The Sharing Economy
For new businesses, capital investment can be hard to find and the demands placed upon it are huge. Anything, therefore, that reduces start-up costs is to be welcomed. The sharing economy slashes costs, ensuring that you only pay for goods and services when you need to. The idea may be as old as the hills, but it has taken the dawn of the digital age for it to be revived and professionalised.
It’s now possible to share transport, accommodation, services, education, even access to money. Whether you call it the sharing or the ‘mesh’ economy, the upshot is that goods, talents and services can be acquired in ways that make a huge difference to entrepreneurs looking to keep their costs to a minimum.
Insurance, vehicle duty, parking permits, MOT… a car can cost you four figures a year before you’ve travelled so much as a mile, let alone bought the car itself. EasyCar Club takes all those fixed costs out of the equation by uniting people who only need a car occasionally with owners who are happy to lend theirs for a fixed period. Zipcar, meanwhile, is a service with cars located across London and elsewhere. Both companies offer vehicles that are there when you need them but not when you don’t.
Airbnb is the giant of this new market, letting travellers bypass expensive hotels and B&Bs and go directly to residents with a spare room to rent. It can be particularly useful during short bursts of high demand (Edinburgh in Fringe season, for instance), but also comes into its own as a way to add capacity to the market if, say, there’s a popular conference or business exhibition in town. Owners can set their own prices, which tend to be more flexible than the rigid per-night pricing of the hotel sector. The system, like many aspects of the sharing economy, thrives on informality – accommodation could be anything from a self-catering flat to a room that’s being let out while offspring are away at university – and relies to a large extent on customer feedback.
We all have jobs we don’t want to do, whether that’s down to a lack of expertise, time or just the feeling our time could be better spent on something else. Whether the task is mundane or specialist, the internet has answers to suit: Task Rabbit specialises in finding people to do errands, such as cleaning or handiwork, while Elance connects businesses with writers, designers, programmers and developers. Workers are employed by the job as needed, with no need to worry about finding regular work or paying regular salaries.
Of all the different aspects of the sharing economy, perhaps the most surprising is peer-to-peer money. But the post-crash economy has created a perfect storm: traditional lenders currently offer paltry interest rates at one end and a lending freeze at the other, driving both investors and borrowers out of the market and towards P2P lending. Sites such as Zopa and Funding Circle connect lenders with borrowers without the need to go through a bank or building society. They typically pay much higher rates to lenders and offer competitive deals to borrowers. There are downsides for savers, as they’re not covered by the same regulatory protection, but the sector doubled in size during 2013 and is expected to expand further as awareness grows.
As tuition fees mushroom, people seeking value for money are increasingly heading online. Skillshare is a ‘learning community’, which charges small fees for participation in unaccredited courses. Anyone can become a student or teacher, but classes are typically taught by specialists from the world of business, fashion, tech and entertainment (Hollywood star James Franco took one). It encourages a collaborative approach among students and styles itself as offering ‘real world’ skills above academic qualification.
Articles are written by independent journalists and do not necessarily reflect the opinion of O2