What's Next for the Sharing Economy?
Have you heard the one about the Silicon Valley executive who went all-in on the sharing economy? First the guy sold his BMW and opted to take Uber to and from work every day; then he converted his empty garage into an apartment that he rented out on Airbnb.
It doesn’t matter whether this tale is true (many believe it is); the mere fact that it exists indicates that the sharing economy has arrived in a big way.
While there are no current estimates for market capitalization overall, Uber, the company that specializes in ride-sharing, recently was valued at more than $18 billion, and various reports place Airbnb’s value at $10 billion. Now that the industry has changed the way we look at supply and demand, what happens next?
For starters, diversification. The sharing economy will breed new companies designed to enable greater numbers of customers to take advantage of peer-to-peer moneymaking opportunities. In particular, the niche is primed for a number of service companies to make entry into the sharing economy easier than ever before, according to Arun Sundararajan, a professor at New York University’s Stern School of Business.
“The next wave of opportunities in businesses will be companies that look at how we support development of the sharing economy,” says Sundararajan, who specializes in the digital economy and the economics of sharing (among other subjects). “This means companies that make it easier for everyone to play a part, companies that really bring peer-to-peer into everyone’s life.”
Two companies that support Sundararajan’s theory: Breeze and the Evolve Vacation Rental Network. San Francisco-based Breeze, founded this year, offers customers week-by-week access to vehicles they can use to support jobs as drivers for Uber, Lyft and other sharing-economy platforms; co-founder Jeffrey Pang describes the service as an “equalizer” for those who want to get in on the action but don’t have cars of their own.
Denver-based Evolve, meanwhile, peddles comprehensive listing-management services for customers who want to post homes on the HomeAway network (VRBO.com, HomeAway.com and VacationRentals.com); services include creating a listing, securing professional photography and setting rates.
“The best marketplace is only as good as its suppliers,” says Evolve co-founder Brian Egan of his company’s position in the sharing-economy ecosystem. “Marketplaces in our space are established; now we just need more suppliers to fill them out.”
Another trend in the next phase of the sharing economy: expansion. Sundararajan predicts that established companies will branch out into new product lines, such as Uber getting into delivery services.
At the same time, growth means more opportunities in different industries. In particular, Sundararajan says, renewable energy and consumer healthcare industries are prime for a peer-to-peer infusion. He cites as examples Mosaic, an Oakland, Calif., company that facilitates crowdfunding loans for someone else’s solar panel array, and India-based tripMD, which helps users find high-quality medical care outside of North America.
Shelby Clark, the new executive director of Peers, a San Francisco-based organization that supports members of the sharing economy, embraces these developments, noting that ultimately there will be dozens of companies working to bridge service gaps and make work more efficient.
“Connecting people almost always leads to good,” he says. “As the marketplace grows, so too will the number of opportunities to get involved.”