A Glance at 5 of the Pioneers in the Sharing Economy

Airbnb

This travel lodging service is arguably the most prominent of household names in the sharing economy. Founded in 2008 in San Francisco California, by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, Airbnb creates a platform for people to rent out their homes to travelers, thus giving the would-be lodgers a unique, exhilarating and creative experience, at affordable prices.

In 2014, Airbnb surpassed 800,000 listings worldwide, which means they now offer more lodging than Hilton Worldwide or InterContinental Hotels Group or any other hotel chain in the world.

Recently, Airbnb was a beneficiary of arguably one of the biggest private-funding moves ever, with about $1.5 billion raised in a deal which has increased the company’s value to $25.5 billion.

Zipcar

This car-sharing company of American origin was founded in 1999, by Antje Danielson and Robin Chase. From calculations made…Zipcar has stated that a single car from their fleet replaces 15 private cars. As it stands, Zipcar has a whopping 1.7 million car-sharing registered members in 27 countries. And recently, it was acquired by Avis Budget Group for the sum of $500 million.

Uber

This global taxi service is arguably the biggest taxi service in the world, and the biggest player in the sharing economy, only second to Airbnb. It was launched in 2010 in San Francisco California, by Travis Kilnwick and Garrett Camp. It began as a black car service, before adding compact cars and SUVs to its fleet of cars. With a presence in 25 countries, Uber develops, markets and operates its mobile app. The Uber app allows customers with smartphones to submit their request for intended trips. The software program embedded in the app automatically communicates the location of the customer to the nearest Uber driver, and they eventually meet up. The Uber drivers make use of their personal cars, and are paid weekly via direct deposit.

Getaround

This is a peer-to-peer car sharing company that was founded by Sam Zaid, Jessica Scorpio, and Elliot Kroo, in 2009, also in San Francisco. It allows for people to lend their cars to those who need it, on a per hour charge basis. The owners get 60% commission of the rental fees. For owners leaving town, they are allowed to drop their cars with Getaround who would in turn rent them out, clean them, and take care of them too. Berkshire Hathaway Insurance covers the cars with $1 million insurance policy.

TaskRabbit

Founded in 2008 by Leah Busque, this online and mobile market matches freelance labor with demands made for such labor services as indicated. TaskRabbit is a major player in the sharing economy, as it connects lots of people in need of labor to take care of chores, with those willing to do these chores. The users input their information about the task to be done, as well as a pick-up date and a time frame for the completion of the task. Then select a person from a list people who are willing to do the task. From house cleaning, to even standing in the queue for someone, who wants to purchase a hot-on-demand item, TaskRabbit handles them all. The laborers are called Taskers. And about 15% of them earn as much as $7000 per month.

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How much is Sharing Economy Contributing to GDP?

The sharing economy revolves around online platforms activity. It is based on sharing underutilized resources, for a fee or for free, on one-to-one basis. Sharing economy encompasses household items, cars, land use.

Normally, the rates are determined on technology platforms via the software that connects supply to demand. Most times, the platforms get their cut and the seller goes with the rest.

It’s necessary for a government to include the cost of the transactions in sharing economy, when calculating Gross Domestic Product (GDP). As GDP indicates investment and consumption and government expenses.

Below are four ways of measuring value not shown in GDP, in the sharing economy:

  • Uncounted economic gains:

Some discrete goods and services do have market value. Its economic activity gives rise to output that aren’t recorded in GDP. These include home improvements, gardening and childcare. This is the same way that sharing economy produces unseen economic value. It also opens people up to other parts of the economy. The individual gains though, as the individual gets to consume goods that were once beyond their reach.

  • Better use of environmental resources:

The sharing economy has long been in existence. It owes its resurgence to the Internet. As it enables transaction costs to be reduced, whilst increasing options with excess capacity. Peak load events such as the Olympics, benefit from this. It also helps to eliminate waste for the good of the environment.

  • Increased personal well-being:

In all its measure, GDP ignores social progress as a measure of well being. Which includes quality of life factors such as social and psychological health. Pertaining to sharing economy, its components are not part of calculating value. An economy that has high social sharing has high value too. But it doesn’t reflect on known economic indicators.

