The sharing economy is one of the fastest growing business trends in history, with investors dumping more than $23 billion in venture capital funding since 2010 into startups operating with a share-based model. Because many of these businesses are private, it’s impossible to know the actual size of the sharing economy.
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What Is the Sharing Economy?
The sharing economy is an economic principle that is constantly evolving. In the very simplest terms, it’s the use of technology to facilitate the exchanged access of goods or services between two or more parties.
It’s derived from the notion that mutual parties can share value from an under-utilized skill or asset. This value exchange occurs through a shared marketplace, collaborative platform, or peer-to-peer application.
The sharing model isn’t a new concept—as many rural communities thrived off the same idea via bartering. However, thanks to the accessibility of the internet and mobile technology, managing share-based transactions has never been easier.
What Is the Impact of the Sharing Economy?
The sharing economy has a history of disrupting traditional business sectors. The lack of overhead and inventory help share-based businesses run lean. The increased efficiencies allow these brands to pass-through value to their customers and supply chain partners.
Traditional industries are being affected by the sharing economy—and many traditional brands will struggle if they do not adapt to the changing landscape.
Uber’s ascension in the transportation industry is one of the best examples to illustrate the effect of the sharing economy in a traditional sector. Uber and other ride-sharing services offer an affordable, safe, and convenient alternative to traditional transportation options such as public transit or taxi cabs.
PWC research suggests that 86 percent of U.S. adults familiar with the sharing economy say that it makes life more affordable and 83 percent also agree that the sharing economy is more convenient and efficient than traditional methods.
eBay is one of the pioneers of the peer-to-peer marketplace. Their innovative platform allows users to buy and sell used or new items through their interface, and have the goods shipped directly to their home. Consumers can browse a variety of products at custom price points, in various conditions, and with different guarantees. This empowers the consumers and provides them with a more affordable, convenient, and efficient way to purchase goods.
Professional and Personal Services
The benefits of the sharing economy are best illustrated in the professional and personal services space. Professional and personal services are defined by work that requires special knowledge, skills, experience, certifications, or training like copywriters, accountants, or plumbers. In relation to the sharing economy, this is also referred to as freelancing, gigs, and other trendy terms equating to short-term labor.
Top Sharing Economy Brands in the Professional and Personal Services Space:
- Fiverr: $351 Million
- Upwork: $168.8 Million +
- TaskRabbit: $50 Million +
The healthcare industry is expected to generate annual revenues of $8.7 trillion by 2020. Although the sharing economy has yet to really take hold in the healthcare industry, many experts suspect it to be the next frontier for collaborative consumption.
The limitations of traditional healthcare systems, expenses and resources, are factors that we’ve seen mitigated in other industries through share-based methods.
Therefore, share-based startups like Cohealo are helping hospitals save money and increase equipment value by developing technology that enables hospitals to share medical equipment with other healthcare facilities.
What Is Next for the Sharing Economy?
Technology has helped the sharing economy advance to where it is today—and, the trend should only continue as we become more connected digitally. While we’ve seen how dominant collaborative consumption can be in industries like transportation, consumer goods, and services, many other traditional sectors will soon experience changes because of the sharing economy.