Shared Economy & Social Change

Shared economy or collaborative consumption is not a new concept. Your ride in Uber or Lyft or your stay with Airbnb is an example of peer to peer collaborative consumption. What makes this concept interesting is the ability of the shared economy based companies to provide simplified yet delightful experiences to consumers. Such an easy services driven concept is enabled by technology and is silently making a profound impact on our society- leading a Social Change.

By definition Social change is a process of major changes over a period of time in pattern of behavior, cultural values and norms of society. These changes have long term impact on the society. So, let’s understand how these new age companies working on old model of Shared economy are helping to bring a Social Change:

1. Socially we are moving from Ownership to Sharing: If you closely look at these companies, they neither offer any technology for you to use nor they offer direct services. The delightful experiences are delivered by someone who is sharing the goods and services with you. This is helping people to move from full ownership to a sharing model thus opening up to unknown set of people from across the globe. This mode of sharing can’t be seen as selling as the provider of services is letting you be a part of something that they completely own & probably use as part of their daily lives. The more people share more they grow & more they grow the more they share. This way we are moving from I & you to we & us leading to a harmonized happy world. This is the foundation of the new direction and a paradigm shift that is leading a new way of life – a Social Change.

2.We are trusting the unknown: Every time you consume a service through the shared economy model you trust the unknown. Yes there are reviews about the services you are planning to consume but you have to trust reviews from people whom you don’t know and hence it is trusting the unknown. Consumers from one part of the globe are trusting people from another part of the globe – which they may have never visited. Imagine this – you have planned a holiday trip in Chicago and will be travelling from the comforts of your home in Colombo. You have booked a room through Airbnb and know nothing about your host in Chicago. The only source of information are some of the great reviews about the host. You still go ahead, complete a great stay with the host and give them 5 star reviews. This is really happening and happening all around the world at a pace faster than your reading speed. Phenomenal. We as a Society are willing to trust more & take more risks to become global citizens. Looking more optimistically, this model of mutual respect & trust is succeeding more than the traditional model of consumption. This ability to trust the unknown is challenging well established brands. It is making them innovate and win consumer’s trust on the basis of improved services or value or else they clearly face extinction. We are sharing more, we are also caring more and we are now trusting more as a Society.

3. We are embracing change: When you opt for services through the Shared Economy model you are moving from the traditional set up to a completely new model of consumption. The old models are more mature and it’s easy to go with the old and trusted way of doing things but the world is embracing this change. If the growth of companies like Uber or Airbnb is any indicator then it’s clear that world is moving almost in one direction and that is to move from traditional system to a new age model. When you look at leading surveys you will find that Airbnb is booking more rooms than Hilton or Uber operates in more than 250 cities and has better market valuation when compared to many leading Airlines in the world. This is not a surprise at all. With proliferation of mobile connectivity & internet we will see this change being embraced by a larger population thus ensuring a deeper & more significant impact on the society.

4. We are supporting Social entrepreneurship: Imagine this – an old lady in UK has a 3 room apartment near city center and she doesn’t want to put it on long term (1 year or more) rent as her distant family visits her once or twice in a year. At the same time she wants to monetize the real estate investment. She likes to meet people and doesn’t want to be lonely. With the shared economy model she can do all of this at the ease of few clicks. All that she needs to do is to have the details uploaded on Airbnb or similar portals that she trusts. She can not only monetize the investments but will also have the opportunity to meet people from diverse backgrounds. No need to go through the hassles of contracting with every tenant or hire staff to run the show, no running around authorities, no need of posting costly ads, no follow ups and no need to engage real estate agents. In this new model she can run her own business in simple yet very effective way. When the society starts supporting its constituents the progress is inevitable. The entire world- well almost- is coming together to support you in making you successful. That’s social entrepreneurship.

5. And we are helping the Environment: This one is easy to understand but has the most important impact on our future. When you opt for car-sharing, bike-sharing or a ride-sharing you are actually helping to reduce carbon footprints, you are saving fuel and everything related to it. Instead of buying new stuff we are re-utilizing and monetizing existing assets by sweating them which is always better than throwing and buying new. Shared economy model helps to reuse stranded assets like cars, bikes to vacant rooms as well as toys which otherwise sits idle occupying space and are seldom used. Underutilized goods turn into waste quickly and this model helps eliminate that. By doing this we are helping ease pressure on environment by lowering the amount of old goods that are discarded or thrown and also reducing the ever increasing demands of new goods. Add to this reduced traffic congestion, savings due to lower consumption of energy and resources and you will be able to clearly see the benefits of this new model on our Society as a whole. We are helping ourselves and the future of the society as a whole.

As you would have observed there is an inevitable change that we all are going through- we are sharing more, we are accepting more, we are embracing new, we are becoming diverse and we are making tomorrow better. This is definitely a big paradigm shift which will slowly lead to a Social revolution with far more lasting impact than current technological advancements.

With the rise of Social, Mobile, Analytics and Cloud or SMAC in short this change will further deepen and start impacting bottom of our social pyramid.