  • Higher option value and consumer surplus:

Two interconnected concepts of value in economics which apply to sharing economy but can’t be seen by GDP are option value and consumer surplus. Option value is one that is placed on people’s willingness to make payments for the maintenance of public utilities even if they might never use it. Consumer surplus is the difference between what the consumers are willing to pay for and what they actually pay.

What to do?

Diane Coyle has argued: “the sharing economy is blurring the conventional boundary between ‘the economy’ and everyday life; understanding this is vital if governments are to develop policies that enable the economy to grow and people to work and earn as they want to”. Despite all the benefits that can’t be captured by GDP, risks such as corporate tax, social protection, and welfare still abound. Hence, Governments must ensure that everyone benefits from the value created. Suggestions have been made that using labor force surveys and big data techniques would help in understanding how people engage in social sharing. The European Commission is also taking steps that include environmental and social aspects in measures of economic progress, such as for development and happiness. In all, “statisticians and economists should think more deeply about what is meant by “the economy” in the twenty-first century”. That way they might be able to discover new technological means to measure it.

www.sharingeconomycompanies.com

Reaping the Benefits of the Collaborative Sharing Economy

With today’s prices on commodities and renting places to stay being sky high, the general public has come up with different ways to offset costs. When you used to go on vacation, you had three choices, rent a hotel room, stay with friends, or sleep in a R.V. Situations have changed and regular individuals are renting out rooms in their apartments and homes for much cheaper than a conventional business can offer. It is the new sharing economy and is becoming a booming business.

Lower Costs For the Things You Desire

Technology has made it much safer to verify who people are and to make sure services are paid for in full. Verification and payment services have made it possible to rent out objects you own in your home with ease. There are apps that match up the closest available service that you are looking for right to you.

You Can Provide and Request Services in Minutes

Sites like Tophatter have made anyone an instant seller and enable them to sell their products in minutes. It is becoming the same way with being able to rent your car, jet ski, iPad, computer or power tools. What you own, I can own too has become the motto. The internet allows for easier renting of office spaces as well. Instead of having to rent an entire building for small business needs, individuals can share the costs of the space and internet fees. This model of entrepreneurship works best for people who own expensive products but don’t have the time or desire to use them often. A lot of vacation type beach “toys” can be rented to people online for much cheaper than the conventional $20-$100 an hour to rent a boat, jet ski, surf, paddle board or whatever it is you like to do but can’t afford your own. It is also called collaborative consumption and it helps everyone out.

Environmentally Beneficial and Socially Fun

Instead of having to buy a car when you live in a city, being able to rent someone else’s for the day here and there saves on gas and reduces your carbon footprint especially if the rest of the time you are using public transportation or a bike. It is also helping to connect people to new friendships that they wouldn’t have otherwise had. Some people just enjoy the socialization aspect of having various renters come and go for brief periods of time. It keeps life exciting for them. Sharing in the economy is good for us all on so many levels.

www.sharingeconomycompanies.com

Can Fashion and Sharing Economy Ever Intersect?

Over the past decades, we have had to buy items we want to use, regardless of how much we use them. There are items that feel strange to share, like fridge, or toothbrushes. Ownership in these cases is understandable. For the items that we use once or twice, single ownership is not a viable option. We often try to compel ourselves with a more feasible option named on-demand access, and that is not an answer on the whole as well.

Today, we have the technology to help us create platforms for the new online marketplaces and to provide us with multiple channels of communication- easier than ever! Customers can hire a car, stay in a spare room, or even ride in someone’s car. In previous articles, we talked about how sharing economy has been enjoying a rapid growth over the past few years, and how the small ideas are becoming a billion-dollar ideas in a matter of time. As a matter of fact, PwC predicts the sharing economy to make up to $335 billion revenue by 2025, which is currently only $15 billion. With little to explain, sharing economy provides owners with an option to transform their possessions into a revenue stream, and with long customer lifetime value. For them, it’s all about convenience, value, and revenue.

