The Sharing Economy: Taking Cashless Commerce to a New Level


Barter, trade, crowd funding, collaborative consumption – whatever terminology you choose – is not a new concept in doing business. Trade has been a staple of community economic life for eons and is finding a renewal today, becoming a major option to cash in furnishing homes, supplying services, providing vacation options and feeding people.

The impetus toward access versus ownership can be attributed to many factors, of course, but in today’s world it relies on shared mobility. This can be defined literally by bikes and cars, or in the broader sense of technology. Electronic and social media devices – smartphones, laptops, iPods – offer businesses a new alternative to cash for consumables.

This trend is growing world-wide. An April 2011 article in Fast Company stated that more than 3 million people surfed the web for barter opportunities. That figure is undoubtedly greater today. The concept has grown from the Linux model of programmers sharing code; to people sharing lives on Facebook and Twitter, to content on YouTube; and mainstream media on blogs. Consumers are trending toward access to goods and skills more than ownership, whether it’s cars (Lyft), vacation homes (, goods or services (, even borrowing or lending of money (Lending Club).

People who own assets are using digital clearinghouses to essentially capitalize on the value of things they already have, and consumers are sharing this “wealth” rather than buying from a company. Proponents are touting this trend as having economic, environmental and lifestyle impact.

An article in the February 11, 2013 issue of FORBES noted that while Avis Budget Group spent a sizeable amount to purchase Zipcar, a more profitable model may lie in peer-to-peer car-sharing services such as RelayRides and Getaround that tap into the tens of millions of autos sitting idle in American driveways.

The article quotes Shervin Pishevar, a venture capitalist and investor, as stating that the services will have a major impact. “This is much bigger than any specific app,” he says. “This is a movement as important as when the web browser came out.”

FORBES estimates the revenue flowing through the share economy directly into people’s wallets as more than $3.5 billion this year, with growth exceeding 25%, and refers to this trend as a “disruptive economic force.”

It’s no wonder, then, that the government would step in with new and proposed regulations. This seems like an oxymoron, as the concept of the share economy is based on mobile and virtual trust and accountability; self-regulation, if you will.

And here’s the reason why. The start-ups behind the share economy are businesses. They must assure that customers are satisfied or, like any other business that doesn’t, will fail. Offering insurance to users, such as AirBnB does, is a way to assure customers that they are credible and self-regulating. Car-sharing businesses perform background checks on drivers to protect auto-sharers and riders. Look no further than TripAdvisor or Yelp as examples of how consumer reviews can outweigh regulations.

For business owners, consumers and investors considering a share economy experience, the cost versus benefit is primarily based on virtual accountability. In an environment where there may not be a face to face meeting or a handshake to seal a deal, viral marketing is a primary regulator. Good behavior results in positive reviews, bad can get you shunned from the virtual commerce community. The investments these new businesses make in protecting the consumer should easily reap multiple benefits in the companies’ continued growth.

The articles and companies cited in this report can be found at FORBES, Lyft, Lending Club, AirBnB, Zipcar, RelayRides, and Getaround.


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