The Sharing Economy and What It Means for You
The last decade has seen a major shift in the mindsets of consumers as we move from a predominantly ownership society to a sharing society. With the improvements in technology and last mile logistics, sharing has become an increasingly popular mode of maximising our assets.
Most notably, this can be seen in the likes of cars with companies like Uber and Grab. These two companies have enabled car owners to maximise the utility of their cars by using them to monetize their rides and connecting them to potential commuters.
Most people in Singapore would also have noticed the sudden influx of bicycles around the island as three new bicycle sharing companies have suddenly descended upon Singapore. They allow bicycle riders to easily borrow one of their bicycles and park it anywhere around the island.
These are in fact just two of the noticeable sharing systems in place. Many companies have been utilising the enhanced logistical efficiency to maximise other assets by allowing people to share them when not in use. Here are two more examples.
Ever wished you could rent out your unused room in the house on a short-term basis? Well, companies like Airbnb and HomeAway have made this possible by connecting homeowners to short-term renters.
Airbnb, which has been around for almost nine years, was one of the first movers in this market. They offer competitive pricing and a chance to stay at accommodations unlike any you can find in the hotel industry. Airbnb does not own any of the properties listed but is simply a middleman facilitating the transactions.
Other competitors have decided to try to muscle their way into this market such as FlipKey and Vacahero. They also allow property owners to list their accommodation on the site and connect them with potential renters. With the availability of these properties to holiday makers, hotels will need to ensure they are able to stay competitive in an industry that has slowly been revolutionised.
The Singapore smart phone market is booming and most people subscribe to a mobile plan for Internet connection. However, as a phone user, I can attest that I do not always maximise the data usage that I am allowed. On other occasions though, I overuse my monthly allowance on data.
A company in China has now enabled people to share their unused data online, potentially solving this issue. According to the South China Morning Post, this new app allows people to sell their unused data in lots of 1GB (gigabyte) to people who need it that month.
The Foolish bottom line
As we move from an ownership society to a sharing society, many of the problems of the inefficient use of our assets are slowly being resolved. We can potentially decrease the number of unused accommodation around the world, and maximise the utility of cars and bicycles. As investors, we should look out for companies that can impact the way we live such as how the sharing industry has done in recent years.