Sharing Economy–Collaborative Consumption–Peer-to-Peer: Next Big Business Model–Access Vs Own–Disruptive or Fad…

Sharing economy is here… it’s no longer just emerging… the sharing marketplace accommodates consumers that simply want nimble; quick-easy-cost effective… access to things, instead of outright ownership of them… ~Lynn Franz

Sharing economy or also known as collaborative consumption or peer-to-peer is a growing trend in the overall economy… Sharing is an old idea, but its potential to generate economic opportunities is only just beginning… it’s a new type of enterprise that strives to make it easy for people to share resources. The sharing economy is an economic model based on accessing resources rather than owning them. For example, if you need a pickup truck to move stuff– neighbor lends his truck, or if you need a place to stay for a few days– friend has an extra room…

Now, extend that model to anything and use web-based social networking to connect with the entire world – not just your neighborhood. That’s the sharing economy. According to Erica Swallow; it’s getting to the point where access to goods-skills is more important than ownership of them… and the benefits are hard to argue– lower costs, less waste, and the creation of global communities with neighborly value…

According to Joe Kraus; the sharing economy is a real trend… and the sharing concept has created markets out of things that were not considered monetizable assets before… Forbes researchers estimate that the revenue flowing through the share economy directly into people’s wallets will surpass $3.5 billion this year, with growth exceeding 25%. At that rate peer-to-peer sharing is moving from an income boost in a stagnant wage market into a disruptive economic force.

According to Lisa Gansky,  we are moving from a world organized around ownership to one organized around access to assets… However, economists remain perplexed as to how to measure all this activity, according to Arun Sundararajan; we’re going to have to invent new economics to capture the impact of the sharing economy… The big question is whether this all creates new value or just replaces existing businesses. The answer is surely both. It’s classic creative destruction...

In addition, there are regulatory issues, for example; New York and San Francisco, fueled by pressure from annoyed neighbors, have enacted laws that try to crimp short-term house rentals. Also, California has cited ride-sharing services for operating without a taxi license. And there are all sorts of tax questions such as; whether an overnight stay should be hit with a local hotel tax… However, some experts believe that it’s just a matter of time before regulators catch up to innovation…

According to ‘The Economist’; the sharing economy is definitely a movement that will grow by orders of magnitude in the future, so get ready to share!

In the article We’re Entering A New Trust Economy by Scott Annan writes: The idea of spare capacity is not a new one. A factory that can produce 100 widgets but that only has current demand for 80, then can rent out spare capacity to another company for the production of 20 extra widgets, thus enabling the factory owner to maximize its resources and optimize its ROI. But applying the notion of spare capacity to an individual is more novel. More individuals are viewing themselves as businesses.

Take the Airbnb model, for example; it’s a site that allows owners of homes to rent out spare rooms, apartments, or entire houses when they are not being used – in effect, creating a whole class of business owners whose main asset is its spare capacity. Lyft is another application that enables owners of cars to rent out rides when they have availability.

The ability to provide the use of an otherwise depreciating asset for the purpose of capitalizing on spare capacity is a significant development in the economy. Moreover, the ingredient that makes the share economy that much more potent is the way that we have commoditized trust – in essence, turning it into a currency. Welcome to the share economy – the marketplace that takes spare capacity and injects it with instantaneous demand…

In the article The Sharing Economy by Danielle Sacks writes: The central conceit of collaborative consumption is simple: Access to goods and skills is more important than ownership of them. According to Rachel Botsman; this world has three neat buckets: first, product-service systems that facilitate the sharing or renting of a product (i.e., car sharing); second, redistribution markets, which enable the re-ownership of a product (i.e., Craigslist); and third, collaborative lifestyles in which assets and skills can be shared (i.e., coworking spaces). The benefits are hard to argue — lower costs, less waste, and the creation of global communities with neighborly values.

The earliest of these marketplaces, e.g., Freecycle and CouchSurfing, encouraged the exchange of goods among peers for free. But the latest sharing platforms are anchored in commerce. They have the potential to amass a new ecosystem of entrepreneurs, just as eBay aggregated fragmented buyers and sellers into a global online marketplace. Gartner Group researchers estimate that the peer-to-peer financial-lending market will reach $5 billion by 2013. Frost & Sullivan projects that car-sharing revenues in North America alone will hit $3.3 billion by 2016.

