Is the Sharing Economy here to stay?

When we think of the term ‘Sharing economy’ (also referred to as Collaborative consumption, Mesh and Gig economy) we generally have companies such as Airbnb (short-term room rentals, founded in 2008) and BlaBlacar (long trips car-sharing platform, founded in 2006) in mind. In fact, the Sharing Economy is a concept that has existed for longer than we think, with companies such as Wikipedia (information-sharing website, founded in 2001) for example.

Travis Kalanick who created Uber explained in his TedTalk that there actually was an ‘Uber’ already invented 100 years ago called the ‘Jitney’, which was the first car-sharing initiative in 1914. It saw tremendous growth, as within 1 year, in 1915, there were 150 thousand rides per day in Los Angeles.

Unfortunately the Jitney had been regulated out of existence due to demands from the existing transportation institutions and so, quoting Kalanick, ‘if you can’t share a car, you have to own one’, which followed with car sales growing exponentially and by 2007, there was ‘a car for every man, woman and child in the United States’.

In other words, the sharing economy has been around for longer than we think. Some critics today call it a ‘nightmarish form of neo-capitalism’, whereas advocates believe it is an opportunity for a more sustainable economy.

The only downside I see to the ‘gig’ economy is the disappearance of specialization. What I mean by that is we will all be jack of all trades and master of none. We will all be taxi drivers (eg Lyft), travel guides (eg Fromigo), or even teachers (eg Skillshare). However, the star-rating review system is one good remedy to make up for the lack of specialization and to maintain a high quality supply.

Here is an interesting infographic by Justpark that shows how many sharing economy companies there are for each sector:

So what is the ‘Mesh’ really about?

Well, the sharing economy is now more than just a business model: It’s a philosophy, a way of life, and an opportunity for financial independence. That is precisely why companies such as Zipcar, amongst many others, have been so successful.

Zipcar doesn’t brand itself as a car company, but rather as an information company. Indeed, sharing economy companies today are merely platforms powered almost entirely by people as users (peer-to-peer), exchanging goods and services between themselves, without the need of a third party (well, apart from the mesh companies providing the platform…).

Access VS ownership

It’s all about access: What’s the point of having a car and driving it only twice a week? We all know how expensive car maintenance costs are. So if you do not own a car today, it may be more cost effective to rent someone else’s car (especially if you are not going to drive it everyday).

At Ideal Flatmate, we’ve created a platform for flat-sharers to match and find compatible people to live with. We’ve found that more and more people are sharing a place to live in the UK, and the average age of a flat-sharer is now 32.

Flatsharing in London has been a growing trend, and is likely to continue due to the fact that rent prices have reached all time highs. We believe that flatsharing, and the sharing economy in general, is a great phenomenon as it brings people together to share things and experiences, creating a stronger sense of community, and at the same time helps people afford to live in London.

Joe Gebbia, one of the co-founders of Airbnb says it best: ‘The sharing economy is commerce with the promise of human connection’.

Financial Independence

The sharing economy however, does not mean that there is no need for ownership, au contraire. The average price of a room in London is £743 per month, so if you own a flat or a house you can make around £9,000 per annum (tax free), if you rent 1 room out to someone for 12 months at that price. You can list a room with us here if you would like to find a flatmate that matches with your lifestyle preferences.

Of course we don’t all own a house in London, unfortunately, but there are hundreds of different ways to make a passive income with your assets, thanks to the sharing economy! Here are a couple more examples:

- Fat Lama is a website that lets you rent & hire ‘almost anything’, from professional cameras to drones, you can make some extra pocket money by renting out your equipment from £5/day to £500+/day depending on your item.

- Task Rabbit is a peer-to-peer platform handiwork such as house cleaning, flat-pack assembly, TV mounting, moving help, etc. So if you are skilled in handiwork, it is a practical way of helping your neighbors in exchange for a small compensation.
DogVacay is a platform that connects pet-owners with pet-sitters! So if you are a dog lover, you can open your home to visiting pets while their owners go on holiday and earn boarding fees, ranging from $15 to $50 a night.