Sharing is not new. Entrepreneurs always thought of ways to save or make money with things they owned but not used all the time, such as renting out unused office space or large machinery. Some businesses are built on the premise of temporary sharing, such as the fence rentals for construction projects and events. Pop-up stores and hotels, temporary stores and lodging at unused spaces, have perfected the concept of sharing.
It makes perfect sense in any economic market situation. And we have so much to share, even at home: There are spare bedrooms, bicycles that are only used once in a month, a tuxedo that you wear once a year, a tent for the camping trip over Memorial Day, and a collection of gadgets that work perfectly well but are unused as you moved on to the latest and greatest.
In our consumption-based society, we accumulate more than we need. There are ways to “recycle” things like cloths, gadgets, and furniture, at Sunday garage sales, on Craigslist and via eBay. Our consumption habits have also sparked new entrepreneurial ideas, making sharing more economically and green.
One of the first companies to take this concept to the masses was ZipCar, offering an alternative to traditional car rental in large cities with membership-based car sharing. ZipCar has become the world's largest car sharing and car club service. Other companies followed suit, with different approaches. Instead of having its own car fleet, RelayRides, Zimride, Spride, and Getaround built an online platform that allows users to share the cars they own with others. In Europe, Carpooling.com services more than 1 million people each month. The company says that since their launch they have saved “1,000,000 tons of carbon emissions, 500,000,000 liters of gas, over 1.5 billion Euros, and more than 16 marriages.” Lowering carbon emissions is very attractive to large enterprises that are looking for ways to meet their sustainability pools. Increasingly large companies are offering car pooling services to employees and encourage ride sharing. For example, Colgate University offers an online tool called Purpool to organize car pools. The second example is airbnb.com, which allows you rent a place in “34,183 cities and 192 countries.”
The shared economy is not just for startups. Large companies have also started looking at market opportunity. Avis recently acquired ZipCar for $500 million USD. Enterprise software vendor SAP plans to launch its car pooling app TwoGo externally later this year to the marketplace.
New business models are developed on the premise that people are sharing almost everything, from apartments to books to pets. However, the new person-to-person (P2P) transaction model is not without challenges. For example, municipal governments are looking for ways to collect revenue on these deals, while some are calling for more regulation of this burgeoning industry.
While the models are evolving, the key question for entrepreneurs is: What are we not sharing yet, that we could share easily? Can you share your dog or cat that is waiting by the door for you to get home? Would someone pay for your dog’s companionship while you are working, instead of hiring a dog sitter?
We are just at the beginning of a shared economy. We will see new ways of sharing as the role of technology becomes more prominent than ever to develop and facilitate new business models that are based on sharing. Sharing is caring after all.
What would you share that you are not sharing already? Let us know.