Tuesday, July 29, 2014

Sharing Economy

A recent column by Tom Friedman in the New York Times, “And Now for a Bit of Good News. . .” focuses on the emerging sharing economy. Perhaps one of the most intriguing aspects of this new sharing economy includes the way the entrepreneurial spirit has gone global and many of us are rethinking what we need to own vs. rent vs. do away with altogether. 

Examples of sharing economy ventures include:  

Lyft, UberRelayRides: car sharing services
BMW on Demand: BMW dealers rent their cars and motorcycles by the hour or the day 
SurfAir: a private airline membership club
LiquidSpace: on-demand workspaces by the hour or day booked directly online 
Vayable: local tour guides 
VRBO and Airbnb: individuals renting rooms, houses, apartments

Underlying the sharing economy is the importance of creating an identity, trust and a reputation through the feedback from the general public. At Airbnb, for instance, people are willing to rent rooms in other's homes by having an identity (through profiles), and reading about other's experiences. The "renters" in turn create a reputation through online reviews and are covered through a $1 million damage insurance provided by Airbnb. Guests also create a reputation based on the "renters" experience of their stay.

These new ventures are redefining lifestyles and proving simple and in many cases less expensive ways of booking hotel rooms, renting cars, offices, etc. The complaints from hotels, taxi and car rental businesses are being addressed by regulators who will hopefully find the "sweet spot" that protects the more traditional businesses while encouraging entrepreneurs to experiment with the new sharing economy.

Check these new ventures out, at an online store and app near you!  

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