Economic and Social Realities of the Sharing Economy
Thinking outside the box with personal finances has changed quite a bit in just the past decade. Think about such thinking for a minute.
Outside box, circa 2004: Plant your own vegetable garden; invest in an espresso machine instead of daily latte; ride share; brown-bag lunch; online coupons.
Outside box, 2014: Who wants to rent out my car, parking space, spare room, clothes, or brainpower?
It's hardly news to most folks that we're in the midst of a business model revolution, known as the sharing economy, which stands to benefit everyone. Thanks to the entrepreneurial mind-set brought about by recessionary hard times and technological advances, entities such as Airbnb, TaskRabbit, and Snapgoods have popped up to provide services using things people already own, whether that be a car, a home, or the clothes in their closet. In a sharing economy, anyone can become a service provider and earn extra cash as, say, a taxi service, a hotel, or a home cleaner.
Not only is it a money saver, but, as you'll see later, it's making us better people. (No, really, it's true.)
More folks are jumping on the "sharing" bandwagon as either a service provider or user, which explains why market strategists, including those at the brokerage firm ConvergEx Group, projected $3.5 billion in revenue last year with the potential to blow up to as much as $110 billion in coming years.
In a note to clients reported last year by Business Insider, ConvergEx Group stated, "Americans of every demographic are flocking to services like Airbnb, TaskRabbit, and Bag Borrow or Steal for one overwhelming reason: Renting and sharing allow us to live the life we want without spending beyond our means."
"This is just the tip of the iceberg," Philip Auerswald, associate professor of public policy at George Mason University, said this past January, as reported by The Atlantic, in explaining the sharing economy's implications at a House Committee on Small Business hearing -- the first time the U.S. Congress peered into the sharing economy. He said we're in the midst of an important shift in how people work and create value for the broader economy.
Low or no cash flow may be the main driver here, but don't discount the trendiness factor.
According to a study done by the Helsinki Institute for Information Technology, collaborative consumption "has been regarded as a mode of consumption that engages especially environmentally and ecologically conscious consumers."
The current generation who experienced the recent economic collapse can relate to those who survived the Great Depression through price and efficiency-consciousness, only folks today have the added benefit of tools connecting owners of transportation, space, and services to those who need it.
A real social network
A somewhat ironic side benefit of this trend is that the sharing economy, whose very existence is made possible by technical achievements and reliance on mobile devices that birthed online social "communities" that are anything but, is helping people truly connect in meaningful ways.
Using someone's lived-in space through Airbnb, as opposed to the typically antiseptic hotel experience, is making travel a more rich and authentic experience. Offering up an unused vehicle or even the parking space that contains it can often become the "starter drug" into a life of more environmental awareness.
Whereas so-called social communities foster the idea of people connecting while separated by devices, a sharing economy is actually connecting people, all the while helping to slim finances and turn existing resources into income.
One could take the stance that a sharing economy is bad for friendships. A recent article in Forbes theorized that people would become more likely to open up their homes and other properties to complete strangers at the expense of an out-of-town friend in need of a place to crash, which helps prove the point here.
The connectivity provided by these sharing applications allows people from different walks of life to connect who otherwise wouldn't have "shared" anything, much less a home space, pair of shoes, or lawnmower.
So the next time you consider a foray into the sharing economy, remember the benefits may go beyond your personal budget ledger.
Jim Staats is a technical support analyst at Manilla.com, the leading, free and secure service that helps consumers simplify and organize all of their bills and household accounts in one place online or via the four-star-plus customer-rated mobile apps. He has a bachelor's degree in industrial technology from California Polytechnic State University at San Luis Obispo. Wedged between stints supporting products at firms including Intuit and Sybase, Jim worked as a journalist reporting on real estate, business, technology and other issues for print and online publications.
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