But can we replicate this growing trend in fashion too?

I believe it’s a million-dollar question, and if we can find an answer to this, we are probably on the verge of opening a new dimension in the horizon.

Accessories and even clothing very often have a high value with low usage. It’s very common for anyone to have clothing that costs three figures, and many of them bought are often worn occasionally. A perfect example would be the wedding dress that one might buy. It’ll cost you a fortune, but you can only use it occasionally. As a result, dozens of fashion companies have entered the sharing economy fray over the past few years to tap into the opportunity.

Fashion Rental Services

Fashion rental services allow potential customers to borrow clothing or accessories over a period. Most of the companies charge 10 to 20 percent of an item’s retail price. The Business of Fashion has highlighted the best-known fashion rental services in its latest blog, Business of Fashion quotes, “the best known of these is US-based Rent the Runway, which launched in 2009 and today has over 5.5 million members. However, the swath of start-ups in the field includes Girl Meets Dress in the UK, Chic by Choice in Europe and Glam Corner in Australia, as well as more niche ventures, such as Gwynnie Bee (plus-size fashion rental) and Borrow For Your Bump (maternity-wear rental).”

The major reason why someone buys a shoe, a gown or a suit is to have an easy, inexpensive access to the services that items promise to provide, and when there is a possibility to rent it, one can enjoy the services for a brief period. Due to this, loan clothing companies often charge low on the aspiring brands that are usually unaffordable to public. You might not want to spend $1,000 on clothing to wear it once or twice, but you’ll consider paying $100 for that same piece by renting it. The proposition is quite attractive, isn’t it?

Impact on the Fashion Industry

So far, the sharing economy has had little impact on the retail as compared to the sectors such as hospitality or transportation. This is, however, majorly due to lack of awareness among people. Some believe that if the fashion economy flourishes, its impacts on retailers would be profound.  Rent the Runway’s Hyman predicts that fast fashion businesses, in particular, could be affected, as customers use rental services to borrow high-quality on-trend seasonal pieces, rather than buy cheaper versions on the high street.

Clothing Sharing Companies

3 Reasons Millennials Should Join The Sharing Economy Revolution

Sharing economy connects individuals who need a particular service or product with other individuals who are willing to render or share that particular service or product.

A huge number of startups have emerged from the concept of sharing economy, and 17 of them are worth a billion dollars each. Needless to say, the sharing economy will continue to grow, which will offer a fantastic opportunity to the entrepreneurs who are willing to cash on it. The benefit of growth in sharing economy is a win-win situation for users, and aspiring entrepreneurs too.

  1. Existing Businesses will Grow

In a sharing economy, everybody gets a benefit. The customer will get the product or a service quicker, and cheaper, while the provider or the seller makes good money. If you are a regular Uber user, you’ll see many retirees as drivers, and many people are renting out rooms for Airbnb. Not to forget, Airbnb and Uber are just the beginning, and there’s more to the sharing economy.

  1. Minimal Startup Costs

The shared economy has produced millions of micro-entrepreneurs. Most of these entrepreneurs started their businesses with a few hundred dollars, or less in capital. Later, they can build on the very fact that Governments and regulatory authorities have little sight of these startups, and therefore they usually get tax holidays or exemptions.

  1. Millions of People are Buying into Shared Economy- take chances

Millennials are currently the largest workforce in the US, and they are ones who are running the sharing economy movement. As James O’Connell, CEO of JDP, explains, “Millennials believe in making a difference with their spending habits… Companies like Uber and Airbnb are doing so well because their business plan taps into that mindset so completely.”

It is clear that the sharing economy is the way to the future, and it’s the high time to take your chances. Whether it’s a ride, a bed or a meal, your potential customers are finding it more reliable, convenient and cheaper to buy from the local individual than a company. As a millennial, if you can find a need, and the individuals are willing to help, your start up could be the next billion-dollar idea in the sharing economy. Like mentioned above, there’s a little to the financial matter of startups because the costs are minimal, and it is about time to take your chances.

Sharing Economy