Business Vancouver, 22 July 2014
One of the most disruptive business trends of recent years is growing at an alarming rate. It’s called the sharing economy, or collaborative consumption. The premise is pretty simple: use digital technology to reap the advantages of ownership without actually owning something, or to become a micro-entrepreneur without any investm
“New digital media technologies make it so much easier to find people who have stuff and connect them with people who want stuff,” said David Van Seters, president and CEO of Vancouver’s Sustainability Ventures.
The secret sauce is “double trust” – where buyers and sellers are rated (think eBay) and blacklisted if they can’t be trusted.
Four-year-old ride-sharing software provider Uber raised US$1.2 billion from investors last month, valuing the company at US$1.7 billion. This is more than Hertz and Avis Budget. On the hospitality side, Airbnb can lay claim to being the world’s largest “hotel” chain even though it doesn’t own a single hotel.
When its CEO heard that Marriott was about to add 30,000 rooms over the next year, he boasted that Airbnb will add that many in two weeks.
This new model is jumping because it delivers three desirable benefits. Pick one and you get the other two for free.
On the economic side, it mobilizes stranded assets and creates new revenue streams. Instead of a car sitting idle 22 hours a day and operating at 20% capacity when it’s moving, a shared car is on the move 24-7. Anyone who owns something can become a micro-entrepreneur. Consumers can get improved service at reduced costs.
From an environmental point of view, it reduces waste.
And from a community point of view, sharing deepens social and personal connections. The city of Seoul, Korea, has declared itself a “sharing city” in part because it wants to reduce household debt and garbage, but also because it wants to connect its growing number of isolated seniors and reduce their soaring suicide rates.