What Is the Sharing Economy?

Trying to define exactly what the sharing economy is would not do the term justice. 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. Some factors that led to the rise of the sharing or gig economy include advancements in digital platforms and devices, consumer demand for services as well as need for cost and resource efficiency, and lastly globalization. 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. While most commonly referred to as the sharing economy, this term is an umbrella that encompasses other economic systems such as:

What Is the Impact of the Sharing Economy?

The sharing economy has a history of disrupting traditional business sectors. Sharing economy has revealed the problem of excess capacity in many industries. Whether its equipment sitting unused, a specialized worker who doesn’t have enough hours, or even the excess supply of a particular product. There is an opportunity cost of not using these resources efficiently, and that is what a sharing economy fixes. By sharing and using existing resources efficiently, sharing economy can help bring down costs for businesses. Traditional industries are being affected by the sharing economy—and many traditional brands will struggle if they do not adapt to the changing landscape.

Transportation

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, and convenient alternative to traditional transportation options such as public transit or taxi cabs. By utilizing an efficient mobile application and network of vetted drivers, Uber satisfies consumers’ transportation demands while providing an arguably better user experience than traditional means. Top Sharing Economy Brands in the Transportation Space include:

UberLyft

Consumer Goods

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. Affordability, convenience, and efficiency are also three of the most influential factors in a consumer goods purchasing decision. Therefore, it’s no surprise that share-based brands are also dominating the consumer goods industry. 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. Top sharing economy brands in the Consumer Goods space include:

eBayEtsyRent the Runway

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. Powerhouses like Fiverr, Upwork, and TaskRabbit create value by providing a fast, friendly, and secure platform on which people or businesses can find contractors for hire. Top sharing economy brands in the Professional and Personal Services space include:

FiverrUpwork

Healthcare

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. From telemedicine to group-consultations, the sharing economy is destined to change the healthcare industry.   For instance, many times expensive medical equipment can sit unused—creating storage and maintenance expenses. 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. Top sharing economy brands in the Healthcare space include:

AmwellDoctor On DemandCohealo

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.