Shared economy: Definition and functioning

The shared economy is a technological advancement that is projected to surpass $300 billion by 2025, as stated by PwC.

As resources have become pricier, we have become more conscious of cutting down on consumption. This led to the emergence of sharing solutions by digital platforms and startups.

The rise of the shared economy has gained followers and challenges previously dominant business models.

What does a shared economy entail?

A shared economy, also known as a collaborative economy, refers to an economic system where individuals share goods and services.

The idea offers various benefits like saving time and money, contributing to the growth of the market. As a result, people are expected to value access over ownership in the future, driven by the importance of mindful consumption.

The sharing economy has expanded in size and reach across different industries in recent years, thanks to the emergence of internet platforms that enable individuals to share their resources.

The collaborative economy represents a different consumption model emphasizing sharing resources instead of accumulating them, aiming for a more sustainable lifestyle.

Companies today are more than suppliers; they now act as facilitators.

They create systems that link individuals to facilitate the sharing of resources, skills, and goods.

This creates fresh possibilities for companies to tap into untapped markets and connect with diverse audiences, fostering a more lively and adaptable business setting.

This model is not limited to just one industry.

It can be found in locations like transportation, housing, workplaces, and retail.

Companies such as Uber and Airbnb made a significant impact by changing how we view transportation and tourism.

How was the concept of the sharing economy established?

The shared economy has historical roots, but it has only more recently become a popular and established business model.

Communities come together to share resources, a practice that has been around for a long time.

After the financial crisis of 2008, this idea became widely accepted as a permanent fixture in society.

The 2008 crisis prompted a shift in consumer behavior, causing a reevaluation of conventional models and a search for more sustainable consumer choices.

The shared economy is also influenced by the open source movement, which advocates for the development and free exchange of data and technological structures.

Currently, specialists argue that the term now encompasses various other ideas like open source, peer-to-peer transactions (particularly cryptocurrencies), blockchain, and more.

Why is the collaborative economy significant?

The collaborative economy influences the way products and services are utilized and allocated by enabling individuals and businesses to share resources rather than buying them outright. This approach can lead to advantages in terms of economy, society, and the environment.

Economic factor

The shared economy can cut expenses for consumers and increase earnings for providers, benefiting both sides economically.

Digital platforms that facilitate this activity enable individuals to temporarily rent cars, buildings, and equipment without the requirement of making a permanent purchase.

This can increase the availability of specific products to a larger audience, and also create additional income opportunities for owners.

Social elements

The shared economy can influence social and professional relationships, along with its financial and environmental impacts.

Sharing services have the potential to foster connections among individuals who might not otherwise interact, leading to fresh opportunities for sharing knowledge and working together.

In the job market, there are platforms that link independent workers with specific needs, enabling tasks to be completed as needed without the requirement of conventional employment connections.

Technology progress has made it easier for the model to expand, allowing for increased accessibility in connecting supply and demand.

Regulatory obstacles and concerns regarding consumer and worker protection continue to spark discussions about the boundaries and duties of this approach.

Companies in this industry must address matters like taxation, service provider rights, and effects on traditional business operations.

Shared economy examples in Brazil

Companies like Uber and Airbnb are growing rapidly in Brazil due to the widespread use of smartphones, but they still have various untapped opportunities to explore in the country.

• Transport options like Uber, Waze, and BikeSampa are available for transportation.
• Services provided include Bliive, Cabe in Mala, and Smart delivery.
• Goods (DescolaAí, Quintal de Trocas, Enjoei).
• Space sharing services like Airbnb, Coworking Brazil, and Couchsurfing.
• Funding options available through platforms like Catarse, Prosper, and Lending Club.

Other cooperative consumer businesses have also emerged to change our daily lives, like electric bicycles and scooters addressing urban mobility issues, and group financing known as Crowdfunding.

How does the concept of the collaborative economy operate?

The worldwide crisis in recent years, combined with the impact of technology and digitalization, has brought about the emergence of shared economy principles, mindful consumption, and the era of collaboration.

The principles of the collaborative economy, such as sharing and access to products and services, are influencing both production and investments, according to Sebrae.

There are currently 17 million companies in the shared economy, employing 60,000 workers and having received $15 billion in funding, as per the VentureBeat article.

The sharing economy is effective because it provides the opportunity to engage in various activities in a cost-effective and socially responsible manner by utilizing available resources.

