The ‘sharing economy’ has taken peer-to-peer marketplaces such as eBay and transformed them into an entirely new, collaborative world. And while there are many different business models that exist under the sharing economy umbrella — ride sharing, accommodation sharing, food sharing, equipment sharing, money sharing, and even WiFi sharing — they do all have one thing in common: capitalism.
But before we get to that, it’s important to look at how shared traits in this growing sector have helped startups like Uber to succeed, solidifying sharing as an essential aspect of enhancing the future economy.
When broken down to the core, all sharing economy startups — everything from Airbnb and Lyft to Fon and Poshmark — share three very clear and obvious characteristics: scale, accessibility, and trust.
Connecting customers with providers — or problem havers with problem solvers — is the backbone of any business, but never before has it needed to take place on such a large scale. In fact, the scale of the connections that the sharing economy is capable of can be difficult to get to grips with. Airbnb now connects users with more than 4 million unique properties across nearly 200 different countries.
With typically smaller budgets than their larger counterparts, smaller businesses and service-offering individuals often fail to make themselves visible and accessible to those seeking solutions. Therefore, a common trait found amongst sharing economy startups is simply accessibility; getting the right providers in front of the right eyes. In doing so they’re boosting transparency while simultaneously minimising risk.
The sharing economy goes hand in hand with social media; another concept based upon the idea of sharing, and one which is enabling the new wave of sharing to thrive. Sharing startups remove the need for customers to place their trust completely in the hands of a young business, highlighting the importance of peer reviews. 84% now trust an online review as much as a personal recommendation.
When the sharing economy is viewed as a sector based upon these three factors, it’s easy to see where the idea of capitalism comes into play. In fact, as well as these three clear traits, many sharing economy startups also incorporate some of the classic characteristics of capitalism, including traits such as:The ‘Two Class’ System:
The sharing economy demonstrates the importance of the ‘two class’ system, with the ‘working classes’ providing services in exchange for money that is paid to them by their ‘capitalist class’ counterparts.Profit Motive:
Profits are arguably the most important and, in some cases, the sole motivator for the growth of the sharing economy. In terms of driveway sharing, for example, there is no clear alternative motivator.Lack of Government Intervention:
The sharing economy enables those with desirable resources or skills to share these without the need to use official channels, although bypassing regulation is currently a rather controversial topic of discussion.Competition:
As the sharing economy continues to grow, competition is becoming increasingly fierce, resulting in a need to offer better services for a lower cost, and therefore driving competition even further.Ability to Adapt:
The sharing economy is successful because it directly addresses the supply/demand needs of the moment. Therefore, it is essential that it’s in a position to be able to adapt, to continue meeting needs.
Regardless of whether we deem capitalism to be good or bad, it seems clear that the concept is one that is accelerating, and acting as a driving force behind the sharing economy. Most successful examples of sharing economy startups that can be seen today embody traits and characteristics of capitalism.