Are You Engaged in the Sharing Economy?

There has been a tremendous amount of chatter and no doubt you are at least somewhat familiar with the term, and the practice of the sharing, or peer-to-peer, economy. For those that are not or just to verify what we are talking about, The People Who Share website has a pretty good description:

The Sharing Economy is a socio-economic ecosystem built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations.

To that I would add this sharing is facilitated and made possible by the Internet and various applications. Increasingly, individuals are reaching out to each other through the Internet where sites and apps connect people seeking services with sellers of those services.

There are task brokers such as TaskRabbit and Fiverr; on-demand delivery services like Postmates and Favor; and grocery-shopping services like Instacart. Among the most well-known services are Airbnb, the short-term-stay broker and of course, the ride-sharing services, Lyft and Uber.

The Sharing Economy: A Shift Away From Ownership is an NPR series – multiple podcasts – that is worth a listen. How the Sharing Economy is Changing the Places We Work is one of the podcasts in the series.

The idea behind these peer-to-peer services is pretty straight forward. Eliminate, or reduce, the middle man by using technology to rent out or share underused personal assets. What could be better than easily connecting people who have an “extra” resource, whether it be a car, an apartment, a car, time or whatever with people who might be lacking those things?

Those that participate as providers are often drawn in by the idea of self-management and stepping outside of the typical hustle and bustle; and the ability to diversify their work life on schedule that works best for them. On the other side of the transaction are those looking to use a resource they do not possess at a reduced cost or because of the convenience.

Uber LogoI don’t have strong feelings for or against these services and I have yet to form a firm opinion about how much they will transform the economy. Some celebrate the idea that this “new economy” will significantly impact the ownership model that has existed since the beginning of time. Well maybe not since the very beginning, but a long, long time. I’m somewhat skeptical, because of course, someone has to own the resource that is being shared. At some point in time someone had to utilize capital to come into possession of the resource. Additionally, someone will have to utilize capital to maintain the resource. A common criticism of these services, particularly Uber, is that they do nothing more than drive down wages and are not all that helpful – financially – to the people they purport to provide greater opportunity.

My general feeling at this point is that these types of services do offer conveniences for the recipients and they can provide a little extra money for someone looking for a side hustle as another stream of income – either for someone already in retirement or to supplement a primary income – or for a spouse to help add a little to the household income. However, I have my doubts as to their ability to provide an income that would lift someone to the middle class and beyond; and serve as a replacement for more traditional (boring?) 9-to-5 jobs and the benefits that might come with them.

I would love to get some feedback from readers who have been on either side of a peer-to-peer transaction, those that have anecdotal story involving a family member or friend that was involved in a transaction or those, that like me, have followed some of the news stories about Lyft, Airbnb or Uber, etc. and have formed an opinion.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

8 Comments

  1. It will be interesting to see the impact on the traditional ownership model in the United states. Its a whole new mindset. Interesting post James.

    • Indeed. No doubt that peer-to-peer sharing will have some effect on the economy. It will be interesting to observe the depth and width of the change.

  2. I’ve used Fiverr and Uber and have been happy with the results. I find these type of companies/business the general movement toward overall freelance work. It’s not typically for someone to work for a single company their entire career and I think these types of business help illustrate that.

    • No doubt that these types of services are filling a niche, created in part by an economy that is not creating enough well paying jobs and making people question the value of a post-secondary education. However, it seems to me there is a limit to how widespread and effective they can be. My sense is – on the provider side – that they will be limited to people looking for a way to augment their (or their household’s) primary income and will be performed for relatively short time periods. I think the number of people that can work as a Fiverr provider or a Uber driver and keep, or move, a family into the middle class is limited. Similar story with something like Airbnb. How many houses would someone have to own and keep rented out to make a serious income? My guess is that most Airbnb hosts own just their primary residence, rent out it – or rooms – periodically for a little extra income. It isn’t their primary income.

      Thanks for stopping by, my friend and adding to the conversation.

  3. I’ve used Fiverr in the past with good results. While something like Airbnb wouldn’t work for me – I have no desire to rent my home to strangers – I wouldn’t mind finding other idle resources I could put to work for some extra money.

  4. Now I have yet to use any type of sharing service but I see things like Airbnb and Uber as great advancements in areas that have been lacking. You are putting resources to work that would otherwise be idle. Is the income generated from this going to be enough to replace a full-time job? I have no idea but it is a great way to allow people to make extra money.

    • ” … I have no idea but it is a great way to allow people to make extra money.” Agreed. My sense is that for most people it is a way to put a resource they already own to work and earn some extra – supplemental to a primary job – income in the process. Thanks for stopping by, my friend and kicking off the conversation.

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