What's The Future Of The Sharing Economy?

As technology lets us share more and more items with greater and greater convenience, how far can the sharing economy go?

This piece is part of a Collaborative Fund-curated series on creativity and values written by thought leaders in the for-profit, for-good business space.

In 2009, I was a student in the inaugural graduate studies program of Singularity University. There we were challenged to come up with an idea that could impact 1 billion people within 10 years. Other groups chose to use 3-D printing to build homes in the developing world and mobile phones to create a better disaster response system. We chose to improve our transportation systems by empowering people everywhere to share their cars. This eventually became Getaround.

The Evolution of Sharing

A few years ago, no one would have thought peer-to-peer asset sharing would become such a big thing. With the immense popularity of Airbnb and the emergence of thousands of other sharing companies globally, 2012 has quickly become the year of sharing. Most articles on innovation list "sharing" as a game-changing idea or the hot trend to watch.

The hitch is, there’s nothing new about sharing. Individuals have been finding ways to increase their access to goods and services for some time. You needn’t go further than Small Town, USA, for proof. Chances are good you’ll find a library, laundromat, and what used to be a video rental store. That’s all the sharing economy.

For many years, these "classic" forms of sharing were part of everyday life. Individuals relied on public institutions and private corporations to maximize our access to things we couldn’t afford or didn’t see the value in purchasing ourselves. These organizations provided a formal framework in which to share, assuming the risk of owning the shared assets while enforcing rules and guidelines for participation.

The Present

More recently, there has been a surge in peer-to-peer sharing, and formal sharing institutions are quickly becoming a thing of the past. It doesn’t require an in-depth analysis to recognize the role of technology in this shift. What started online as the sharing of information has quickly turned into a full-fledged economy, with individuals sharing their homes, cars, and skills with the help of mobile devices.

As the sharing economy grows and individuals assume the risk of sharing personal property, they are turning to technology as a way to mitigate those risks. People renting their homes through services like Airbnb are relying on social network profiles and online reputations of potential renters to gauge who they should share their home with, while services such as TaskRabbit link directly into public records that allow them to perform background checks of potential "rabbits."

Other services have been using technology as a way to provide access to shared goods. Getaround, which enables people to rent cars from people nearby, allows users to grant and gain access to idle cars through mobile phones, allowing users to share assets regardless of geographic location.

This intersection of sharing and technology has contributed to an "own less, use more" mindset, backed by environmentalists and economists alike. By skipping platforms that require the production of new assets, like car rental agencies and hotels, we—as a society—are ultimately able to produce fewer goods while still having access to a broad variety of goods and services. The potential environmental impacts are significant: When measuring carbon emissions, home sharing is 66% more effective than hotels where as car sharing participants reduce their individual emissions by 40%.

Beyond its environmental impact, the sharing economy has been recognized as a way of empowering individuals to access more while owning less, stimulating local economies by keeping money spent in the community. Furthermore, while sharing supports local businesses, it also helps to forge new social networks, creating stronger, more tightly knit communities.

The Future

Today’s sharing economy was catalyzed by the social, economic, and technological trends of our time: The proliferation of social networks and mobile technology and a demand for environmentally responsible consumer products. Moving forward, these trends will continue to shape the way people share. While it’s impossible to predict the future, there are several technological advancements and trends on the horizon that are certain to impact sharing behavior.

Recent developments in the car industry provide some excellent insight into the opportunities ahead for other common consumer products. In recent years, connected cars have been a hot topic at automotive shows around the world. To date, the consumer-facing impact of this technology has been limited to new on-board "infotainment" centers allowing owners to connect to music, maps, and news online.

But as the connected car technology continues to advance, connected cars will likely find a place in the sharing economy, connecting drivers to passengers and passengers to cars. Not only will this technology make existing services like Zimride even easier to use, but it will also encourage car owners to maximize their resources by no longer riding alone, while also making money off their assets. The self-driving car is also going to have a large impact on the personal consumption of vehicles.

As someone dedicated to changing the way the world views, owns, and interacts with cars, these automotive advancements are vital. However, the larger trend of "designing for sharing" will have a major impact on how goods are consumed.

As more products are designed to interface directly with the Internet as well as with other products, it will become easier and easier to share an increasing number of goods and services. As assets become easier to track and easier to access, the process of sharing will be streamlined and the risks will be reduced.

The sky’s the limit for the sharing economy. Consumer behavior is shifting rapidly to be more selective, conscious, and community-based. Some of the major problems caused by hyper-consumption can be avoided by sharing more, and whatever people are willing to share, a good business can form to support this new behavior.

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8 Comments

  • Diego Albardonedo

    Good article! I have just a question, how do you thing the cultural context can affect the development of the  sharing economies? have you ever made a tipology of such enviromentes t know whether it is going to wor or not? 

    Tanks and happy saturday!

  • Artem Malykh

    I think there are couple of questions we need to take into accpunt:

    - why share was not actual before but now became actual?
    - what type of things people are able to share and what kind of things they are not able to share?
    - on which terms people are able to share and have common utilization of things?
    - what is necessary for people to be satisfied in a result of common utilization?
    - how the common utilization should be regulated?

  • Leah Neaderthal

    Great article, Jessica! I foresee a few developments the shareable economy as well. First, the creation of 'feeder businesses' that further enable the adoption and usage of shared services - Managebnb is one such company that provides property management services specifically tailored to short-term rental hosts like those on Airbnb, Homeaway, Roomorama, etc. The second development, as collaborative consumption companies continue growth in major cities, is the revision of government policies to better reflect these services. Some cities have imposed antiquated policies on things like room rentals, etc., but as these companies gain more clout they'll hopefully be able to work with city leaders to influence and update these outdated policies. Wishful thinking, perhaps, but it's worth hoping!

  • Kristine Olson

    We found the recent rise in consumer "sharing behavior" significant enough to justify commissioning a national study earlier this year.  To share the results with our clients (marketers), we created this video.  Clearly this train has left the station:  http://bit.ly/L0UHXe

  • Andrew Siegel

    Interesting article, however I see a significant difference between a service like AirBnB and the Library - i.e. motivation.  AirBnB and Laundromat's are not built on the premise of 'sharing' they are built on the premise of making a profit by monetizing an asset to its highest level.  Libraries are built around sharing, neighborhood 'tool boxes' are as well, but to compare these ideas with Hertz car rentals seems a bit of a stretch.

     

  • kaisershahid

    thank you! i always find it weird that some people (e.g. steve case) are trying to equate community/sharing with renting.