds and open spaces for building small-sided football and cricket turfs. Recognizing the economic opportunity, more schools and other educational institutions are jumping on the trend of sharing their resources to generate funds.

This trend, however, is not limited to the sports and entertainment industry. Many low income private schools are using this model to generate much-needed revenue. A lot of them are leasing out their classrooms and in-house resources to private coaching classes by the hour to conduct their sessions. Individuals and institutions are slowly but surely realizing the utility of the shared economy — a sure sign of what is to come for the future.

In the education sector itself, digital learning has become increasingly popular among secondary and higher education. The Byju’s learning app, which caters to test prep and class 6–10, has over 4 million subscribers and close 1,60,000 paid users. Ben Nelson, former CEO of Snapfish — one of the top e-commerce services in the world — is the founder and CEO of Minerva schools, an organisation looking to reinvent higher education using modern technology. Minerva offers four-year undergraduate degrees in five majors. All classes take place in a webinar format which means students can attend the lectures remotely.

If we look at successful models in the industry, Uber and Ola — the ride hail giants — are expanding rapidly. Ola has close to 90,000 app downloads and has expanded to just over a hundred cities nationwide while Uber is available in 26 Indian cities. So rapidly is the ride-hail trend for transportation increasing the world over, that the need to own a car will become obsolete according to Jamais Cascio, a futurist and a senior fellow at the Institute for Ethics and Emerging Technologies, in an article for the Business Insider.

Airbnb is another shining example of success in the sharing economy. This online marketplace for listing, finding and renting vacation homes has over 1.5 million listings in 34000 cities and 191 countries. OYO rooms — in more than 150 cities now — and Stayzilla — with over 30000 ‘stays’ — are the indian equivalent

Another pioneer in the sharing economy is Snapgoods. The Snapgoods concept was based on the peer-to-peer sharing of all kinds of products. A model that is in line with an Indian company called GrabonRent. The ‘Pay for what you use’ concept that the company works on has taken off in the Indian markets. GrabonRent was able to generate enough traction to fulfil 912 orders in the first 88 days since launch. They are looking to challenge the constraint of limited selection of goods, inconvenience and poor renting experience to make a large dent in the $19.5 billion market.

From the Indian industry perspective, similar developments in the sharing economy are taking place in real estate, hospitality, goods-selling/borrowing, fashion etc. But this will not come without its challenges. It can be difficult to build trust with customers via an online platform as the tech-savvy consumers of today focus more on affordability and convenience than on building loyalty with providers or social relationships with other consumers. Quality checks of products will have to be a thorough process as currently no regulations are set for the sharing service. The pressure to maintain a high quality service is high in a shared economy marketplace as it is difficult to maintain consistent customer service when the suppliers and vendors vary from place to place. The sharing economy has also given rise to an unconventional workforce which is short-term and more along the lines of freelancers and independent contractors than stable employees. Managing this workforce will be a challenge.

Beyond the above challenges, however, the benefits are huge. The shared economy companies help in the expansion of smartphones and therefore internet throughout their workforce, thus spreading digital literacy in society. Not only this, but they are also responsible for training their employees in language skills, soft skills and basic mechanic skills. With carpool apps and ride share services there will be less polluting vehicles on the road which will have a positive effect on the environment.

In conclusion, there is a huge opportunity in the sharing economy in India. India has already surpassed the USA as the country with the largest number of internet users (277 million) after China (721 million). However, the penetration of the internet is only 22% which signifies a huge growth opportunity for start-ups to awaken the sleeping giant.