The sharing economy is a comprehensive term for activities that aim to reduce resource consumption through more effective use of capacity, such as sharing access to goods and services. The term sharing economy alludes to the fact that instead of individually owning physical items we can, in an intelligent way, gain access to them when we need them. Things that are not used so much – resting resources – can instead be borrowed, traded, shared or rented out. For example, for everyone in a neighborhood to own their own motor saw is pretty meaningless if it is used on average once a year.
In Sweden, 15 percent of the population has used some form of sharing platform, while other countries are significantly ahead, such as France with 36 percent.1 Sometimes initiatives are local, sometimes global. Sometimes they are not-for-profit, sometimes commercial. In addition to well known examples such as the housing-rental service Airbnb and the taxi service Uber, there are initiatives and services for sharing parking places, luxury cars, vacation homes, office space, bicycles, storage space, or why not art or space for growing things in gardens.
Are there any equivalents for B2B companies? The fact is that owning is becoming less important for companies as well: it is access to functionality that is the determining factor. To own all manner of assets can become an encumbrance in a time when it is important to be able to quickly adapt in the light of abrupt changes in one’s surrounding environment. Under-utilized resources can even be an opportunity to generate new revenues. The service Workaround sources offices, meeting rooms and space that is temporarily not in use. Warpit re-distributes office furnishings, furniture and inventories that are gathering dust, and Storefront offers shop areas that is temporarily not being used to people who want to open a pop-up store.
Cargomatic sees to it that you can ship a package in trucks that have unused space. Yard Club helps construction companies to let out their equipment when they are not using it themselves, and Floow2 takes it one step further by helping companies to share just about anything. Why not rent equipment for cleaning wine bottles, a tank for liquid nitrogen, a lab for measuring performance capacity? This exemplifies that the sharing economy can provide companies with access to unique products and services that weren’t previously available to them. It is about finding already-owned assets and utilizing those remaining percentages of capacity.
Why is the sharing economy emerging now? From a historical perspective, the phenomenon isn’t new. When agriculture was the dominant sector it went without saying to share material assets. In the many small towns and villages in the countryside people knew who they could rely on, and mutual sharing of equipment was rational. A farmer’s mark on his equipment ensured that sooner or later it would be returned to its owner.
But along with the growth of cities, trust between people declined. It became less natural to share things with whomever. Individual ownership became not only more common but also connected to status. In addition to material value, owning things signaled that the owner was well off. What we are now seeing is a return to the original model of shared ownership.
This renaissance for shared ownership has been made possible by technical platforms that reduce the barriers to finding what one is looking for, while at the same time via point systems can create trust. Where long-standing relationships were once required to build trust, we can now evaluate people far outside of our social circles via previous ratings. Trust is becoming a new form of currency.
The development of the sharing economy also coincides with a shift in perceptions about status. When everyone who wants to can have a flat-screen TV, cell phone and Levi’s jeans, things like this convey less status. The fact is that today’s consumption is less and less about physical objects and more about things like visits to restaurants, vacation travel, personal trainers, mobile apps, miscellaneous experiences, etc. The modern person wants to be lightweight and mobile and not burdened with a large collection of household goods, where personal effects take up an exaggerated amount of mental energy. It is not only people that consume things, but things also consume people. Physical ownership of things involves a commitment to storing, maintaining and insuring them.
The things you own end up owning you. | Rachel Botsman, lecturer and author of "What's mine is yours"
Another central driver is awareness that the Earth’s resources are limited, something that has become increasingly tangible alongside the increasing global population and continued climate crisis. Initiatives promoting more effective use of man’s resources have become both necessary and more attractive. At the same time, the actual environmental consequences of a sharing economy are being debated, since for example renting each other’s homes has led to increased tourism and air travel.2
Some cities, such as Amsterdam, have implemented systematic efforts to promote a sharing economy.3 The city has established a network of collaborating actors in industry, the public sector and research to drive the development of Amsterdam Sharing City. In practice this involves encouraging those activities and promoting that type of innovation. At the same time the city was quick to regulate the market.
It is also important to be cognizant of eventual negative effects. The sharing economy normally brings with it a larger selection in an existing market, which can lead to lower prices, or even the failure of existing actors. The concept Hoffice, where private individuals meet and work at each other’s homes during the day, can be perceived as a curiosity. But the 2 New business models – business in digitalization’s footsteps 49 phenomenon is growing and now exists in 17 cities in Sweden, of which a group in Stockholm has 2,000 active members. For businesses that rent office space, Hoffice can with time become a threat.
Håkan Samuelsson, CEO of Volvo Cars, claims for example that today’s perception of mobility and automobile ownership is in the process of changing.4 Mobility as a service rather than ownership if a car is the way forward. Volvo’s spinoff Lynk & Co. has already made this a reality, and claims that car owners could make money by sharing their car with others. Perhaps we are moving toward a future where no one owns their own car, but instead people utilize different vehicles in a constantly rolling automobile fleet.
We have only seen the beginning of the possibilities – and potential threats – that a sharing economy can offer. The sharing economy can by extension have far-reaching consequences for labor markets, salary development, and taxation.5
1 SOU 2017:26. Delningsekonomi – På användarnas villkor. Stockholm: Fritzes Offentliga Publikationer.
2 Schor, J. (2014, October). The Great Transition Initiative, “Debating the sharing economy”. [blog post] Downloaded 2018-10-22 from: http://greattransition.org/publication/debating-the-sharing-economy
4 Volvo Cars. (2017). Volvo Cars to establish new shared mobility business unit. Downloaded 2018-10-22 from: https://www.media.volvocars.com/global/en-gb/media/pressreleases/202338/volvo-cars-to-establish-new-shared-mobility-business-unit
5 SOU 2017:26. Delningsekonomi – På användarnas villkor. Stockholm: Fritzes Offentliga Publikationer.