There’s a brand new world of transactions forming and it’s named the sharing or collaborative economy. The standard definition of this new trend is an economic model for individuals to borrow or rent assets owned by someone else. This peer-to-peer (P2P) interaction is catching on and it could mean good things for your business.
This new trend is mainly fuelled by the Internet, which about 30 million Canadians use. The average Canadian spends around 45.6 hours online per month, compared to 40.3 hours in the US and a world average of 24.4 hours. With the collaborative economy, small business owners and entrepreneurs are tapping into a pool of over 13.5 million people. They do this by renting out unused assets to consumers or other merchants and generating extra revenue.
This “what’s mine if yours, for a fee” philosophy is spreading due to the overwhelming convenience it offers. The system uses items/services that are expensive, widely owned or commonly sought after. Take a car for an example. This expensive, widely owned commodity is being transformed by businesses like Uber. This service connects riders with drivers who are using their own cars, creating an alternative to taxis and public transportation.
Crowdfunding is another sector of this trend that provides an outlet for anyone to make extra cash. Websites like GoFundMe and Kickstarter are raising money for entrepreneurs and small business everyday. Meanwhile, more business-focused crowdfunding platforms exist that offer business loans of up to $100,000. Suddenly, starting your own business is as easy as creating a profile and writing a compelling enough bio.
Errand services like Ask For Task give people the ability to outsource commonplace tasks, like picking up dry cleaning or running errands. Even your empty parking lot or unused conference rooms can be rented thanks to emerging businesses in a sharing economy. The move toward using second hand items is rising in popularity as people look for ways to save on time and money.
Several businesses are concerned about regulatory uncertainty. Will room-renters have to adhere to hotel taxes, for example? The rules need to be updated to protect consumers and other businesses from harm, but for entrepreneurs and small business owners, it looks like its time to start caring about sharing.