Learning how to share is one of those aphorisms from “All I Really Need to Know, I Learned in Kindergarten.” But increasingly, adults are being reminded that it’s never too late to learn to share. And while it sounds contradictory, some are even learning how to make money doing it.
The sharing economy, along with the subscription economy, are aspects of a larger story. People — at least middle- and upper-class people in Europe and America who own smartphones so they can run all the sharing apps — are seemingly less interested in owning things. Whether it’s due to a lack of money (particularly since this movement started during the recent economic downturn), the desire to upgrade frequently, environmental concerns, or a lack of space, people are finding ways to have access to the goods and services they want without having to make a commitment. Or, as Forbes describes it, “asset owners use digital clearinghouses to capitalize the unused capacity of things they already have, and consumers rent from their peers rather than rent or buy from a company.”
The poster children for the person-to-person sharing economy — which some say could amount to as much as $100 billion — include the house-sharing service Airbnb and ride-sharing services such as Lyft, Uber, and Sidecar. (You can even share parking spaces.)
Other popular businesses involved in the sharing economy include Netflix, which lets us share movies, and applications such as Spotify, Pandora, and Rdio that help us share music. Businesses such as ZipCar let us share cars. Users pay a low monthly fee and then can borrow a car whenever they need it, paying for it only when they use it.
Certainly, the sharing economy is disruptive — which is a good or a bad thing, depending on whether you are the disruptor or the disruptee. Taxi companies are complaining about ride-sharing apps. Hotels and neighborhood associations are complaining about Airbnb. Content publishers and creators are complaining about all the various kinds of legal and illegal content sharing services.
At the same time, notes Forbes, major auto companies are starting to invest in the auto sharing companies — either in hopes of getting a piece of it or in getting its consumers once they decide they want their own car. Instead of fighting it, they’re joining it. And businesses that help with the business of sharing — such as providing reputation services, so you know who’s borrowing your car or your house — are also booming, writes Fast Company.
Think sharing is only for consumer items? Think again. What is the cloud, other than sharing infrastructure? What is the freelance/contract economy, other than sharing expertise? What is open source, other than sharing code? What is hoteling, other than sharing office space? Some entrepreneurs are going even further and coworking, or sharing a single large office space among a number of companies. Typically they also share resources such as the cafeteria, a receptionist, and office equipment – and as a bonus, often find networking benefits as well.
There are a number of advantages to the sharing economy as a business user.
- It can save money. Specifically, it can help save capital expenditures from buying equipment, or salaries and benefits — often a business’ biggest cost — from hiring people full-time. While the per-hour cost of sharing a piece of equipment or a person might be higher, in the long run it often costs less. Or, alternatively, by paying the same amount, you can get access to nicer things than you could if you had to buy them.
- Fewer things get used and made in general . They just get used more often. This is more efficient and can result in less waste.
- It takes up less space. You don’t have to hire all the people you only need sometimes and make sure they have desks, office supplies, and work to do. You don’t have to find a space suitable for all of the infrastructure you might need, particularly if your business is cyclical or spiky.
- It is more flexible. You share a truck when you need a truck, you increase the amount of shared computing power at busy times in your business, and you don’t need to worry about it the rest of the time.
- More than likely, you don’t have to take care of the item you’re sharing. You don’t have to maintain the cars. You don’t have to upgrade the firmware. You don’t have to give the people benefits and sick time. While this could lead to a lack of understanding of the real cost, and a lack of appreciation, it certainly costs less and takes up less time, freeing you to work on your actual business.
There are also a number of disadvantages to the sharing economy.
- What if something isn’t available when you want it? You can’t find a place to stay, you can’t borrow the truck when you need it, the freelance people are working for someone else the week you need them.
- You have to trust the provider of the goods or services that they are what they’re supposed to be, and that they’re maintained properly. You don’t necessarily know that backups are being done and that there are battery backups in case of a power failure; you don’t know if the oil is changed regularly; you don’t always know if the person actually is competent at what they say they are. Plus, the legal, tax, and regulatory agencies that protect us as consumers don’t necessarily apply to sharers — though some legal organizations are now specializing in the sharing economy.
- The lack of ownership can lead to a “Tragedy of the Commons.” The attitude of “It’s a rental” can mean that sharers don’t take care of something properly. This is bad enough when the item in question is a car or a house. It’s worse when it’s a person. And organizations such as the Freelancers Union are calling for more governmental support of the sharing economy to protect working individuals.
Despite its downsides, there are going to be times when the sharing economy is appropriate for you and your company — both as a producer, by looking for ways to share your goods and services, and as a consumer, by looking for ways to share the goods and services that your company needs. “If you don’t build a value cycle,” economist Umair Haque told Fast Company, “one will be self-organized. And it will commoditize you.” Chances are, in one way or another, it’s going to be disrupting your industry; it’s up to you to decide whether you want to be a part of it.
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