Introduction to the sharing economy
Objectives & Goals Click to read
At the end of this module you will be able to:
Understand the values and main features of sharing economy
Know the differences between traditional and sharing economy
Launch a business in sharing economy
Ensure and match supply and demand on a sharing platform
Be competitive and innovative in the sharing economy market
A definitionClick to read
Sharing economy can be described as a new economic model in which goods and resources are exchanged or shared among individuals and groups in a collaborative way, such that physical assets become services.
Sharing economy is strictly relayed to the development of new technologies of information and communication, which are combined with everlasting communal modes of operation.
Here some of the most famous examples:
Main featuresClick to read
History of sharing economyClick to read
Sharing Economy has developed in the United States, starting from 2008 as a reaction to the financial crisis.
However, its basic idea is relatively old; the innovative feature is how network technology makes sharing possible on a global scale.
Such model proves how digital technologies deeply affect the social structure and social interactions.
Sharing Economy has been one of the most rapidly growing market in history.
Since 2010, investors have contributed over $23 billion in venture capital funding to start-ups using a share-based business model.
This phenomena gained great popularity through two start-up enterprises from San Francisco: Airbnb and Uber. The latter became the largest taxi company in the world in 10 years. It has revolutionised transport services by putting self-employed drivers directly in contact with other people through a digital platform.
Did you know that...
Advantages and disadvantages for services’ providersClick to read
Types of platformsClick to read
The Perren & Kozinest MatrixClick to read
How to start a business in sharing economy
Business ideaClick to read
To launch a business in sharing economy, it is important to:
“Take the time to look for real problems that need real solutions, problems that can be best solved by communities themselves.” Sharing is good (Buczynski, 2013)
To get inspired these are some potential business ideas that might be adjusted to a particular target group or to a local context.
How to startClick to read
1. First of all, carry out desk research to find out “real problems that need real solutions”
2. After identifying the business idea, based on your experience and the results of the desk research, Test & Validate your idea
Case in point:
3. Once validated, find out for investors willing to support your idea.
4. Before the official launch of the product, a minimum viable product version of the platform should be launched so to collect feedbacks from the first users.
5. After the fine-tuning based on the inputs received, the business is ready to start.
Supply and DemandClick to read
Sharing economy operates through two sided platforms, feeding both supply and demand.
How to balance supply and demand in sharing economy?
While traditional firms can fire or hire employees, in sharing economy there are alternative strategies:
Crowdsource supplyClick to read
Tips & TricksClick to read
1. Foster Trust
Case in point:
2. Keep payments simple
3. Brand-building, networking and communication
How to be competitiveClick to read
Today, there are plenty of sharing services and platforms available.
People choose those services mainly because of lower prices; in order to keep the offer attractive, it is therefore necessary to be competitive in the price positioning.
However, if the final goal is to create innovative solutions, there is much more to be done:
Lack of regulation in sharing economy often results in the exploitation of the suppliers or negatively affects the traditional economy.
There is an increasing awareness of the “dark sides” of sharing economy; for this reason, people are more and more in search for fairer and sustainable ways of consumption.
New businesses should bring back sharing economy to its original meaning, to the creation and development of:
Summing upClick to read
Sharing Economy, Sharing PlatformsObjectives/goals:
Perren & Kozinets (2018), Lateral Exchange Markets
Buczynski B. (2013), Sharing is good. How to Save Money, Time and Resources through Collaborative Consumption, New society Publishers.
Heinonen S. & Poutanen W. (2019), Communal sharing helps the environment in rural areas, Circblog (consulted on 2022/11/20)
Collin P. (2021), The sharing economy: Definition, examples and advantages, Selectrta (consulted on 2022/11/20)
Women Forum for Economy & Society – A sharing economy?