Why Buy When You Can Share?

My husband and I recently honeymooned in Italy and Croatia. As we made our way through both countries, we stayed almost exclusively in homes we rented from Airbnb, we took several Uber rides, and we were wined and dined at the home of a Tuscan winemaker, an unforgettable experience we booked through Airbnb. In short, we took part in what is known as the “sharing economy.”

The sharing economy goes by many different names and is difficult to define. The Oxford Dictionary took a stab at it in 2015 when it defined the sharing economy as “an economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the internet.” Basically, the sharing economy is a system in which individuals and businesses can share their cars, homes, clothing, and other assets, thereby making money on otherwise underused assets. On the other side, individuals and companies can pay to use these assets at a fraction of the cost of buying them. Win-win. Examples of well-known companies operating in the sharing economy include:

• Airbnb, an online marketplace used to arrange lodging and tourism experiences.
• Uber, a peer-to-peer ridesharing and food delivery company.
• Lyft, an on-demand transportation company.
• Turo, a peer-to-peer car sharing company.
• Rent the Runway, a clothing rental service.
• Le Tote, a clothing rental subscription service.

The concept of sharing resources has historical roots. However, the old concept was made new in the 21st century thanks to new technologies such as the internet and mobile phones. The concept has since seen extraordinary growth worldwide.

Take my honeymoon as an example of such growth. Airbnb hosted its first guests in 2007. Each night my husband and I stayed in an Airbnb home in Italy or Croatia, we were two of the over 2 million guests that stay in Airbnb homes per night worldwide. Likewise, the first Uber ride occurred in 2010. Each Uber ride my husband and I took on our honeymoon was one of 15 million trips that are given each day around the world. 

But Airbnb and Uber are just two of the many individuals and companies currently operating in the sharing economy. In 2015, PricewaterhouseCoopers released the results of a global study on the sharing economy, estimating that the entire sharing economy had current global revenues of $15 billion. PricewaterhouseCoopers predicts the sharing economy will increase global revenues to around $335 billion by 2025. 

Clearly, the sharing economy is growing, and is growing rapidly. And it does not appear to be stopping anytime soon.