The Car Sharing Economy

Peer-to-peer services are now operated for household items, extra rooms and vehicles. From 2008 to 2013, four million people used Airbnb to find a room hosted by a private individual instead of a traditional hotel. In the past, this type of transaction would have been impossible. The difficulties of advertising a single room, a car share or a surfboard for rent would have been cost prohibitive for a single provider. With the Internet, users can advertise their services on websites and connect with potential buyers. All of this is done for a fraction of the cost of traditional advertising. Meanwhile, social networks and reviews ensure that everyone involved is trustworthy.

A Growing Future

By 2025, the sharing economy is projected to encompass $335 billion. Although companies like Uber and Airbnb have had to deal with very public fights with regulators, it seems apparent that the sharing economy is not going away. Instead, it has become the new way of doing business. For the users, this new business model can be lucrative and results in a better use of limited resources. Car owners with RelayRides rent out their vehicles for an average of $250 a month. Airbnb hosts in San Francisco rent their homes for about $9,300 in 2013. For society, this situation certainly has its benefits. Every car that is rented out means that one less vehicle needs to be purchased. The users pay for services, and these services ensure that fewer new cars and resources are needed by society at large.

For the general economy, peer-to-peer services will bring about an even greater change in unemployment figures. While the government tries to track unemployment figures for figuring out Federal Reserve Bank measures and public policy, the actual number of unemployed individuals will have to be redefined. More workers will be employed by non-traditional sharing economy jobs and freelance work over the coming years. Workers who rely on just sharing economy jobs may face greater financial instability depending on business flow, but workers who have a mixture of traditional and freelance work will be able to remain financially viable in difficult times.

Nearly a decade ago, consumers were wary about the new trend of online shopping that was just starting to take off. As the marketplace adjusted to online commerce sites like Amazon, this type of shopping became mainstream. Likewise, the sharing economy will soon grow from a fringe economy into a part of the mainstream. More actors in this sector, better background checks and interconnected services will make this sector competitive against traditional businesses. Growing pains and controversy are natural along the way, but the sharing economy will continue to advance in the coming years.

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