Written ByThe concept of shared economy draws people all over the world closer together; offering opportunities that have not previously been within reach. And this rise has gone hand-in-hand with the exponential expansion of the digital sphere.
The ever-shifting world of digital is forcing a change in expectations around traditional business models and rewriting existing rules; old models are rendered redundant by the rapidly expanding digital scape and ‘Shared Economy’ is part of this phenomenon.
Shared economy is based largely on trust: the provider and consumer sign-up through an online service and conduct their transactions and interactions via an app or website. The likes of Uber, Airbnb, Borrowmydoggy, Deliveroo and Taskrabbit function around the premise of buying a service from someone that you have never met and this premise has become a very successful reality.
For instance, Taskrabbit was set up in 2009 as an application that allows users to find individuals who are available to run errands or tasks for them, Taskrabbit is now a million-dollar business ‘…with $40 million from investors, the startup has expanded to nine cities … the number of TaskRabbit bookings has double in the past year…’ [i]
The blurring of conventional lines between consumers and businesses makes the economy more dynamic and multifaceted, the internet makes everything ready and available in a moment; making the previously inaccessible available for all. And according to PwC consumers are less fussed about ownership preferring the choice that shared economy provides: ‘…43% of consumers expressed that owning today feels like a burden…’ [ii] and ‘…72% say they could see themselves becoming a shared economy consumer…’ [iii]
Shared economy relies heavily on instant connectivity, through social media, websites and apps, trust is the ultimate currency. When businesses that own no solid assets can start to influence the marketplace, the consumer must feel very secure in what they are buying. It’s safe to say that without the aid of digital platforms, social media and the internet, shared economy would have fallen flat on its face. Technology has aided in the drastic reduction of transactional costs and as a result shared-assets are cheaper than ever, it has therefore been possible to build on these assets on a much larger scale.
The likes of Airbnb and Uber have helped to create an entirely new market place in less than a decade, trust and transparency have been prioritised as the most lucrative company asset. In a world where business, organisations, communities and individuals all exist in the same digital space, the value of a business ultimately sits in software interfaces and transparency not in the products they are selling.