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What is the sharing economy and how it can benefit you
Have you heard of the sharing economy? As new technologies get us more and more connected, new opportunities emerge allowing people to offer services at a much more affordable price and in some cases free. A new form of economy is growing online allowing participants to get certain incentives for by simply providing certain services. The current established businesses are threatened by that form of economy. People have referred to it as the sharing a economy. It is an economy where you can share what you have with anybody in the world and in return get an incentive. Let’s look at some examples of business model that rely of the sharing economy.
Example of sharing economy business models
Fon is currently the largest Wi-Fi network in the world offering its members the ability to get connected to the net even when away from home at no additional cost, so far as they are willing to share their home wireless connection with other users. By sharing your home connection, you get a free roaming service in exchange.
This company based in San Franciso has enabled a new business to emerge by allowing average apartment owners to also share their private space for a small fee. This has allowed a lot of tourists to be able to afford much cheaper places when traveling. Today the service is available in more than 33,000 cities and 192 countries.
This is an app that can be installed either on an iOS or Android device that helps people share a ride with other individuals heading to the same town. Instead of driving alone, one can just share on the app information about where he is going with his car. If there are other people needing a ride that are found in the vicinity and heading to the same town, they will be matched through the app. They then just have to meet at a point where they are agree to and continue the ride together. The driver sharing the ride may get a small fee for the trouble.
As you can see the sharing economy creates a situation where individuals can take advantage of certain opportunities sharing something they can offer and get an incentive in return. There is an emerging market for this business model but there are advantages and disadvantages related to the sharing economy that may disrupted the current one.
Advantages of the sharing economy
With the opportunities created through the sharing economy, money might still change hands but the services offered are much more affordable and the incentive the individual sharing gets in return, might be much more rewarding than if he was running a business. A typical example is the case of Fon, where a person gets free roaming Internet by simply sharing the home connection.
According to the Forbes magazine, this year the share economy could generate up to $3.5 billion with a growth exceeding 25%. It is a win-win situation that allows the average person to offer the extra resources he has, extra resources that would have gone to waste if not managed properly. There is also a downside of the sharing economy.
Disadvantages of the sharing economy
The big losers of the sharing economy are probably going to be the big businesses that just can’t afford to bring their prices down. They just can’t compete with the average people on the street with unregistered businesses that can charge really low fees. This has led to the situation where big businesses are lobbying to push the government to pass out laws that will turn sharing into something illegal.
Just like the peer to peer networks, legal or illegal, the sharing network has come to stay. But it will sometimes have to deal with hurdles to jump and eventually get itself into a place where different business models can co-exist without having to disrupt each other.
What do you think of the sharing economy. Have you ever tried any service related to that. Share your thoughts below.
You might also want to read this: Can the internet kick out the banks?
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