The Sharing Economy -- What It Means to Your Business


Technology has enabled people to share homes (Airbnb), rides (e.g., Lyft, Sidecar, cars (e.g., RelayRides, Getaround), bicycles (e.g., CycleHop), home wifi networks (e.g., Fon), and more, easily and inexpensively.  Technology has enabled people to share their money with worthy causes through crowdfunding (e.g., LendingClub). And businesses are getting into the sharing economy, also referred to as collaborative consumption. The purpose: Only pay for what you need.

Sharing space
Businesses can use well-outfitted commercial space when they need it at a modest cost. For example, with WeWork, an office, as well as a community of other small businesses, are available for $250 a month. The number of co-working spaces in the U.S. increased in the past year by 83%.

Sharing equipment
Businesses may need certain equipment all of the time and could use it on an as-needed basis. For example, Shared-Use Farm Equipment (SUFE) Pool and Maine Farmland Trust lends out large farm equipment. TechShop in nearly a dozen locations nationwide provides manufacturing space and equipment for a monthly fee.

Cautions
Not all cities and towns are embracing the sharing economy when it intrudes on their ability to impose permits and collect taxes. Cases in point:

  • Airbnb has been hassling for a couple of years with NYC over tenancy laws.
  • FlightCar, a service that lets a car owner allow a traveler into San Francisco Airport to use the vehicle (which, by arrangement, has a $1 million liability policy) -- the airport isn’t happy because no fees are being paid as compared with rental car companies. And the town where the company is based isn’t happy, pulling a conditional permit because of noncompliance issues. The company and airport are now in court.

Conclusion
It’s clear that the sharing economy is here to stay, although to date, many opportunities are limited to certain urban areas. The only question for business owners is whether it makes sense to become a part of it and how to do this successfully.

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