From apartments and offices spaces to cars, bikes, music and even financial loans, more people are participating in the “sharing economy”— online networks and marketplaces like AirBnb, NeighborGoods, or Uniiverse that allow people to rent or loan goods on a partial basis in order to save money.
Not just a phrase: Sharing is caring
Not only are these services cost-effective, they have the added benefit of helping the environment. Part-time “ownership” of a good means that fewer things are needed to begin with — fewer cars on the road (or in parking lots), fewer power tools in sheds, which reduces the materials needed for production and disposal. It also cuts transportation costs like fuel and storage, making it a very eco-friendly choice.
Mobile revolution is changing the consumer behavior
But whether for economic or environmental reasons, consumers’ interest in the sharing economy would be useless without the IT behind the services. Digital platforms have made it easy for anyone to inexpensively and effectively connect with others to find what they need, while mobile apps make it possible to borrow or share things on the go (especially crucial for transportation services). In fact, in many cases, mobile is critical to the functioning of the service, such as when using a smartphone to unlock a borrowed car.
How to secure the virtual credibility
Of course, sharing entails risk, especially when expensive items are concerned. For example, AirBnB was faced with its first PR disaster when an owner returned to find their home ransacked. The company was forced to offer $50,000 worth of insurance and reworked their response policies. While AirBnB seems to have recovered, not all companies have: in January, peer-to-peer car sharer HiGear shut down after several of its members’ luxury cars (worth a total of $400,000) were stolen. Despite the fact that they already had 5,000 members and $1.3 million in funding, the company felt they could not adequately protect their members’ assets.
New digital solutions are arising in an effort to gauge individuals’ trustworthiness. TrustCloud, for example, collects information from various social media sites and gives each user a TrustCard rating. While still in its early stages, the hope is that greater online accountability will make more people willing to participate.
We expect that collaborative consumption will only continue to grow in the next few years. In fact, SV Angel’s Ron Conway identified it as a major area of angel investment for 2012 and beyond. If you’ve already participated in a sharing service, what was your experience like?