The collaborative economy is transforming how people go on vacations, dress, travel, eat, and access financial support programs.

Benefits of the collaborative economy

The foundation of the collaborative economy is straightforward: individuals utilize the Internet to broaden their connections, enabling one community member to conveniently fulfill the requirements of another customer.

The shared economy not only benefits the environment but also fosters trust among community members. Moreover, it offers various advantages.

Drawbacks of the collaborative economy

While the shared economy has advantages, both companies and consumers must also take into account the drawbacks it brings.

The sharing economy’s immediate financial impacts

The direct economic impacts of the sharing economy are likely beneficial as only those who benefit are involved in transactions.

The creditor incurs minimal expenses in goods lending as the borrower does not require the product during the loan term, providing the borrower free access to the product.

The shared economy is said to bring about positive environmental and social impacts, as well as economic outcomes.

Collective funding offers numerous advantages and has assisted builders in securing resources from small investors. It has been suggested as a viable option for financing student and social programs.

What factors have contributed to the significant growth of the shared economy sector?

The rise of the collaborative economy is linked to shifts in consumption habits, advancements in technology, and changes in the labor market organization. These elements together resulted in the increased availability and request for services that involve sharing resources and goods.

Digital transformation

Scanning has greatly aided in this expansion by enabling swift and cost-effective connections between individuals and businesses through online platforms and applications.

Accessing transportation, hosting, and rental services via mobile devices has expanded the reach of this model and lessened the obstacles that hindered its adoption.

Consumer behavior transformation

Changing consumer behavior has become another important factor, as many individuals and companies now prefer to explore more adaptable alternatives instead of relying solely on owning goods.

Short-term rentals of vehicles, real estate, equipment, and clothing are utilized to address various needs, providing improved expense management and resource optimization.

The collaborative economy in our nation

In Brazil, the sharing economy develops similarly to what has been seen in other nations.

Mobile technologies, like smartphones, have made it easier for people and businesses to connect and work together to offer goods and services through user involvement.

There are other platforms apart from the popular ones, such as Enjoei for buying, selling, and trading used items, Catarse for crowdfunding, and couchsurfing for sharing accommodation among people.

In 2017, Airbnb directly influenced the movement of R$2.5 billion in the Brazilian GDP, as reported by Época magazine.

Is collaborative economy the same as shared economy?

Although the terms are alike, they have different definitions.

The collaborative economy involves sharing resources among various parties for mutual gain, typically with the help of technology.

The shared economy includes various activities where people directly exchange goods or services, like carpooling or renting out property.

The collaborative economy utilizes technology to encourage cooperation and trust between people who may not have engaged in direct transactions otherwise. This may include service providers offering tailored solutions or platforms enabling users to generate new markets.

This model makes it easier for individuals with limited resources or abilities to enter markets and seize opportunities without requiring the establishment of trust beforehand; trust is established directly on the platform.

The shared economy relies on established connections and trust networks, like those among friends, family, or local communities.

Technology can assist, but established connections primarily facilitate transactions, as the involved parties possess sufficient knowledge to engage in trade without depending solely on anonymous online interactions.

How can you implement this idea in your business?

Adopting the shared economy in a company necessitates careful planning and alignment with the business model. Businesses can implement this concept by sharing internal resources, providing temporary-use services, or establishing more efficient platforms to connect supply and demand.

Asset utilization optimization

Optimizing asset usage is one of the potential options.

Companies can save money by sharing workspaces, equipment, or vehicles instead of having separate setups for each requirement.

Coworking spaces enable various companies to share the same workspace, cutting down on costs and increasing chances for collaboration.

Machine and tool rental can serve as a substitute for industries needing costly equipment for occasional use.

Providing services based on access

Another approach to implement the sharing economy involves providing services focused on access rather than ownership.

Companies that typically sell goods can consider the option of providing rental or subscription services.

This approach is currently applied in sectors like transportation, where businesses provide bicycles, scooters, and cars for short-term use, as well as in the tech industry, where electronic devices are leased instead of being sold.

In conclusion

The sharing economy has expanded and provides competitive benefits by creating new markets, generating numerous job opportunities, and reshaping the concept of sharing and business practices.

We believe that collective investment is an innovative tool for shared economy and value co-creation in companies, according to INCO.

The collective investment is transforming the economic landscape by making real estate investing accessible to all.