Many of us are now participating in something called “the sharing economy” without even knowing it. This growing force within our economy is changing the way many people live their day-to-day lives and is starting to make companies, big and small, rethink how they do business. Even if you don’t know much about the sharing economy, you’ve probably heard about at least one of the companies leading the charge, including Uber, Zipcar, Divvy Bikes, Airbnb, RelayRides and TaskRabbit.
What is the sharing economy?
The sharing economy is a style of business where people rent the things they need to use for short amounts of time from companies (or other people) who own the things they need to use.
Let’s use Zipcar as an example. Zipcar rents cars to people by the hour, which is a big advantage to people who only need to use a car for a short period of time, such as a trip to the grocery store. (The Zipcar business model works particularly well in highly populated areas where many people don’t own cars). Before Zipcar, the only option these customers had was to rent a car for at least an entire day through traditional rental car companies, even if they only needed a car for an hour or so. From the company’s perspective, Zipcar can be profitable because they’re typically able to rent out each car to multiple people in one day.
As noted in The Economist, the main reason the sharing economy works is that people are now realizing in many cases that “access trumps ownership.” In our Zipcar example, it’s more important that people have access to a car during the short timeframes they actually need it, rather than owning the car and having 24-7 access to a car that will sit unused in a garage for large periods of time.
Old names getting into the new game
You might think that the sharing economy sounds like something that you’d have to live in Austin or San Francisco to be hip enough to get, but even the big traditional companies are beginning to figure out ways that they can use the sharing economy to their advantage.
Bigger names like Pepsi and Walgreens have partnered with TaskRabbit for PR buzz. Earlier this winter, Walgreens partnered with TaskRabbit to “allow deliveries of over-the-counter cold medicine” to customers who were sick and didn’t want to get out of bed. And in a 2012 promotional campaign for their Pepsi Next soft drink, Pepsi gave one hour of TaskRabbit services to 200 of their customers. The idea was that Pepsi would “do an hour of your chores so you have time to enjoy the unbelievable taste of Pepsi Next.” And perhaps the most substantial level of a traditional company becoming involved in the sharing economy comes from Avis Budget Group and their acquisition of Zipcar in early 2013.
More and more frequently, big established companies are realizing the power and new opportunities of the sharing economy. This new force won’t completely take over how the big names already do business, but it will likely have an impact that’s similar to the one online shopping has had in the last ten years. What used to be different and new could eventually become the tried-and-true norm that all the big brands learn to adapt as their own.