What is sharing economy ? This question is rising among youth so lets have a answer to this. With the growing middle class and rising income levels in our country, the people of India especially the younger generation admire the progress since the time we had a tryst with an open economy and experienced an economic boom due to opening up of the economy in 1991. Slowly but steadily the country’s economy got in sync with the global moves and initial trickles got strengthened to transform into major waves and spread the benefits of the economic boom touching every aspect of daily life. Things which were essential, but seemed herculean and almost impossible have been made possible due to this global integration. The fingertip revolution(mobile enabled) is a classic example which has driven businesses towards this end making economically viable and logically feasible solutions emerge, thereby creating opportunities for growth while addressing the area specific or goal specific issues. In many cases, it has turned out to be a win-win situation for both parties involved.
With more people coming up for experiencing or for using a particular service, companies have found a way to accommodate the exponential growth of users. This phenomenon of operation is often termed as “Sharing Economy”, which effectively is a collaborative model where companies provide a service at a cheaper rate to a large consumer base via a platform. This type of businesses follows a simple mantra i.e. “Reuse and Reduce”. Reusing the available common resources will automatically lead to the reduction of the privately-owned similar resources, leading to cost-effectiveness and economically feasible models.
Sharing Economy in commuting (cab aggregation)
Starting with the best example from our daily use is cab aggregation. Cab aggregators like ‘Ola’ and ‘Uber’ started by providing a platform to connect drivers and consumers without owning a single vehicle of its own (Nowadays it is changing, since they are investing in electric vehicles and self-driving cars respectively). The concept behind their business model being, drivers and sharing of their respective vehicles. This business model proves to be a win-win situation for both the consumers and drivers. This service proves to be quite cheaper for a common man than to maintain a car, simultaneously proves to be a job option for many and these companies take a small commission for providing a technological platform for bringing them together or in other words connecting them. On the environmental front too, it is a welcome step, since it reduces congestion on roads which leads to a reduction in pollution. Moreover, the services like Pool or share are also provided by these aggregators, in which, using technology, three to four people travelling to same area or location are facilitated to share the same vehicle at a much cheaper cost than a personal cab. This concept proves to be acceptable and profitable for all parties involved, namely the company, the consumers, while helpful in reducing pollution resulting in lesser depletion of fossil fuels.
Second example is of the service and the industry which has been on rise since last year i.e. Bicycle sharing platforms. With the rise in pollution levels and the traffic in big cities like Gurugram, Mumbai, Bangalore etc., this sector has seen a huge number of start-ups sprouting. Players like Yulu, Mobycy and some international players like Ofo are slowly expanding their footprints in India. Entry of big start-ups like Ola and Zoomcar has also been evident. The sharing concept behind this sector, being, either docked bicycles or dock-less bicycles, which can be unlocked after scanning a QR code through the respective players mobile application. This is a healthier, environmentally friendly and a much cheaper option for a person to commute. But this comfort comes with a problem i.e. maintenance. Sometimes the bikes are either damaged or stolen and different companies are using different methods to curb it. With the rise of this healthy sharing platforms, new and smart cities like Amravati, Gandhinagar are building bicycle lanes which would lead to safer and faster travel using bicycles making short distance commuting enjoyable and effectively healthy.
Sharing Economy in Office Space(Co working)
With many start-ups in different domains booming up in India, scarcity of office space is a big problem. So many start-ups are trying to monetize this by providing co-working spaces along with many amenities to early stage start-up founders. Many co-working spaces like Wework, Awfis etc. are slowly coming up in Tier1 and Tier2 cities and provide services like lunch, wifi, recreational spaces, meeting spaces at a very affordable rate. The sharing concept behind this business model being workspace and charging a customer based on the usage duration or extra services he avails. The positive effect of these type of places is that they bring all people of different domains under one umbrella clearly helping people with networking. The rates of these co-working spaces are much lesser than a rented apartment outside (with no amenities) and turn out to be economical. Hence many entrepreneurs and freelancers are using this resource to build, innovate and network.
Sharing Economy in Daily use Items
Another aspect of sharing economy is the sharing of furniture and home appliances. These items lose premium with time. Hence with the value depreciating after some time span, many people nowadays are preferring renting, over buying furniture or home appliances. Especially the bachelors who move into a city for a short duration of time find it of great use. Many players like Rentomojo, Furlenco are effectively tapping this opportunity. The basic idea behind this concept is of using an asset multiple times (through re-use) by supplier and for consumers, it is experiencing different types of goods as per their need and affordability. Many start-ups are also innovating upon this concept by combining charging points, lights etc with the furniture. The sharing concept behind this business model being, renting of furniture or home appliances on a monthly basis or on different timelines. The major challenge for these services pertains to ensuring quality work in time. This entails emphasis and close monitoring of logistics i.e. both forward and reverse logistics. This space has ample scope if catered to properly and market is projected to be around $60 billion in coming years.
A growing economy has its own unique needs, and India is no exception. With the educated talented pool of young Indians scouting for opportunities across the nation, the need for such sharing services become a necessity to cater to the ever-growing stream of professionals. Irrespective of the area and place, such basic needs remain the same. Being fast to adapt to such necessities, entrepreneurs mushroom up at regular intervals, catering to local needs. The requirement thus is for an enabler who brings them on the virtual map to connect them to customers. It is here that these platform providers play a vital, critical and timely role in bridging the distance between supplier and consumer through use of technology and offer affordable solutions with a check on quality and adherence to timeline.
These start-ups operating on the sharing principle, work on the basic concept of sharing economy which involves using a resource available multiple times by multiple people which makes the model economical due to huge user base.
The dependence on these, platform-enabled services by the citizens and growing acceptability by young and old, embolden my belief that such platforms are here to stay and will play a pivotal role in times to come.