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The Sharing Economy: Sharing Isn't Just Nice To Do, It's Changing How We Do Business

CoCo's co-working space in the Grain Exchange
CoCo's co-working space in the Grain Exchange - Courtesy CoCo
From bikeshares to spare couches, from swapping clothing to trading tools, the sharing economy has picked up steam in the past five years. Some trend watchers point to Millennials as the source of the national uptick. Others say that a renewed interest in all things green, as well as a new brand of thriftiness that started during the recession, has led to the growth in collaborative consumption.  

Whatever the reason, the most successful examples of the sharing economy in action have all come from individuals who saw a system or industry ripe for disruption, and pioneered an innovative idea that spurred change. Entrepreneurs that have found ways to monetize their disruptions, while at the same time working to improve the system they are disrupting, are the ones who are turning the profits.  

Airbnb, the site that matches travelers with empty couches or beds in their destinations, is often held up as the "granddaddy" of the sharing economy movement. In 2008, three roommates in San Francisco founded Airbnb. One year later, Airbnb listings could be found in more than 1,100 cities in 77 countries around the world. Today, Airbnb’s reach is everywhere—literally, as more than nine million people have used its services, and figuratively, as its business model has spawned copycats in many spheres.

While the sharing economy is exciting in terms of development and innovation, it has presented issues for regulators. Airbnb faces ongoing legality issues in New York and the e-hail taxi alternative Uber very publicly battled the D.C. Taxicab Commission. Some critics argue that rideshare services like Uber will rob cities of potential income streams and cause division along socioeconomic lines, especially as successful startups pursue lucrative exit strategies and are bought out by major corporations.

It’s too early to get a clear sense of the effect of the sharing economy writ large, though some are trying. Most companies are still in the startup stage. What is clear is that thousands of entrepreneurs are finding ways to capitalize on the sharing economy. And one of them might just be the next Airbnb.

Twin Cities: Co-working, educating the inquisitive

According to a recent study commissioned by Campbell Mithun with Carbonview Research on the sharing economy, "not only did 60 percent of overall respondents find the concept of sharing appealing, but a full 71 percent of those who have used shareable products expect to continue.”

In the Twin Cities, Nice Ride bike sharing and HOURCAR are among the big success stories. So is Sophia Learning, an online peer-to-peer education portal “created with a vision of transforming education through a vibrant online community of teachers and learners,” states the website. “Our goal is to provide self­paced, inspirational, and relevant curriculum to learners of all stages and ages.”

Sophia’s creators capitalized on consumer behaviors evidenced through the use of social media in constructing a site on which participants teach using video, text, audio, and/or slideshows. To date, Sophia has more than 37,000 tutorials on its site. Mayo Clinic, Bill Nye (the science guy), and Capella University are among Sophia's partners.

In her article in Thirty Two, “The Sharing Economy Rises in the Twin Cities,” Jessica Conrad writes that: “The sharing economy leverages the power of online social networks and smartphones to provide a new way for old business models to thrive. No longer just the stuff of pioneer villages and hippie communes, everyday people are sharing, lending, trading, bartering, and swapping goods via peer-to-peer exchanges instead of owning them—and disrupting outdated patterns of consumer behavior at the same time, whether they know it or not.”

Not all sharing occurs online or digitally, however. Communal office spaces, writes Jessica Stillman in INC., "draw independent workers and start-ups to a shared office environment, usually at relatively low-cost, providing conference rooms and photocopiers as well as other less tangible benefits for entrepreneurs."

Joule and CoCo are co-working spaces where independents and small start ups can work, collaborate, conduct meetings, and network. Joule offers its members a variety of spaces in which to work: a cafe for meetups and casual conversation, a lounge with sofas and a fireplace for coworking and small gatherings, a rooftop patio, and furnishings that include armchairs and tables for collaboration and meetings. CoCo offers individual, group and corporate memberships for people interested in co-working, as well as flexible and permanent workspaces at its three locations in Minneapolis and Saint Paul.

The sharing economy, Conrad continues in her article, is “a cultural shift that builds trust between strangers. And it’s an economic revolution where access has become more important, and more fashionable, than ownership. The sharing phenomenon is turning the traditional business model on its head across sectors from transportation to hotels and tourism, and everything in between.”

Being neighborly in D.C.

