From spare bedrooms, cars and ladders, we’re sharing, or renting out our own belongings more than ever. Known as the sharing economy, the concept of sharing access to goods, services and talent has exploded over the last few years, enabled by our digital era.
Since we’re sharing just about anything, and with the consumer peer-to-peer rental market valued at a cool £15bn, what does the future hold for this trend?
“The sharing economy will expand to include not just tools, rides, homes but sports and camping equipment, board games, and children’s toys, in the same way libraries free you from the burden of owning your own books,” says Lawrence Alvarez, co-founder of The Toronto Tool Library.
Alvarez, who is crowdfunding to launch The Sharing Depot, Canada’s first Library of Things which will offer all the above and more, strongly believes the sharing economy is set to become completely embedded in society.
“In the future the sharing economy will just be the economy – it will naturally find its place within our day to day lives in the same way someone who sees a house on fire would automatically summon the fire engines – to not do so, to not share, puts your own life, and the lives of your community, at risk,” he says.
In terms of business, Fabiano Vallesi, strategy research and next generation at wealth management firm Julius Baer believes accommodation, transport, finance, freelancing and consumer goods have the most market potential. In fact, online peer-to-peer (p2p) companies could take up to a combined 20% market share of these sectors within 10 years.
“Peer-to-peer accommodation is slowly starting to challenge the lodging industry, especially growing on leisure travel,” says Vallesi. In leisure cities like London, New York and Paris, lower prices with listings on p2p accommodation platforms like Airbnb are attracting more travellers, who may not otherwise go there, he says. In these cities, Airbnb represents up to 17% of hotel room supply.
In the transport sector, Uber is a problem for traditional taxis and car rental but if you combine car sharing with driverless technology, car sales, car lending and even car insurance could also be at risk, Vallesi says.
Meanwhile, crowdfunding is predicted to reach $96bn (£67bn) by 2025 - half of which is expected to come from China. It’s creating “a niche market where it is eliminating more complexity and high cost of traditional lending,” says Vallesi.
To a lesser extent, freelancing and consumer goods are also growing markets for the sharing economy. Increasingly, there are more and more opportunities for micropreneurship and self-employment. Beyond cars and rooms, consumers can rent out their personal belongings, from digital cameras to designer handbags.
From being good for the environment and better utilising our assets to making a bit of extra cash, the sharing economy is “fantastic” for the consumer, Vallesi says. But there are risks for such platforms. “Regulations are a bad thing for digital reality. It’s still work in progress in the digital space. Different regulation standards such as tax obligations and so forth are being developed for coexistence with other businesses.”
So what can sharing economy firms do to surf this trend? “Flawless digital tools, elegantly simple search and smooth transactions are not merely a nice-to-have for companies today – they are a requirement for all players in the sharing economy,” Deborah Bothun, entertainment, media and communications leader at PwC US notes in recent research on the subject.
As for potential investors, Vallesi suggests sticking to those businesses that have already adapted to the sharing economy model. “Stay away from companies who are not able to scale up their brand and open up to this kind of model.”
So aside from bedrooms and cars, what else are people already sharing or renting out?
Pets
Services like Borrow My Doggy and Canada’s Part-Time Pooch connect dog owners who need their dog walked and cared for while they are away, with those who aren’t able to own a dog, but would like to spend time with one from time to time. There’s also Borrow Pets, which offers a similar service for guinea pigs, rabbits and cats alongside the conventional pooch. In fact, even London-based animal charity Wood Green has jumped on the bandwagon, renting out rescue cats as mousers to homes for a month at a time. It’s hoped that the moggies will benefit from being in a home environment, and better yet, the borrowers might consider adopting them permanently.
Washing machines
Pay-as-you-go washing machine subscription service Bundles gives consumers the opportunity to flaunt an 8kg Miele washing machine in their home without the upfront cost. A monthly fee, from around £15 for 15 washes to about £17 for 35 washes, also includes maintenance and advice. As well as saving on an energy efficient machine, the Netherlands-based scheme means consumers are rewarded for cutting back on washes.
Juicers, hammers, tents
Going camping this weekend? Need a hammer for a one-off project? Sharing libraries are popping up around North America and increasingly in Europe, allowing consumers to borrow just about anything. Depending on the library, users pay an unlimited, annual borrowing membership of £20 –£35, or up to £8 per item. Either way, these libraries offer a more economical alternative to buying tools outright for infrequent use.
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