The Sharing Economy and How it is Changing Industries

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The Sharing Economy and How it is Changing Industries
14 Jan 2022
6 min read

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Since 2010, investors have poured more than $23 billion into firms that operate on a share-based model, making the sharing economy one of the fastest-growing business trends in history. It's impossible to estimate the scale of the sharing economy because many of these enterprises are private. #ThinkWithNiche

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Attempting to describe the sharing economy in precise terms would be a disservice to the phrase. The sharing economy is an ever-evolving economic principle. It's the use of technology to ease the traded access of products or services between two or more parties in the most basic sense. It stems from the idea that mutual parties might benefit from a skill or asset that is underutilized. A shared marketplace, collaborative platform, or peer-to-peer program is used to facilitate this value exchange.

Many rural villages flourished on the same principle via bartering, so the sharing model isn't a novel concept. Managing share-based transactions, however, has never been easier because of the internet's accessibility and mobile technologies.

How Does the Sharing Economy Affect Us?

Traditional business sectors have been disrupted before by the sharing economy. Share-based enterprises can run lean due to the lack of expense and inventory. These brands may pass on savings to their customers and supply chain partners as a result of their increased efficiencies. The sharing economy is having an impact on conventional businesses, and many traditional brands may struggle if they do not adapt.

Transportation

Uber's rise in the transportation industry is one of the best examples of the sharing economy's impact on a traditional industry. Uber and other ride-sharing services provide a cost-effective, safe, and convenient alternative to traditional modes of transportation, including public transportation and taxi cabs. Uber serves consumers' transportation needs while providing an arguably better user experience than traditional modes of transportation by leveraging an efficient smartphone application and a network of vetted drivers.

Consumer Goods

According to Consumer Goods PWC research, 86 percent of Americans who are familiar with the sharing economy believe it makes life more affordable, and 83 percent believe it is more convenient and efficient than traditional methods. eBay is credited as one of the first peer-to-peer marketplaces. Their revolutionary technology lets customers buy and sell old and new items straight through their interface, with the goods being delivered to their doorstep. Consumers can choose from a wide range of products at various price points, in varied conditions, and with varying assurances. It gives consumers greater leverage and gives them a more economical, convenient, and efficient way to buy items.

Services for Professionals and Individuals

Professional and personal services are the best examples of the benefits of the sharing economy. Work requiring unique knowledge, skills, experience, certificates, or training, such as copywriting, accounting, or plumbing, is classified as professional or personal services. It is also known as freelancing, gigs, and other fashionable words that relate to short-term labor in the context of the sharing economy.

Healthcare

By 2020, the healthcare business is estimated to produce $8.7 trillion in yearly sales. That may explain why venture funding for digital health firms jumped 10.2 percent in the first quarter of 2018 compared to the same period last year. Even though the sharing economy has yet to truly take root in the healthcare business, many experts believe it will be the next frontier for collaborative consumption.

Traditional healthcare systems' constraints, such as costs and resources, have been reduced in other industries using share-based solutions. The sharing economy is set to transform the healthcare business, from telemedicine to group consultations.

Conclusion

As we grow more digitally connected, technology has aided the advancement of the sharing economy to where it is today. While we've seen how collaborative consumption can be dominant in businesses like transportation, consumer goods, and services, the sharing economy will eventually affect many more traditional industries.