How the Sharing Economy is Impacting people’s lives
The sharing economy is projected to grow to $335 billion in 2025, with technology enabling the sweeping changes that collaborative consumption will bring with it. But how is the sharing economy going to impact people, business and environment?
Underutilised assets such as hardware, homes and cars are abundantly available — but why would people and businesses want to share these? Let’s have a look at the incentives and benefits that the sharing economy has on individuals as well as businesses.
Buying vs Renting vs Sharing
Buying: Let’s use the example of an adult living in a city who owns a car. We know that 90% of the time, a car is parked and unused; however, insurance, road tax, parking and most likely, the car payments have to be made every month. So, whether or not this car is used, the owner will have to make significant payments towards the vehicle.
Renting: You could of course choose to rent a car for the 10% of the time you need it, but it comes with the hassle, and mostly, cost. But most importantly, rental companies have thousands of cars that also sit idle for a significant amount of time. One of the biggest issues with this model is that of course, the thousands of cars that rental companies purchase also impact the environment and mostly benefit the businesses with the high cost of renting.
Sharing: Imagine if the adult living in the city could sign up to a technology platform that helps them rent their car out to people living in the same city. The platform connects the car owner with people who require a car and don’t own one. Let’s say the car’s underutilisation decreases by 50% and the owner is able to pay the insurance, the road tax and half of the car payments from the money paid by other users. The technology company provides the means to be able to easily share the car with card entry, driver’s insurance and added mileage payments.
Now let’s examine a hardware owner. A 21-year-old Gamer owns a Gaming PC with a Graphics Card, the gamer only uses his PC 25% of the time, the rest of the time, his PC sits idle. The majority of the impact to the environment has already occurred in the manufacturing and delivery process of the PC and its different components. The cost to the student for the PC was £1500. Our student realises that his hardware could make him some extra money by renting it out to an organisation that requires spare computing power in order to render short animations, deploy Machine Learning models or run a medical research project. Through a technology platform like CUDOS, our student signs up to the application that utilises his spare computing power when the PC is not being used for Gaming. Our student is then paid for the computing power by the organisation who is consuming it for the deployment of Machine Learning models.
Cost Saving Benefits
Let’s look at the organisation who needs spare computing power for Machine Learning Deployment. It’s a start-up, and they don’t have the funds to pay for the hardware upfront, but in order for the business to be a success, and deliver the best work to their clients, they need spare compute power desperately. The organisation signs up to CUDOS where they are able to purchase exactly the amount of computing power they need, contract-free — the deployment work is automatically shared out between 10 suppliers, and the company pays them a fee for the use of their hardware. The Start-Up is able to achieve their goals without having to buy, or rent computing power which can be costly, and the suppliers — in this example gamers — are able to buy their next game or keep the funds for a Graphics Card upgrade.
Who can Benefit from the Sharing Economy?
Anyone with hardware and spare computing power on the supplier's side — CUDOS like Airbnb or Uber provides the technology platform that seamlessly connects hardware suppliers with individuals and organisations who require spare compute power.
Cost-Saving Incentives
Low-cost shared-economy options save consumers and companies money while contributing significantly to individuals who own the asset. Think about everything you own, how often do you really use it? How often do you replace it? A newer model of your laptop? A new phone? According to one estimate, 80% of the items we own are used less than once a month. Technology platforms are enabling people and businesses to share equipment or assets easily and safely and providing a new revenue stream — but how is this contributing to a greener world?
The impact on the Environment
We’ve all seen the news headlines, celebrities using a private jet instead of a commercial flight. We all have a carbon footprint, and everything we buy contributes to this. (Want to calculate yours? Visit https://footprint.wwf.org.uk/#/)
Sustainability has become a huge focus in all areas of life and the sharing economy is set to have a massive impact on production and manufacturing, the more we share, the less impact we will have on the environment.
The Millennial and Gen Z Movement
In a recent study conducted by CUDOS, we learned that of 2000 consumers, 89% of Gen Z’s were actively utilising the sharing economy and 88% of Millennials currently take part in the sharing economy. Gen Z and Millennials are adopting a different attitude of ownership and the importance of ownership compared to the Baby Boomers. From sharing Netflix accounts through to utilising Airbnb and Uber, Gen Z’s and Millennials are moving towards different values. With 75% of the workforce comprising of Millennials by 2025, and Gen Z’s having a collective spending power of $44 Billion, the sharing economy is set to create a significant impact to individuals and users alike.
