So you have a lot of stuff and want to share? Part 1
Understanding the Sharing Economy and what it means for some industries.
Have you ever found yourself asking the questions “How did I end up with this stuff and what should I do with it?” or “How can I downsize or perhaps generate money from some of the things I don’t use?” These questions often arise out of this feeling that we have too much stuff, or clutter, in our lives we don’t want, cannot afford, or simply do not need.
Have you heard of the Sharing Economy? First of all, it is a rather new mentality of doing business with less, or perhaps only your current supply of goods. Second, and more importantly, it is an exchange of doing business with resources you have that are either extra, under used, or simply available for rent at a rate determined by the owner. People seeking to downsize and/or generate income from the stuff they often feel burdened with are doing so by using this new system. Other people explore the shared-economy too, not necessarily because they have too much stuff and want to rid themselves of some, but because they are in a position to capitalize on having extra “things” that sit idle… such as an automobile, a bicycle, perhaps a spare bedroom or even a few extra minutes of precious time.
This innovative way of conducting business and making use of resources is moving forward and people are jumping on board all over the world. One industry really stunned by the shared-economy is the hotel and accommodation industry. Homeowners, using a number of online platforms for a few years now, generate income by renting vacant or spare space in their homes to visitors for pre-determined rates that are often less than a hotel in the same vicinity. A 2013 Economist article demonstrates the significance of this growing movement. They reported, “LAST night 40,000 people rented accommodation from a service that offers 250,000 rooms in 30,000 cities in 192 countries.” The article continues to note a couple sentences later that these figures do not represent hotels, but individuals renting rooms to overnight guests in their private residences via the Web.
Shared-accommodation has grown significantly in recent years and also is causing controversy in locations previously unprepared. Michigan, for example, is just now beginning the conversation on how to address this massive “sharing” trend and establish tax collection systems for peer-to-peer venture-capitalists. Whereas cities like Portland and San Francisco have implemented measures to collect taxes from such homeowners who are willing to rent their rooms or in some cases entire homes out to strangers.
New industries and products have a way of making big impacts in subtle, gradual ways, and it seems to happen when least expected. While not all shared-economy housing options happened overnight, accommodation in private residence grew out of the housing crisis in 2007-2008 when homeowners were in need of financial support to retain their homes, and renting spare bedrooms to travelers generated income to sustain their homesteads.
This is just one example of the shared-economy and how societies, communities and individuals become innovative and entrepreneurial during times of uncertainty. The next part to this Michigan State University Extension series will focus on another industry being rattled by the shared-economy – transportation.
Other articles in this series: