So what’s the Sharing Economy and why should we care?
The Sharing Economy is a phenomenon. The major idea behind it, is that sharing products is more efficient than owning them individually. There’s a global paradigm shift and a collective consciousness now around our planet and how we use and abuse it, and a global trend away from asset ownership and that movement when it collides with the digital age and accelerated business models through technology enablement, breeds the most exciting decade for sustainable change that we’ve ever seen.
So the Sharing Economy is about asset utilisation. Deriving value from the underuse of our assets whether that be our car, our home, bach, boat, snowboard or lawn mower etc.
Global predictions predict growth in the sector from $15B in 2014 to $335B by 2025. It’s big!
The principles around Sharing Economy are:
• It’s enabled through an internet connection via a tech platform that marries the needs of an asset ‘owner’ to the requirements of a ‘borrower/user’.
• The tech provider is the interface for the transaction and doesn’t own the asset.
As is often quoted, Uber own no vehicles, Airbnb own no homes/hotels, Facebook creates no content.
• When they get the model right, there is rapid exponential growth like we’ve never seen before in a sustainable business model
• Response rates are rapid due to data. Data is key and an asset value all of its own.
• It’s about community. Online reviews/ratings serve as quality control building trust and reputation. This is critical if you want to remain a member.
In NZ we’re already very familiar with some of the big players in this space such as Uber and AirBnb but there’s a rash of start up and new entrants to the market right now with a high proportion coming from the Transport Sector which seem to fit into 3 types: ride share (eg. Uber), car share (eg. Roam, YourDrive), car pool (eg. Chariot)
Technology is making these new business models and new ways of asset sharing available for us. There is no doubt, the net result of the sharing economy’s potential will positively impact NZ’s future economic growth. But technology is moving ahead faster than the regulation change required to enable the new models and this is a challenge.
So, gone are the days of my borrowing your car for a weekend and returned it with $20 for gas or a box of beers! Before, my car might sit in a car park all day while I work, tomorrow it’s on an App and everybody in the vicinity that I choose, can rent it. When you consider, the average usage of a vehicle in NZ is 5% and for every car-share vehicle you can potentially take 10 cars off the road, that gives me a new income source that’s now trackable and it gives the government taxation and offers some accelerated solutioning to some of the big challenges around carbon emission, traffic volume, noise and air pollution.
But think beyond transport, look out for the other 4 sharing sectors: peer-to-peer staff share, finance, travel and video/music streaming.
About the Author: Colette Campbell
Colette is Innovation Manager at IAG Insurance Group NZ. With a business background including innovation, strategy & venturing, she leads innovation activity across the portfolio of brands (AMI/State/NZI/Lumley). She’s specialised in the future of Motor Vehicle and last week won an IAG Award for a significant Innovation project that resulted in the launch of a whole new category of insurance in the Sharing Economy space for transport. She believes company culture is the core success factor in driving future proofing thinking.