5 ways the collaborative economy is evolving

Over the last couple of years, the collaborative economy has seen a meteoric rise in popularity, as mentioned by Jeremiah Owyang. At first, most people approached it with skepticism similar to initial sentiments toward online shopping 15 years ago. People were worried about security and whether they can trust a perfect stranger with their item or personal safety. However, startups – including Airbnb and Zipcar – are providing a customer experience that fosters trust and comfort and makes people wonder what else they can share.

Are we interested in this emerging trend because we’ve evolved into a more altruistic society? Are we more aware of the value of “stuff” and only willing to rent, borrow, or share the items we don’t need every day? Or is it an aftershock of an economy that forced us to reassess our values, the way we interact with one another, and the difference between “wants” and “needs”?

While no one knows the answers to these questions, one thing is clear: The “collaborative economy” is a good thing. Owners are able to make extra money from underused assets. Renters pay less than if they had bought the item themselves or turned to a traditional hotel or car-service provider. And the environment benefits from more responsible use of resources that are already scarce and dwindling at a rapid pace.

Startups and investors take notice: Seizing opportunity in the collaborative economy

In the first half of 2014, nearly $670 million was invested in this space. It’s not just small-time investors that are placing their bets on the collaborative economy. Even tech giants, such as Google, are jumping in.  At that time, most startups and larger players targeted industries related to goods, food, service, transportation, living/working spaces, and money.

However, it appears that the landscape of this new, revolutionary economy has significantly grown – only six months later. When I came across the second version of the Collaborative Economy Honeycomb released earlier this month, I was struck by how quickly additional industries and verticals were now being affected. More surprising is the fact that some of the original six industries are now reaching market saturation in terms of competitors.

But if you take a closer look at this graphic, you’ll see that the collaborative economy is changing our world in five significant ways.

5 ways the collaborative economy is evolving into a “trend” that’s here to stay

1. It’s helping us afford the healthcare we need and deserve. In a world of rising healthcare costs, stagnating pay, and a growing population reliant on fixed incomes, sharing is enabling patients to afford medical equipment that can help ensure they stay healthy. For example, Helparound.co provides peer-to-peer diabetes care as well as sharing of insulin and pumps.
2. Sending packages is becoming more affordable and secure. No one wants to send a package at a rate that costs as much – if not more – than the item being shipped. Worse yet, no one likes a delivery to arrive and go missing because you didn’t get home in time. Enter the world of logistics sharing. Thanks to startups such as Postmates and Roost, the cost of the final mile of delivery is getting less expensive and delivered packages are safer with peer-to-peer home storage.
3. The business world is realizing the value of sharing. Corporations can experience their own Uber-like experience with LocalMotion or build their own version of Airbnb with Near-me. Could this be the end of corporate cars and hotel suites? Only time will tell.
4. Public services are taking advantage of it, too. Faced with increasing pressure from tight budgets and the demand for more responsible spending, cities are saving money by sharing street cleaning vehicles on Munirent. In addition, to encourage a better lifestyle for constituents, they’re investing in public bike systems with Velib.
5. The collaborative economy is coming to a classroom near you. You can never invest too much in education. Unfortunately, there never seems to be enough money available. Numerous startups are filling this gap by allowing students to share books on Chegg, attend accredited courses on Khan Academy, and participate in online training led by instructors and peers through a host of startups.

With nearly $2.5 billion invested in startups and sharing services over the last six months of this year, there’s no telling how much further the collaborative economy will extend its reach. But I think we can all agree that the collaborative economy is quickly shifting us away from a “throw-away society” towards a community that only obtains and maintains the services and goods we need, when we need them.

This article is published in collaboration with SAP Community Network. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Dinesh Sharma is the Vice President of SAP global marketing.  

Image: REUTERS