Our society is undergoing exciting social and economic changes as we enter the New Year. Increasingly, consumers have access to advanced technology, communication, and resources. A new trend dubbed the “shared economy” changes the way we traditionally think about purchasing goods and services.
The shared economy empowers complete strangers to have access to more resources by leveraging technology and connecting people with things they need. Need a place to stay or a way to get around town? Just get on your mobile device and get connected to someone who can help.
Zipcar and Sharing Economy
The recent acquisition of Zipcar by Avis Budget Group for 500 Million is an excellent example of how the sharing economy is gaining traction. Zipcar gives geographically distributed people access to conveniently located vehicles around the clock. The trend is popular among members of the new generation, as the focus is shifting from “me” to community-based sharing.
Sharing Economy is Greening Society
The Sharing Economy or Collaborative Consumption is allowing people to get back to the basics and live environmentally friendly. Sharing, bartering and loaning the use of goods and services rather than purchasing uses less natural resources and wastes less. Social networking has played a large role in making the connections between like-minded, environmentally conscious people.
Sharing Economy is Socially Responsible
The new generation believes in social equity just as much as reducing environmental impact. Foregoing individual ownership of something in favor of benefiting the greater good resonates with these young people, and it is what will make the sharing economy concept work. Not just as a whimsical notion, but as a long-term strategy. This is the trend investors should be tuning into because it's what turns a start-up concept into a mainstream reality.
Sharing Economy is Cost-Effective
Collaboration has economic benefits too. Sharing economy takes advantage of economies of scale, so businesses that offer shared services tend to grow more organically and their operations cost is more sustainable. And sharing economy is cost-effective for those who use the services. The cost of ownership can be very high for items like cars and homes, because of insurance, fees, and maintenance.
The Future of Sharing Economy
Some private investors aren’t convinced about the viability of a shared economy quite yet. They are keeping a close eye on acquisitions like Zipcar and other service-sharing businesses that are just starting up to see if the concept sticks.