There are quite a lot of buzzwords that fly around when describing our modern world. One of the most common is ‘sharing economy’. It’s mentioned in business copy, politicians’ speeches and newspapers.
But what does it mean?
In this article, we’ll sum up the basics, and give a quick rundown of some examples, from getting funding for your projects to finding parking in a big city like Birmingham.
Everything You Ever Wanted to Know About the Sharing Economy
What is the sharing economy?
As the name suggests, the sharing economy is all about one thing: sharing. Sometimes known as the ‘collaborative economy’, it’s all about individuals getting together to fill each other’s needs so that both parties benefit.
If I have a car I enjoy driving, for instance, and you need a ride somewhere, I can offer to drive you there in exchange for something I want — usually a fee.
If we can agree on a trade, then bingo: we’re now participating in the sharing economy.
How does the sharing economy work?
While sharing often occurs between individuals, the sharing economy usually focuses on platforms — places in real life or (more often) online that connect those who can provide goods or services to those who need them.
Benefits of this include:
- Saving time and effort
- Providing safety and security
- Taking care of payments
In most cases, you can sign up, confirm your identity and start sharing.
Examples of the Sharing Economy
1. Stashbee
The sharing economy is about more than just money: it also provides collaborative ways to provide goods and services.
In Stashbee’s case, the goods provided is storage or parking space, and the process is simple: those with excess space sign up as hosts, and those who need parking or storage can search for what they need by location.
As with many sharing economy platforms, Stashbee provides services like host verification and booking protection.
2. Peer-to-peer lending
Peer-to-peer (P2P) lending is perhaps the purest example of the sharing economy. P2P providers connect those who need a loan to those who can provide one.
One way of looking at this is that those with money in the present share it with those who expect to have money in the future.
The key innovation here is that there is no middleman. With no banks to take a cut, lenders get higher rates of interest while borrowers pay less in total.
It’s not for everyone, but P2P lending can be great for both budding investors and entrepreneurs.
3. Crowdfunding
Unlike P2P lending, crowdfunding is more about using the sharing economy to get a grant. Loans need to be repaid in full and with interest, but crowdfunders don’t generally expect this sort of reimbursement.
Instead, they donate money to support a product or cause they care about. While they do tend to get rewards like early access to or discounts on the final product, funders are more often in it because they genuinely care.
For creators, crowdfunding can be the perfect way to get support for an idea or project that’s too novel for traditional funding sources — and can help make creative careers more achievable than ever before.
4. Ride-sharing
Ride-sharing is perhaps the most visible example of the sharing economy in our day-to-day lives.
In many cities, I’ll call an Uber has become almost as common a phrase as I’ll call a cab, and it’s easy to see why. Customers know exactly how much each trip will cost, drivers get to make some extra money on the side, and both are kept safe and accountable by rating systems and payment processing.
Hopefully, this article has given you a good idea of what the sharing economy is and how it works — and maybe even some notions of how to benefit from it yourself.
