"The sharing economy is inevitable, because humans cannot survive unless we significantly increase what we share": Lyft lets users avoid cab fees by sharing cars© Jeff Chiu/AP/Press Association Images
Learning to share was once a key lesson of childhood. Today it’s become a concept at the centre of a fast-growing movement that has taken hold in the wake of the world recession. The “sharing economy” as it’s commonly known, is based on the notion of making a profit from your own under-used resources, turning consumers into providers.
In the age of hyper connectivity, anyone can become a part-time entrepreneur—using the web to rent, sell or swap everything from empty bedrooms to parked cars, second-hand clothes, electronic devices and even skills such as cleaning and baking (pie-making skills are particularly in demand). As social entrepreneur Roo Rogers, who co-authored the definitive book on this topic with Rachel Botsman, What’s Mine Is Yours, explains: “The sharing economy fuses the market need for efficiency and value with consumers’ desire to look at consumption as a personal and holistic experience.”
Leading the charge are peer-to-peer marketplaces such as Airbnb, which allows anyone to rent their property to strangers on a short-term basis, even just for a night—it currently hosts 150,000 people a night and is valued at $1bn. Uber, the leading alternative taxi service which enables users to share rides, has racked up a revenue of £125m for 2013, and Taskrabbit, a hugely successful odd jobs website, reports annual revenue of $30m. In the US, Forbes forecast that sharing economy transactions for 2013 would total $3.5bn, with growth exceeding 25 per cent, while in the UK a new report compiled by YouGov is claiming that participating in the sharing economy could potentially save Britons £12.4bn a year. “I believe we are at the start of a massive paradigm shift away from institutional trust to peer trust,” says Rachel Botsman. “In the 20th century, we built massive top-down organisations, centralised wealth and spent billions on institutional brands that influenced which products and services we thought were good and bad. That is changing. Power, trust and influence is shifting from the centre to networks of individuals.”
But, as we move into 2014, a backlash is brewing. New regulations threaten the core business of companies such as Airbnb. As Jenelle Orsi, director of the Sustainable Economies Law Center, notes collaborative consumption exists in an “economy sandwich”—balanced precariously between less regulated private ownership and highly regulated public commerce.
“We’re in a transition stage where communities are developing new frameworks,” says James Slezak the co-founder of Peers which is the sharing economy’s first regulatory body. He cites the example of ride sharing companies such as Uber and Lyft, which are distinct from taxi services and about a third cheaper. Hugely popular in California where they originated, they were challenged by traditional taxi services which called for a ban due to the lack of regulation on fares and vehicle quality. Members of Peers worked with the authorities to avoid a ban and have the service recognised as a new category of transport. Slezak explains: “The sharing economy is disrupting some traditional businesses. This is definitely a positive thing overall.”
Is it possible to sustain this model? “The sharing economy is inevitable, because humans cannot survive unless we significantly increase what we share,” says Janelle Orsi. “Our legal systems aren’t ready for it, but they will quickly adapt, because millions—even billions—of people will demand... the sharing economy.”
Read more big ideas;
Rejectionist politicsThe politics of resentment will be a powerful, destabilising force in 2014
Secular stagnation The global economy might have been in trouble long before 2008
The new cold war US negotiations are stirring up tensions between two clusters of allies
Beginning of the end of QE When central banks stop pumping money into the world's economies, there's no telling how markets will react
Coalitions of the willing As more countries wield more power, bilateral deals and pacts between allies will become the norm
Growth leaves wages behind It's not the size of the economy that counts, it's what you do with it
Boom Cities Cities, rather than nation states, are proving increasingly adept at meeting the challenges of the 21st century
Personalised Medicine Genetic testing will make treating illnesses cheaper and more efficient
Cloud Scepticism Public concern about government surveillance will make users and regulators wary of remote data storage
The new news Online media brands have changed the way we consume and produce journalism, and that's no bad thing
Pop up everything Temporary venues have altered urban lifestyles forever
Learning to share was once a key lesson of childhood. Today it’s become a concept at the centre of a fast-growing movement that has taken hold in the wake of the world recession. The “sharing economy” as it’s commonly known, is based on the notion of making a profit from your own under-used resources, turning consumers into providers.
In the age of hyper connectivity, anyone can become a part-time entrepreneur—using the web to rent, sell or swap everything from empty bedrooms to parked cars, second-hand clothes, electronic devices and even skills such as cleaning and baking (pie-making skills are particularly in demand). As social entrepreneur Roo Rogers, who co-authored the definitive book on this topic with Rachel Botsman, What’s Mine Is Yours, explains: “The sharing economy fuses the market need for efficiency and value with consumers’ desire to look at consumption as a personal and holistic experience.”
Leading the charge are peer-to-peer marketplaces such as Airbnb, which allows anyone to rent their property to strangers on a short-term basis, even just for a night—it currently hosts 150,000 people a night and is valued at $1bn. Uber, the leading alternative taxi service which enables users to share rides, has racked up a revenue of £125m for 2013, and Taskrabbit, a hugely successful odd jobs website, reports annual revenue of $30m. In the US, Forbes forecast that sharing economy transactions for 2013 would total $3.5bn, with growth exceeding 25 per cent, while in the UK a new report compiled by YouGov is claiming that participating in the sharing economy could potentially save Britons £12.4bn a year. “I believe we are at the start of a massive paradigm shift away from institutional trust to peer trust,” says Rachel Botsman. “In the 20th century, we built massive top-down organisations, centralised wealth and spent billions on institutional brands that influenced which products and services we thought were good and bad. That is changing. Power, trust and influence is shifting from the centre to networks of individuals.”
But, as we move into 2014, a backlash is brewing. New regulations threaten the core business of companies such as Airbnb. As Jenelle Orsi, director of the Sustainable Economies Law Center, notes collaborative consumption exists in an “economy sandwich”—balanced precariously between less regulated private ownership and highly regulated public commerce.
“We’re in a transition stage where communities are developing new frameworks,” says James Slezak the co-founder of Peers which is the sharing economy’s first regulatory body. He cites the example of ride sharing companies such as Uber and Lyft, which are distinct from taxi services and about a third cheaper. Hugely popular in California where they originated, they were challenged by traditional taxi services which called for a ban due to the lack of regulation on fares and vehicle quality. Members of Peers worked with the authorities to avoid a ban and have the service recognised as a new category of transport. Slezak explains: “The sharing economy is disrupting some traditional businesses. This is definitely a positive thing overall.”
Is it possible to sustain this model? “The sharing economy is inevitable, because humans cannot survive unless we significantly increase what we share,” says Janelle Orsi. “Our legal systems aren’t ready for it, but they will quickly adapt, because millions—even billions—of people will demand... the sharing economy.”
Read more big ideas;
Rejectionist politicsThe politics of resentment will be a powerful, destabilising force in 2014
Secular stagnation The global economy might have been in trouble long before 2008
The new cold war US negotiations are stirring up tensions between two clusters of allies
Beginning of the end of QE When central banks stop pumping money into the world's economies, there's no telling how markets will react
Coalitions of the willing As more countries wield more power, bilateral deals and pacts between allies will become the norm
Growth leaves wages behind It's not the size of the economy that counts, it's what you do with it
Boom Cities Cities, rather than nation states, are proving increasingly adept at meeting the challenges of the 21st century
Personalised Medicine Genetic testing will make treating illnesses cheaper and more efficient
Cloud Scepticism Public concern about government surveillance will make users and regulators wary of remote data storage
The new news Online media brands have changed the way we consume and produce journalism, and that's no bad thing
Pop up everything Temporary venues have altered urban lifestyles forever
