The Sharing Economy and Social Impact
The news today is filled with stories about the “sharing economy”; considerations on how it is transforming our approach to life, legalities, and both the positive and negative implications it has for employment sectors in the United States.
Put simply, the sharing economy is one in which both material and non-material resources are shared for the benefit of multiple individuals. With the use of modern technology, the sharing economy opens up the VentureBeatpossibility for informational, financial, natural, technological and many other forms of resources to be shared for the common good of all people. Famous examples of companies in the sharing economy are Uber, ClassPass and Airbnb.
According to a 2015 article, there are now 17 billion-dollar companies that are part of the sharing economy that provide jobs to 60,000 employees and have received over $15 billion in funding.
In a time with falling trust in the institutions of government and business, people are craving transparent human level interactions. In this environment, the sharing economy is allowing for new notions of trust to evolve.
The World Economic Forum sees the sharing economy as an opportunity to harness local and citizen-led innovations to create solutions like peer-to-peer networks that help meet the Sustainable Development Goals and allow for a significant role for impact investors.
Examples of these opportunities are many. One recent MIT study found that 95% of taxi rides within New York City that aren’t currently being shared—could be. The study also found that UberPool has the potential to reduce journey times by 30% as well as reduce congestion and traffic pollution.
Because of this opportunity, car sharing companies like Uber and Lyft have enormous potential for sustainability impact and would fit into the Circular Economy we discussed previously. In fact, Lyft was a finalist for the 2015 Circular Economy Digital Disruptor and the winner of this award was TradeShift, an open-source cloud platform that enables businesses to transform their supply chains from a cost-based to a value-based focus.
While the sharing economy does provide infinite possibilities for the betterment of humanity, it also presents almost as many challenges. Sharing economy companies are solving many environmental and societal problems that governments also hope to solve, yet the companies usually do not have traditional employees and are therefore much more difficult to regulate. As such, chances for exploitation and marginalization become higher. The future may be one in which governments begin to act more like these companies and find collaborative solutions.
Sharing is based in empathy, equality, honesty, and trust. As mentioned in our “aspirationals” article about the new largest customer segment—transparency, humanity, abundance without waste, and contributing to the greater good are what are becoming most valued in the global marketplace. If a company can find a way to incorporate some form of sharing into their business, they can be well on their way to creating impact and reaping well-earned rewards.
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Maggie & Hector