SHARED ECONOMY

SHARED ECONOMY

A wise man once told me that the world is made up of the haves and have not.

I pondered on that statement for many years because the impression I had was that everyone has gifts and abilities in their own measure. So why did that old sage say that some people have and others don’t have.

The answer is what this article is about.

For Example, When you don’t have money to start a business (have not), you go to a bank that has money to lend you. In this context, the bank has money, but you don’t have money.

One thing is certain in Economics, “Human beings are insatiable.”

That insatiability in humans has made crave to own the best things in life ranging from cars, gadgets, houses, furniture and even computers.

What these means is that we will still be left with people who have these gadgets and those who don’t have. What could possibly be the way out for the have not.

Welcome to the world of the Shared Economy.

A shared economy is an economic model in which individuals and businesses are able to borrow or rent assets owned by someone else.

 The shared economy model is deployed when the price of a particular asset is high and the asset is not fully utilized at all times.

Fast Company also defined Shared or Collaborative Economy as an economic system of decentralized networks and marketplaces that unlocks the value of underused assets by matching needs and haves, in ways that bypass middlemen.

A typical Example is the Uber Model that enables upwardly mobile people to move around in clean exotic cars, even though they don’t own cars. 

The benefit of this model is that while the owner of the car is at work from 9am to 5pm, his car is earning him revenue.

This brings me to a fundamental question which is: What’s the best use of your asset?

If you have a generator that has never been used in a year, a good car that has not been driven in 6 months, a spare house which has not been inhabited in a year. Maybe you need to start considering shared economy.

Let me share some statistics:

As at March 8^th 2013, 40,000 people rented accommodation from a service that offers 250,000 rooms in 30,000 cities in 192 countries.

They chose their rooms and paid for everything online.

But their beds were provided by private individuals, rather than a hotel chain. Hosts and guests were matched up by AirBnB, a firm based in San Francisco, USA.

Since its launch in 2008 more than 4 million people have used it—2.5 million of them in 2012 alone.

AirBnB has 50 million users as of September 2015.

As of May 2015, roughly 500 000 people stayed on AirBnB per night.

It took Uber six years to complete a billion rides in December 2015.

However, in June 2016, six months later, Uber announced that they have completed two-billion rides.

Uber has 40 million active riders in a month.

Uber has 160,000 drivers that drive in 450 cities, in 70 countries.

Trip Advisor has 26 million photographs uploaded to date, made $944,700,000 in 2013 and has 70,000,000 members around the world.

Trip Advisor has 190,000,000 total numbers of reviews and opinions.

Netflix, (an online movie rental company) has 34 million international subscribers and 47 million US Subscribers.

Netflix users have spent over 42.5 billion hours streaming movies since 2015, while 11 billion hours have been spent watching Netflix every month.

What these statistics have showed is that human beings have a higher propensity to rent than own expensive assets, so maybe we should begin to seriously look at joining the bandwagon of the shared economy.

So I ask you to keep pondering on these questions:

Why buy it when you can rent it or share with someone?

Why have it and not use it, when you can rent it to someone who really wants it and will pay you to use it for a while?

How do we join the shared economy?

What can we sell in this shared economy?