Projections for the Sharing Economy

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sharing economy

Times are changing. High transaction costs used to limit the number of sellers in the market, but not any more. The internet has made it possible for many more people to become sellers – and renters. Tom Standage put it this way in a recent Economist cover story: “just as . . . eBay allowed anyone to become a retailer, now sharing sites like Airbnb and RelayRides allow anyone to become a renter.”

The benefits of paying for access vs ownership are appealing to a growing group of shoppers. Standage, digital editor of The Economist, explains that as this sorts out, we are likely to see a variety of models ranging from ecommerce to sharing commerce with many hybrids in between.

The biggest threat to the “sharing economy” he sees are regulations, taxes etc. When established businesses begin to the see this growth as a competitive threat, they are likely to lobby for these measures to even the playing field between themselves and the “sharing economy” models.

We expect that there will be a lot more growth in these peer-to-peer businesses and, as a result, alert entrepreneurs and consumers will have more options – and some companies too, will find opportunity in facilitating low-cost peer-to-peer exchanges.


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