Over the last years people’s interest in the sharing economy has tremendously increased. It is a market based, for instance, on sharing or renting products and services, enabling access over ownership and reinventing what and how people consume. In the last four years hundreds of companies entered the sharing economy market and have featured an online market place through which private people were given the opportunity to rent their privately-owned assets, like apartments (e.g. Airbnb), cars (e.g. RelayRides) or even parking lots (e.g. Parking Panda), to other private people for a certain period of time.
In 2013, the revenue of private people through the sharing economy reached approximately $3.5 billion, with growth exceeding 25%, and the size of the peer-to-peer market in general was estimated $26 billion. These numbers clearly highlight the market being already big and disruptive enough to have a great impact on traditional markets. People want to be able to use assets when needed instead of owing them. This trend to greater flexibility emphasizes the high potential the market has.
One of the biggest drivers for the sharing economy market is the technological advancement. It has lowered the barriers so that anyone can enter both sides of the market place and thus can either offer their privately-owned assets or rent assets of other private people. In the peer-to-peer car sharing market, for example, it is expected that more than 9 Mio. members of different car sharing providers will be connected and will share approximately 150,000 cars in the US and Europe in 2016.
The economic crisis increased unemployment rates and lowered purchasing power. Thus, the business model of the sharing economy is highly welcomed by the society.On the one hand it gives people the opportunity to generate a new source of income besides their actual job or as their only job. They even can evade the accrued taxes that usually must be paid when offering products or services commercially. Since legislators are passing laws to guard against tax evasion, this advantage is likely to diminish. On the other hand people can be flexible and mobile without actually buying a car and bearing all accompanied costs. In contrast to traditional car renting companies, like Sixt or Europcar, consumers can even benefit from lower prices and more convenience.
The consumer’s attitude of dealing with ownership has changed. For most of the people, who follow this trend, a car, for instance, is not a symbol of status anymore. It is rather an asset to use and also to capitalize on. If obstacles, like legislative regulations, will not prevent the sharing economy from further growth, traditional markets will face more difficulties with keeping their offers attractive and thus, will not be prevented to overthink their current business models.
Julia Fuechsl – 724