Sharing is Caring – The Collaborative Economy

An ever growing concept in the modern age, the collaborative economy, or sharing economy as you may have heard it, is actually based on a very simple principle. Consumers are now able to get what they want from each other without the need for corporate middlemen.

More formally, it can be described as “a socio-economic system built around the sharing of human and physical resources” – Wikipedia. The core business idea involves unlocking the value of under-utilised assets.

Essentially, the most important currency involved in this model is trust. Let’s look at a few popular examples of how this new world model can lead to great success. Airbnb has revolutionised a market that has been around for longer than any of us can remember; the property market. How has the sharing economy impacted this, exactly? Well, I’m going on a holiday during the upcoming bank holiday weekend, in the quiet suburbs of Portimao, Portugal. There is a couple, Mr and Mrs Varela, who owns a home there. They live there most of the time. Currently, however, their apartment stands empty as they are away visiting family in Turkey. The Varelas would usually be content with this until they return from their holiday. The collaborative economy has changed that. Through Airbnb, they can very easily lease out their home for however long they would like, without all the extra headaches. I want to quickly find somewhere I trust to stay in for my weekend getaway. Airbnb allows me to connect directly with the Varelas. They tell me that the key will be left beneath the flowerpot on the corner tile of their driveway. And that is that.

Another example is Uber. Uber has come along and revolutionised the way we use taxi services. At the touch of a button, we have a taxi, only minutes away, and dedicated to us, with all the necessary driver credentials available for us to see, allowing us to feel safe and assured. Furthermore, no longer do taxi drivers have to suffer the anxiety of wondering whether the passenger is going to fumble around for change and run off before paying their fair. All payment is done via pre-determined card details. And that is that. Within 6 years of starting up, Uber has recently been valued at $40bn. The numbers speak for themselves.