2014 was a massive year for the sharing economy, certainly the biggest year thus far in the life cycle of the concept. For those who aren't familiar with this notion, the sharing economy simply refers to the any economic system or system of production which is based around the sharing of human and physical resources.
So what were the biggest trends in the sharing economy over the last twelve months?
1. Increased publicity
The concept of the sharing economy is still a relatively obscure one, and until very recently few people had even heard of it. It is not that long ago that a major survey of the UK public by Virgin found that only 5 percent of the population had even encountered the term sharing economy. Yet today, 64 percent Britons are regularly using the sharing economy in some capacity, and it has really become a central part of popular culture.
Global revenues for companies engaging in the sharing economy are set to hit $335 billion by 2025, and the UK government has recently commissioned an independent report into the concept indicating that this is a critical part of future commerce.
2. Life transformation
Unquestionably, the sharing economy has transformative potential for people from a wide variety of backgrounds, but this is perhaps most succinctly illustrated by the experience of Tracy DiNunzio, the CEO of Tradesy. DiNuzio stated that only a few years ago, when she initially made the decision to open her home to a stranger via Airbnb, she was barely even aware of what the shared economy was. Since then, it has completely transformed every element of her life, indicating the transformative capacity that the shared economy inherently possessives.
3. Sharing economy ‘space race’
Airbnb and Uber are probably the two biggest names in this particular field, and with both having come out of bohemian and liberal San Francisco, it would seem certain that the area has cemented a position as the world’s premier sharing destination. However, with the sharing economy growing in prominence across the world, numerous rival cities are beginning to challenge San Francisco, as it becomes clear that this is a lucrative niche with huge potential.
This is still a pretty much an unregulated industry, and any nation which is able to put sensible legislation in place to enhance the opportunities of businesses in this field could open up a massive competitive advantage. The sharing economy ‘space race’ is still very much in progress.
4. Some opposition
Not everyone is on board with the sharing economy. Uber has been massively successful, but has also suffered a backlash from both taxi drivers and bureaucrats in a wide variety of territories. While Uber remains an important part of the sharing economy, and an application with a potentially huge future, the current situation is that a degree of scepticism regarding Uber and other similar services must be overcome before they can reach their true potential.
However, what is key to understand with the sharing economy is that the consumer will ultimately dictate the marketplace. This very much differs from traditional business, in which numerous massive industrial sectors have been completely stitched up by massive corporations. Although the sharing economy has the potential to create such mega-companies, the need for competitiveness within the concept will always remain key.
The rise of technology and the unique characteristics of the sharing economy will put more power than ever before in the hands of consumers. While traditional service providers may object to this, the fact is that the sharing economy is going nowhere, and it will be necessary for people to adapt to it rather than decry it.
5. The future will be inclusive
The most successful companies in this niche are currently diligently planning their next steps as they look to further expand within the sharing economy. Airbnb is already looking beyond merely providing accommodation for trips, and is hoping to also serve customers in multiple other aspects of the travel experience. Uber, meanwhile, is experimenting with on demand cats(!) and ice-cream delivery, as this innovative sector diversifies. As the shared economy develops, it seems certain that some of the largest companies will tread on one another’s toes occasionally.
But the shared economy promises an inclusive future in which all services can be delivered to all people, regardless of earnings bracket and disposable income. The shared economy may offer huge opportunities to people of modest means that weren't open to them previously once it matures, and in this regard we should all welcome it with open arms.
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