The formation of sharing economy

by Valeria Arzangulyan 

Recent unicorn valuations of Uber and Airbnb have raised new wave of interest towards sharing economy phenomenon. The swift growth of services based on shared economy principles yet needs thorough understanding.

This disruptive model includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations. A person becomes a part of sharing economy the moment he announces the intention to grant access to his property to others under certain principles and rules.

Significant social component of this model shapes its perception. The concept promotes the idea of efficient use of available resources under slogan “Sharing is caring”. In practice it operates as a business model of intermediation. This business typically meets a range of primary needs of its participants using digitalized supply channels. For instance, Airbnb solves the problem of accommodation for travelers, Uber facilitates the taxi search, Task Rabbit allows finding help in house cleaning etc.

This model owes its inception to the revolutionary change in attitude to personal property and its management. The category of access starts to replace the ownership mentality. Many researchers believe that continuous technological breakthrough was the key driver to boost the establishment of numerous online marketplaces and other platforms. However, the technology would remain unclaimed unless the presence of willing community. It was formed based on another backbone of sharing economy, the trust-building. A trusted, reliable platform is usually identified by the constant customers’ pool and high ratings. The digitalized interaction channels supported the next steep turn of the model's promotion. Finally, year-on-year increasing popularity and fast spread of mobile devices and online payment services have contributed to the acceleration of the sharing economy development.

Sharing economy start-ups are crowd-sourcing platforms in various areas: travel (TripAdvisor, EatWith), funding (Kickstarter, Indiegogo), recruitment (Careerify), content marketing (Pinterest), social issues (Change.org, Quora), freelance (MosaicHub, Maven, Expert360), databases (AngelList, DealRoom), etc.