It only took about 50 years, but someone finally found a way to monetize Herb borrowing Dagwood's garden tools. GoodShuffle is a startup in the peer-to-peer sphere that launched in Washington D.C. this year. Built by entrepreneurs Erik Dreyer and Andrew Garcia, the firm helps users make money from unused stuff that's lying around in their closets by lending it to their neighbors for a small fee.

The concept is simple enough. Dagwood has a power drill he's not using, so he posts it on GoodShuffle and sets two prices—a daily rental fee and a deposit (usually equal to the cost of replacing the item). Herb, who is sick of hearing about the broken porch railing from Tootsie, knows he needs a power drill to get the job done. Rather than spend the time and money researching and purchasing a power drill that will likely sit in his closet or garage once he finally makes the repair, Herb hops on GoodShuffle.

He finds a plethora of power drills to choose from. He chooses Dagwood's drill, and the shuffle begins, with Dreyer and Garcia's platform holding the rental and deposit fees until the exchanges are made and the drill is returned. GoodShuffle keeps 5 percent of the owner's cut of each transaction for its trouble.

"Our vision is to foster the local economy by putting things you own, but you don't use very often, [to work for you],” Dreyer says. In the process, he continues, GoodShufflers become microentrepreneurs, contributing to a sharing economy that’s often invisible but definitely a larger force to be reckoned with.

Pooling resources in Philly

Sharing cars, books, and tools can save money and help the environment. Yet sometimes it's the sharing of space that creates a collaborative community and allows for cross-pollination among creative minds.

The Philadelphia Sculpture Gym (PSG), which opened in June, touts itself as a makerspace for artists of all stripes; cross-pollination between artists and genres is a given, says Darla Jackson, PSG’s manager. PSG provides workspace for amateurs and established artists, and gives them access to a wood shop, metal shop, foundry, and modeling studio. "We get a variety of people—furniture makers, jewelry makers, crafters, sculptors,” says Jackson.

“People inspire each other and can see new possibilities in different media.” She herself sculpts in clay, plaster and resin. But she's recently been inspired by the metallurgists she meets at PSG. "I'm learning how to weld. It's really exciting!"

PSG follows a gym membership model: Members pay a monthly fee of $225 for unlimited access to the space, or they can start small and buy one-day-per-month access for $25. Membership allows access to the space, storage lockers, classes, and "personal training sessions," or one-on-one help with a project.

Jackson attributes the growth in makerspaces, whether artistic in nature or not, to "people wanting to do things for themselves and to get back to craftsmanship." The growth of Etsy, an online marketplace for makers, has supported artists' decisions to sell their work on the side or work full-time as an artist.

"There have been so many Etsy success stories of people quitting their full-time jobs,” Jackson explains.

Making space, starting in Baltimore

Cars have been at the forefront of the sharing economy since Uber launched. But did you know you can become micro-entrepreneur by selling the unused space in your driveway? Nick Miller launched Parking Panda in Baltimore in 2011 as a matchmaker app for empty parking spaces and drivers who need places to park. Initially, the company used a peer-to-peer model, allowing people to sell driveway space. Now it’s grown to include unused spaces in privately owned garages in more than 25 cities across the U.S.

"Parking is a pain point for everyone," Miller explains. "We solve a problem that so many people have." In Minneapolis, Parking Panda offers bookings near hundreds of venues, hotels, and restaurants, in addition to several neighborhoods, the airport, and points of interest like museums and sporting venues.

From the driver's perspective, the process is a simple one. Bridget is running late and needs a spot close to where she is interviewing downtown. She visits Parking Panda and creates an account or connects her Facebook account. She fills in the address and Parking Panda pulls up a list of available spots in map and list form. Each spot comes with a price tag attached, and clicking on one reveals the specifics. Bridget picks the one closest to her meeting, clicks a button and receives confirmation of her reservation. When she arrives, all she needs is a confirmation code. No circling, no scrounging for change, no stress.

Parking Panda typically takes a percentage-based commission. It’s a fee that its partners, including large sports arenas, convention centers, and theater operators, seem willing to pay. The company has experienced steady growth over the past two years. "We currently have 18 full-time employees, up from two," says Miller. His cofounder Adam Zilberbaum launched Parking Panda in 2011. That growth, coupled with the expansion from one market to more than 25, indicate that Parking Panda is a force to be reckoned with.

Allyson Jacob is the Innovation and Jobs Editor for Elevation D.C., another online magazine published by Issue Media Group.

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