Disruptions in the Sharing Economy by Chiqui Escareal-Go
 
Think of the time when we felt it was not safe to use credit cards online despite the convenience.  Or that time when traveling abroad couldn't be done without a travel agent.  Then again there was a time when we wouldn't ride in a car with a stranger, much less that stranger being someone you just “met” online.  The Internet has changed us all, and with it, a more collaborative way of consumption, also called the “sharing economy”, inspired by the successes of Uber and AirBnB.
 
 AirBnB came to be when its founders Joe Gebbia and Brian Chesky realized that during important conferences and events,  rooms were scarce if not expensive especially in San Francisco.  To be able to afford their own expensive rent, they offered their own unit using airbeds and homemade breakfast (AirBnB is airbed and breakfast) and thus was born a new industry that has disrupted the hotel and  tourism business.
 
Uber founders Camp and Kalanick came up with the idea of UberCab when they couldn’t find a taxi back to their hotel while in a conference in Paris in 2008.  They also knew about the taxi problem in San Francisco.  Since they rolled out the app in 2010, Uber has redefined the purpose of the automotive and transport industries by addressing unmet needs of safety and convenience for many people.
 
One CEO I spoke with shared how her company has removed company cars and have now required their managers to just charge their transport fees as company expense when taking Uber.  On the other hand, I also found that many Uber taxi drivers have actually given up their office jobs (one was in the government, another was a high school teacher) to earn more from the Uber business.  This win-win situation for both passenger and driver enabled the industry to grow worldwide.
 
In this regard, research (bbvaresearch.com) on the auto dealership industry has found two interesting points about millennials:  1)  they are not as interested to own cars if they can be mobile in other ways and 2)  they are willing to share their property if they can earn extra income (for them, cars are the second most popular item to share after books).  This has brought about the rise of uberPOOL where riders going to the same direction can share a ride and split cost.  According to the same research, this service now makes up half of all Uber rides in San Francisco and a third of all Uber rides in Los Angeles.  This will impact car sales and could disrupt car dealerships.
 
Augustine and Nava noted:  “Although dealerships have not yet responded to this trend, more automakers are beginning to understand and adapt to this changing dynamic of car ownership. For example, Ford implemented its Smart Mobility Plan last year in which customers can sign up to rent their Ford Credit-financed vehicles to pre-screened drivers for short-term use.  In addition, ride-sharing services could also effectively serve as a group-purchasing mechanism if drivers come together to purchase cars from specific brands. GM and ride-sharing company Lyft just entered into a strategic partnership this year, through which GM agreed to invest $500 million in Lyft and become a preferred provider of rental vehicles for Lyft drivers, with both parties collaborating on the development of a network of on-demand autonomous vehicles in the long-run.”
 
The emergence of the sharing economy has been propelled by the ease of access via the internet. In this economy, the internet enables people to earn from underutilized assets, coupled with the convenience of connecting or matching peers to transact business. With more people feeling more secure with online credit card transactions, this sharing of resources has now become an attractive business model.
 
Other companies using the share economy model include Lyft (the US-based version of Uber), TaskRabbit (freelance labor to handle cleaning, delivery, handy work, etc.), Zaarly (a home service provider), DogVacay (hire dog sitters while you’re on vacation), and Neighborgoods (borrow and lend items among people in your area),  among others. In Indonesia, there is Go-Jek which is a platform for motorbike-sharing and Ojek Syar’i which is for Muslim female motorbike drivers.
 
More companies are joining the share economy bandwagon as there are more internet platforms being developed and more people being open to the idea of sharing and earning from others, not to mention the positive effects on the environment (less cars, less pollution, less wastage, etc.)
 
With the way things are changing, it may be imperative for the movers of the sharing economy to continue evolving, especially as new laws are being put in place to regulate the industry. 
 
Chiqui Escareal-Go is the President of Mansmith and Fielders, Inc. (www.mansmith.net).  For inquiries, questions and feedback, please email mentors@mansmith.netor info@mansmith.net.