Also, Botsman says; consumer peer-to-peer rental market will become a $26 billion sector and believes the sharing economy, total, is $110 billion-plus market… The sharing economy is at an interesting junctures where no one knows how big it might get or how many industries-companies it might affect…

In the article Is Sharing Illegal? by Lonnie Shekhtman writes: Governments have their work cut-out in keeping pace with innovation, especially as mobile, social, and cloud technologies allow for new business models that, in the eyes of regulators, threaten consumer safety and incumbent industries. The most poignant current-day example of tug-of-war between government and technology entrepreneurs is the legal quagmire many ‘sharing’ or ‘collaborative consumption’ companies face in the cities they operate.

The problem, at least for home- and car-sharing services, is multifaceted: they’re agitating dozens of stakeholders, operating in uncharted territories and legally indefinable. And, indefinable is hard to regulate. The problem for sharing companies is municipal laws are outdated, forcing regulators to squeeze square pegs into round holes.

Government is usually the last one to pick-up on innovations… For example, anyone in San Francisco who’s renting out their home for less than 30 days is doing it illegally… And, people renting out a secondary residence on the short-term will need to get a bed-and-breakfast license. While home-sharing services work to untangle the home-rental web, ride-sharing is grappling with its own set of legal woes… where the big problem (besides an enraged taxi and limo industry) is that the California Public Utilities Commission (CPUC) is relying on laws that have been in place since the 1970s, classifying companies as limousine services.

According to CPUC; effects of this new business model and its level of activity on public safety are unknown… Some experts say; the lesson is where you’ve got fast-moving dynamic sector that doesn’t fit into regulatory framework, do not rush to regulate until you understand what you’re dealing with…

In the article Share Everything: Why the Way We Consume Has Changed Forever by Emily Badger writes: The so-called sharing economy is described as being about many things, for example; millennial rejecting car ownership, environmentally conscious glooming onto the latest eco-trend, broke urbanites who will want all their own stuff again as soon as the economy recovers…

Sharing is an old idea. We’re used it in sharing– libraries, public parks, train cars… But in many ways American culture has drifted away from sharing as a value when people spread out from city centers into suburbs. People came to prize personal ownership– multiple cars, large homes… But today people are undergoing a cultural shift-transitional change in traditional paradigm. The last few years much has changed: the economy, technology, allure of cities… Also, we are witnessing a paradigm shift toward sharing in the offline world because of the online technology that enables it.

None of technology, including; Internet payment models, network search tools, identity verification systems… make trust in people at least somewhat possible… and trust is cornerstone for sharing. The Internet has essentially allowed us to expand the circle of people with whom we share… But fundamentally, the open-source culture of the www has taught us how to share and made sharing default of social interaction. According to Lee Rainie; there’s some pretty good empirical evidence that people can get in a habit of sharing…

The emerging marketplaces of sharing or collaborative consumption is redefining the ways goods-services are exchanged and valued. Habits of sharing that have existed in small, informal networks for most of human existence is beginning to blossomed into a market for micro-entrepreneurship that spans the globe.

This enterprise is fundamentally capitalist, yet simultaneously more socially and environmentally conscious, and it’s made possible by the emergence of new networked social tools and  cultural shifts toward peer-to-peer commerce that makes trust and efficient exchange between strangers possible.

Sharing is a major economic, social, and cultural shift. However, despite the excitement surrounding the new ventures; this emerging industry faces significant challenges… For example, when a new industry or technology emerges, government frequently relies on past models as it figures-out how to regulate the new enterprises…

Companies within the sharing economy need realistic government regulations that allow them to operate… they need protection from established companies that use government to kill competition… they need tax structure that does not penalize sharing… The sharing economy is taking shape within both; for-profit businesses and nonprofit mission-driven organizations…

According to Erica Swallow; the common theme– sharing is, for the most part, about value. While there are a number of non-financial reasons for participating in the sharing economy, most people agreed that the number one driver is cost savings. However, people in the sharing economy are not driven by the ethos of sharing, but by the fact that they are making real money… Even though most people are talking about sharing as a movement, most sharing enterprise people don’t care about movements– they care about real results… they care about convenience, savings, environment… people use ZipCar because it’s convenient.

According to Jonathan Clark; whether sharing is truly a shift in consumer behavior or just a glitch on the radar at the very least it has shifted the mindset of many people. People have a new space in which to reallocate resources and lessen waste. People have been sharing for ages, but the Internet is making the sharing economy, collaborative consumption… marketplaces– larger, easier, simpler, more profitable…