Sharing economy models are using under-utilized consumer assets more intensively through lending or pooling. Usually, products are either co-owned (e.g., tools) or co-accessed (e.g., carpooling) by several people. Sufficiency, product lifespan extension and collaborative consumption are the basic concepts of the sharing economy.
What is the sharing economy?
Sharing models, sharing economy or sharing platform models involve using under-utilised consumer assets more intensively (Lacy & Rutqvist, 2015). This “collaborative consumption” (Rizos et al., 2017) can be done via lending or pooling and can be categorized into two sub-types: co-ownership and co-access. Accommodations, vehicles, clothing, and tools are some examples of products that are unused for much of their lifespan. Nowadays, these sharing models are facilitated through digital technology and platforms (for example Airbnb in the housing market) (OECD, 2019).
In which context are sharing platforms useful?
The co-ownership variant of sharing models involves the lending of physical goods, because they are capital intensive, infrequently used, or have a low ownership rate. They should also be easy to transport and be durable. The co-ownership models are especially useful in urban areas, which are characterized by a high population density. The co-access variant of sharing models involves allowing others to take part in an activity that would have taken place anyway (e.g., sharing vacant seats as part of carpooling, such as Blablacar) (OECD, 2019).
What is important to keep in mind when building up a sharing platform for your business? Platform owners can usually generate a small margin on each related transaction and the initial investment cost required to launch an online platform is a lot smaller than that of a traditional provider. Another advantage is small operational costs and significant potential for scale-up (OECD, 2019). However, different generational needs and preferences need to be considered when setting up these sharing platforms (Kumar et al., 2018). Further differentiate different sharing platform models: singular transaction models (e.g., second-hand), subscription-based models (e.g., vegetable boxes), unlimited platforms (e.g., Wikipedia), commission-based platforms (e.g., Ebay) (Ritter and Schanz, 2019).