Sharing Economy is considered to be a peer-to-peer-based (P2P) economic model. However, it is not something new as communities have been sharing assets for a long time. Big data and internet has only helped asset owners as well as those seeking assets to access come together to access these features. Such concepts are also referred to as collaborative economy. It enables groups of individuals or individuals to make good use of unused assets to generate income.
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Some examples include idle cars, spare bedrooms and Coworking Spaces. AirBnB is a common example of this unique model. Travelers use this popular platform to seek cheaper accommodations and not those expensive traditional hotels. Having spare bedroom means, you may rent it out to travelers through AirBnB’s platform. This way, you can generate steady income. Such accommodations allow travelers to save about 60% when compared with traditional hotel rooms. Thus, both space owners and travelers benefit from this concept.
Evolution and opportunities of Sharing Economy model
In today’s digital age, most businesses and people tend to rely upon modern digital platforms like mobile apps and the web. It is for this reason peer-to-peer economy has been flourishing. This concept is convenient and easily accessible. Consumers can avail services at their fingertips. Young generations prefer this model and hence support such services as well as share own services via different P2P platforms to earn money.
Besides providing Business Partnership opportunities, these platforms offer efficient and reliable tools. Most P2P platforms for instance have inbuilt user-based rating system to develop trust amongst consumers. Those participating in such economy tend to have less preference towards particular brands. Thus, newer services are launched. Consumers also have become more concerned about convenience, speed and lower prices.
It is necessary to identify the Target Market. This economic model type is not just restricted to the United States, but has become popular the world over. Many have been opting shared service apps. Also is found renewed interest in using ride hailing apps or buying refurbished goods. Asia-Pacific region has been experiencing collaborative consumption. People prefer to rent from others or rent out what they have.
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Be it a seller or a buyer, such models have been successfully transforming Business Partnership and business landscape as a whole. Moreover, the benefits are easily noticeable with its further growth.
A major benefit derived from this model is low entry barrier. Thus, group of individuals or individuals can avail more flexibility or freedom to launch new services or businesses. There should be proper establishment of a platform to cater to the Target Market. Also, assets should be present to be used for the same.
The other benefit is that this model is sustainable. Unwanted resources can be used and income generated conveniently, thus boosting both parties involved. P2P model, on community level strengthens social trust and boosts social capital. Hence, businesses, general public and the entire society benefits from it.
Although collaborative consumption model offers several opportunities, it also is faced with few criticisms. One particular concern is regulation uncertainty. To ensure fairness and standardize service quality, there are present local, state and federal regulations. Besides this, most involved in such model are found to be unlicensed and unregulated. It also includes Coworking Spaces. Abuse reports abound among buyers and sellers. Also are witnessed publicized cases, lawsuits, crimes concerning this aspect. It only creates fear among consumers especially concerning lack of regulation in penalizing violators.
The truth is that Sharing Economy model has been evolving very fast and is expected to increase in demand in the coming years. Experts believe that by 2025, it is expected to be valued at around $335 Billion.