Is the Sharing Economy High Over?

A slate of startup closures could signal that the hangover has finally arrived.

learn more about Catherine Clifford

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Oh, how quickly the world turns. Just over a year ago, Tripda was celebrating an $11-million series A round that was led by Berlin-based Rocket Internet, which invests in ecommerce companies. On Friday, it will coordinate its last shared ride.

Tripda rose among other startups riding the tidal wave created by Uber and Airbnb. These eager-beaver entrepreneurs looked to stake their claim to a slice of what they thought was the next hottest, world-changing industry: the sharing economy. Startup dreams spawned an Uber or Airbnb of everything. And now comes the hangover.

This summer, on-demand cleaning service Homejoy announced that it was closing down. As with Tripda, San Francisco-based Homejoy -- which battled another on-demand cleaning service, Handy -- said that it wasn't able to raise enough money to continue operating.

Related: What the HomeJoy Failure Tells Us About the Future of the On-Demand Economy

Another sharing economy startup that, by the founder's own admission, was born of an idealistic, slightly-naive desire to change the world and ended up run into the ground is Neighborrow. The idea for Neighborrow was that if you lived near by someone with a power drill, then you didn't really need to own one yourself.

It all sounded awesome. Neighborrow founder Adam Berk was featured on CNBC and became the darling of business bloggers. "The problem was people liked the idea of our idea, not our solution. Journalists flocked to write about us, but they never signed up for the service," writes Berk in a Pando-daily confessional, post-mortem. "For the rest of the "sharing economy,' it is going to take more than building a platform and expecting people to share. Here's a sad fact: Most people do not want to share. They want convenience."

Related: How Patience and Good Timing Paid Off for This Super Hot Startup

There's the rub and the diamond at the same time. The sharing economy startups that have done well and continue to do well are those that get in early, are the market leader in the space, and are more appealing to consumers' laziness and desire to save money than their actual desire to share and be green.
Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Related Topics

Editor's Pick

This 61-Year-Old Grandma Who Made $35,000 in the Medical Field Now Earns 7 Figures in Retirement
A 'Quiet Promotion' Will Cost You a Lot — Use This Expert's 4-Step Strategy to Avoid It
3 Red Flags on Your LinkedIn Profile That Scare Clients Away
'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.
Leadership

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Business News

Meteorologist Breaks Silence on Horrifying On-Air Collapse: 'I Started to Feel a Little Nausea'

KCAL meteorologist Alissa Carlson Schwartz fainted on-air during a live broadcast over the weekend.

Marketing

How Do I Know I'm Getting the Most Out of My Business? The Answer Is Obvious — Yet Overlooked.

Explore how you can leverage first-party data to drive better results and make more informed decisions.

Career

4 F1 Racing Lessons That Can Accelerate Your Career

For F1 drivers like Lewis Hamilton and Max Verstappen, these racing lessons are second nature, but they don't just apply to the tracks — they can also help to position you as a leader and accelerate your success as an entrepreneur.