The Sharing Economy

As much talk as there is about the sharing economy, and there certainly are major disruptors out there, some of it isn’t really all that new in concept. Sharing occurs if something is superfluous. Or, if there is a desire to share with someone something you have and they don’t.

 

Drill-Collaborative-ConsumptionThe sharing economy is really about renting, borrowing, and providing a service. An article from earlier this year in the Harvard Business Review calls it an access economy, as the real disruptor lies in the capability to handle the access to all the sharing via technology, an app and/or a website.

There are different sharing economy models. In some a company owns the assets and shares them across its members, see Zipcar. Other models, a company manages the platform and the rules of sharing, but the assets are owned by the individuals who are members, see Airbnb, Closet Collective and Uber.

Then there are services and skills shared. They go through a sharing or offering platform, such as Task Rabbit or The Creative Group. Here the disruption is the access via technology from a person in need of a service to a service provider.

Although offered as a sharing community on most platforms, a sharing economy is not based on ‘community’ as much as it’s based on benefits, such as cost-effective access to desired assets, flexibility, and the convenience of not having to deal with the obligations that come with ownership. In a peer-to-peer model, the owner or service provider will most likely be engaged due to financial need, and not for an altruistic, ‘sharing the leftovers with the community’, motivation.

The biggest change in my opinion is, other than access via technology, the reciprocal feedback process that is based on TRUST, especially in the peer-to-peer sharing economy models. I’m not sure it always works as intended.

Take Airbnb; the challenge as I see it is, that once you’ve had a personal interaction with your host and you know they get to review you as well, the reviews stop being authentic. On a recent rental, I felt strongly that I wanted to leave negative feedback, but I held back. Why? I didn’t want to be the first person to leave a negative review for a so-called super host. The host was lovely and went out of his way to show us the ins and outs of his home and the town. However, the home was not in the neighborhood advertised and our room was filthy. I would never use Airbnb again, unless a person, who knows how particular I am with cleanliness, would recommend a place.

That brings up the question, on how brand trust is built on-line. If I go to a brick and mortar McDonalds or to Morton’s Steakhouse, I know what I’m getting, years of advertising and marketing positioning tell me what to expect. Both have a very specific customer profile. With a peer-to-peer on-line platform service I don’t know what I’m getting, beyond customer ratings, and I don’t know what those customer’s preferences are, either. Do they normally eat at McDonalds and would be wow-ed, no matter what, by a Morton’s, or are they discerning foodies and wouldn’t give Morton’s the time of day? It will be up to the companies that run peer-to-peer services to do quality control, careful service provider screening and to nurture trust. How will they do it when they interact with their providers AND customers virtually only? We will see.

Addendum:  Time Magazine of week of October 12 has an article on the Sharing Economy.

sharing-cover-final1