The term Collaborative Consumption or Sharing Economy was first coined in 1978. But it wasn’t till 1995 when eBay was launched did Sharing Economy gain momentum.
The uprising of eBay led to the strong foundation of the sharing economy that would eventually shape the global economy and markets two decades later. From the inception of eBay till date 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 so far has been a promising one. With multiple global players stomping their authority and many others emerging as national winners, we decided to dissect and pinpoint the reasons for such an uprising.
- Decreasing environmental effects.
It’s no secret that increasing temperatures are real and they possess a serious threat to our entire ecosystem (Well, unless you are Donald Trump!) Moreover, the technological advancements and rapid growth of our tech superiority have adversely affected in the accumulation of e-waste dumps. Though, means to negate such wastelands do exist but they are yet to see a huge increase in their efficiencies. Sharing economy ensures products are cycled and reused to its complete life cycle, thereby, reducing the effects on the environment. As per the reports from Ellen McArthur Foundation and the UNCTAD (United Nation Conference on Trade and Development), “across three areas—cities and construction, food and agriculture, and mobility and vehicle manufacturing—India could create $218 billion in additional economic value by 2030 ($624 billion in 2050) by adopting circular principles, compared to its current development scenario. At the same time, circularity could cut greenhouse gas emissions 23% by 2030 (44% by 2050), and reduce the use of virgin materials 24% by 2030 (38% by 2050).”
- Accessibility to self-employment opportunities.
Collaborative consumption offers economic benefits for everyone involved. With the proliferation of online jobs and ride-hailing providers such as Ola, Rapido, Quick ride, 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 ensures the seller makes some money on commodities that were otherwise futile. On the other side of these arrangements, you may eliminate the cost of car ownership, reduce your travel expenses, and secure valuable financial support for a new business idea that may not have been fundable otherwise.
- 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 to share economy participants see one another as equals, building constructive relationships where none existed previously.
- Higher savings with the same lifestyle.
This is no 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 home, startups like GoRental is your Santa Claus providing a wide selection of home furnishings and appliances rent, or having the desire to wear designer clothing, Flyrobe can be your personal designer or the adrenaline rush of cruising in a Ducati around the city. The sharing economy has seen a hike in more and more platforms providing rental options to users without sacrificing quality.
- 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 lets its users 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, the sharing economy won’t completely displace traditional economic networks anytime soon. It’s more likely to force existing industries to become more like the collaborative platforms that challenge them, with potential benefits for everyone involved.
- Lower ownership.
Not too long ago owning was seen as a status symbol. More assets you owned more wealthy one seemed. All that seemed to change post the economic depression of 2008. Assets became a liability and owning 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 about them. For instance, if you live in a city and 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 as attractive a target for thieves.
- Easy 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 business as risky. But with the increasing adaptation of the 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 nonprofit arts organizations. 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 not all is green, 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 center. The only constant change and we are at the forefront of witnessing the greatest change in consumer trends!