On a recent report, Tom Goodwin wrote for TechCrunch a line that caught my attention: AirBnB, the world’s largest accommodation provider, owns no real estate. In the wake of Marriott Hotels recent acquisition of Starwood, which was valued at $12.2 billion USD, we can see surprised that this combination, which will give the new merged company listings of 1.1 million rooms, will not be enough to surpass the more than 1.5 million listings that AirBnB already has in place. While the comparison may not seem even in terms of the ownership of these rooms, it highlights how the traditional economic system has been heavily disrupted by the growth of the sharing economy, a system that according to consulting firm PwC, could produce $335 billion in revenue by 2025.
For many, the sharing economy is just a return to our core values, as it appeals to our nature of belonging and sharing. Brian Chesky, founder of AirBnB, reinforced this idea: “We used to take belonging for granted. Cities used to be villages. Everyone knew each other, and everyone knew they had a place to call home. But after the mechanization and Industrial Revolution of the last century, those feelings of trust and belonging were displaced by mass-produced and impersonal travel experiences”. Chesky was certainly right. But the travel industry was not the only one that had become impersonal in the pursuit of mass production and the created need in society of owning assets that in real term produced little or no value in both their lives and their personal finances.
In The Business of Sharing, Alex Stephany provides a very accurate and clear description of everything that is happening within the realm of the sharing economy. He explains how the sharing economy is disrupting many core industries: financial services, transportation, and media, to name a few, and how the established institutions within these sectors, plus the governments, are reacting to this trend. We’d be surprised to know that across the different industries, the corporate reaction has been very different from one area to another, with taxi companies and hotel chains generally reacting in a defensive, reactive manner, as we’ve seen with all the legal claims brought against companies like AirBnB and Uber. On the other hand, automotive companies are reacting proactively, with Ford Chairman Bill Ford creating a venture capital fund focused exclusively on innovative solutions for mobility, Daimler creating Car2Go, its own car sharing service, and BMW becoming an investor in ventures such as JustPark, which facilitates the sharing of parking spaces in driveways and other locations, and it’s headed by author Alex Stephany as CEO. Throughout the book, we can see how access to capital is also being democratized by crowdfunding engines such as Indiegogo and Kickstarter, in which people have successfully come together for a common cause and made it possible, offering an alternative to the traditional and more complicated to navigate financing alternatives. He also describes worldwide movements like the one initiated by Rachel Botsman, the founder of Collaborative Consumption and one of the most recognised voices in the sharing economy, and OUIShare, which also aims to “connect the collaborative economy”.
Stephany offers an outlook of what we can expect for the sharing economy in the upcoming years, and tells us that, as a conclusion, we can count on that the sharing economy is here to stay: “The sharing economy is changing the rules of business. Why pay a lot to own a hedge trimmer you use twice a year? Why not pay a little to borrow someone else’s? Why leave your driveway empty all day while you’re at work? Why not charge someone to share it while you’re not using it? And, if your business is selling hedge trimmers or parking – or anything else people can share – what do you do about it?”
Overall, an outstanding, comprehensive compilation of everything that is happening within the sharing economy, complemented with engaging insights and mind-opening interviews that can help us incorporate the sharing economy to increase the quality of our lives.