The sharing economy is an economic model based on sharing underutilized assets – including skills, spaces and intellectual property – for monetary or non- monetary benefits. In my view, the sharing economy is the first wave of the bigger collaborative economy. The sharing economy is the first wave of the bigger collaborative economy. The collaborative economy is a larger concept based on the shift from centralized hierarchical institutions to decentralized networks and communities.
The collaborative economy is disruptive for three key reasons. First, it drives a shift from centralized asset-heavy organizations to decentralized asset-light networks and marketplaces. It typically does this by creating business models that enable underutilized assets from spaces to skills to ‘stuff’ to be used more efficiently. Take Airbnb and Hilton Hotels. Unlike Hilton Hotels, Airbnb doesn’t actually own accommodation. Instead, it facilitates access to existing spare spaces around the world. On-demand ride- sharing services such as Uber are similar examples from the taxi industry. They don’t own the cars or employ the drivers, but facilitate access to an existing inventory and allow assets be used more efficiently.
Second, technology is making it easier for us to trust strangers and to interact, exchange and share in ways that were not possible before. This is giving rise to different forms of peer-to-peer commerce that bypass traditional institutions. In the digital age, consumers no longer necessarily need to own assets; they can instead pay to access benefits through different service models.
The third reason relates to the shift in consumer behavior from physical ownership of assets to on- demand access. In the digital age, consumers no longer necessarily need to own assets; they can instead pay to access benefits through different service models. We are seeing this emerging from Spotify and Netflix in media, to Zipcar in transportation and from many other businesses. When you consider these three factors, they are all disrupting different industries – from travel to transportation to financial services – in a profound way.
There are three factors that are distinctly shaping the behavior of millennials, and driving the collaborative economy. First, millennials are growing up with a different attitude towards sharing and interacting with strangers. These attitudes and behaviors are now dispersing into different areas of their lives. Thus, millennials are more inclined to think about sharing cars in the same way that they think about sharing photos. The second thing is that millennials view technology differently. They are remote controls to the physical world. Millennials look at their phones to provide them with access to whatever they need, whenever they need it. This “on-demand, instant gratification” culture fits in perfectly with models of access as opposed to those of ownership. The third factor is a backlash against consumerism. At least, this is what we try to convince ourselves to make this trend really valuable in our consumerism landscape.
Truly said, we can understand that the companies basing their business model on collaborative economy think about optimizing the waste and unused asset (and unlock new use of existing asset), eliminating redundancy and complexity (like middlemen and other layers that make things complicated for the end-users), accessibility to limited products or services (and not only for luxury experiences, bringing back more to the masses) and restoring trust to other people (possibility to share and experience together).
But, this is where I see a major pitfall in the system. I agree that the collaborative industry does all that and theoretically, it humanizes grandly the usage of Internet and what it can bring to you as a person. But then, why those companies like AirBnB or Uber are getting so rich – we call them unicorns for god sake as they bring billions of dollars – and to do a simple thing. Just to bring people together. They take no risk other than just enabling the trends of connection between human beings – poor user experience, basic platform to provide to the people, no legal responsibility if something goes wrong in the process (read again the mentions in AirBnB for instance, Uber and its lack of responsibility if there is something happens with a driver), complete ignorance or denial of the local rules in terms of taxation in each country, outrageous fee taken for a minimal added value. I don’t see why these companies are so powerful while all their business is based on peer-to-peer desire to optimize their life experience. But they did not make anything new to secure them from fraud or damage.
Today, there is a resurgence of “we” – a revival in the belief of community. We are seeing an entire generation that wants to be a part of brands and experiences, which are bigger than the individual self. But the ‘we’ is promoted by some companies that, again, are getting advantage of ‘us’. If those big companies want to be part of the new paradigm, they have to understand we expect much more from them.