The concept of sharing economy works on a model where people do not directly buy products but rather hire things like cars, homes, etc. or share them with each other. This is different from the traditional business model of selling goods. Companies use this as a commercial business model and it has proven to be a successful one. It is a commercially viable, IT-facilitated peer-to-peer model that is used for the sharing of goods & services without the actual transfer of ownership. It involves business activities such as renting, leasing, pooling, and sharing.
Synonyms: Collaborative consumption, On-demand economy, peer-to-peer(P2P) model, access economy, gig economy, circular economy, coworking, crowdsourcing.
Consumers often benefit from this model in terms of low costs and a higher level of convenience. This led to a shift in consumer behavior where they value sharing more than the ownership.
Driving factors:
- Technological innovation– Growth of e-commerce, higher mobile phone users and low cost of phones and increase in internet data penetration
- Social connectivity– It creates social pressure and impacts customer’s buying behavior
- Growing economy– Rising middle class, Value for money approach and rise in disposable income
Examples:
- The company Airbnb helps individuals share extra space in their homes.
- DogVacay helps dog owners leave their dogs with a host who will take care of the dog.
- RelayRides let people borrow cars from neighbors for an hour or day.
- Uber/Ola/ Lyft provides an affordable, safe, and convenient ride-sharing platform.
- Zoomcar lets you rent a car for weekdays/weekends at attractive prices.
- Neighbor helps your storage space to renters and has developed as self-storage platform
- JustPark, a parking space-sharing company with parking at over 20000 locations
- TaskRabbit is an online labor-sharing marketplace that fulfills labor with local demand.
- Lending Club helps you to borrow money from your peers.
All of these are prime examples of the sharing economy concept.
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