Sharing isn’t a new word, except when the word, economy is added.
The collaborative economy is a new business also known as the Sharing economy, the peer-to-peer economy, the gig economy, the on-demand economy, and the crowd economy.
The sharing economy is increasingly enabled by technology. Digital tools designed to support peer-to-peer cooperation have skyrocketed. The popular sharing economy giants are Uber and Airbnb, they have successfully expanded their services to various Continent.
What is the Collaborative Economy?
A collaborative economy is a market model in which individuals exchange assets facilitated by an online platform. The collaborative economy has expanded in five main sectors: accommodation, transportation, on-demand household services, on-demand professional services, and finance.
Some features of collaborative economy markets or community sharing practices are:
Photo by Anna Nekrashevich from Pexels
- The use of digital technologies to match buyers and sellers. Online platforms accurate measurement of idle capacity and dynamically connect potential users of an asset with its owners.
- Capitalizing on idle capacity.
Some collaborative economy and relatable concept;
Africa as a developing country- how they have joined the collaborative economy;
- Transportation: several Apps have been built by Africans including Taxify in South Africa.
- Innovative educational solutions have been developed in Africa. For e.g., Prep-Class in Nigeria.
- Innovative collaborative workspace for start-ups has sprouted across Africa and has bloomed throughout Nigeria, Nairobi, and South Africa.
- Healthcare: Medici App is an App that connects rural areas to remote medical advice and consultation.
- Delivery and logistics: Jumai and Konga in Nigeria.
- Mobile money: Edupay, Interswitch and SystemSpecs in Nigeria
The Evolution of the Sharing Economy
The sharing economy is now part of our culture and language. It has evolved over the past few years and now serves as an all-encompassing terminology that defines a host of on-line economic transactions such as business to business (B2B) interactions, and business to consumer, like Airbnb, Uber, etc.
In recent years, we’ve seen sharing economy services evolve from consumer to corporate markets as they drive to assimilate their conventionally specific services with adapting business needs.
To support this transition and make the process as smooth as possible, businesses and start-ups are being given much larger access to the services used by their employees and customers. But more importantly, companies are the driving force behind the continued evolution of the sharing economy.
The growth of Uber and Airbnb has spurred research experts to project that the sharing economy will grow from $14 billion in 2014 to a forecasted $335 billion by 2025.
The industry was valued at over $15billion in 2017, RateSetter predicts Australia’s sharing economy to reach a value of $55billion by 2022, with two-thirds of Aussies vigorously spending or earning through a sharing economy service.
This report clearly reflects the rapid acceptance of the industry, as 52% of Australians trust the services of a shared economy provider over the commonly traditional alternatives.
Positive impacts of the sharing economy
The many positive impacts of the sharing economy are evident in today’s world. Four advantages stand out among the rest: Goods and services are subsidized and accessible at affordable prices, passive and extra source of income is provided for unemployed people and those who need more money, it serves as an opportunity for entrepreneurs to leverage on.
Here’s a list of the 4 top benefits and impacts of the sharing economy:
1. Goods and services are available at lower prices – Prices are usually lower because you deal directly with the service providers who are everyday people who offer these services at their convenience boycotting the headaches or processes involved in dealing with the middle man and provides a simpler transaction that typically costs less.
2. Passive income or extra source of income for the unemployed and underemployed – It serves as passive income for young graduates with no jobs, the middle class who needs an extra source of income, or the old who are probably past the legal working age but still feel like they can do more. It also puts an unused or idle possession sitting idly and piling up dust, which otherwise can bring in extra income.
3. It has opened up the market to a range of new and diverse opportunities – This industry has provided the opportunity for new businesses to exist and for more people to set up new companies, sell problem-solving services that weren’t existing. Also, services that were not available to people in the past due to location or income are now readily available to everyone.
4. It has provided an enhanced sense of community – Another milestone is the improved sense of community that the sharing economy provides. Platforms such as Uber, and Airbnb, all connect and deal directly with the customers and so have programs that receive reviews and feedback from customers which are used to upgrade and improve their services to meet the customer’s needs at an interpersonal level. The sharing economy encourages communication and collaboration.
The collaborative economy has been growing at an accelerating pace throughout the world as a peer-to-peer network.
It has brought together a great diversity of business models that oscillate between capitalist platforms and those with a cooperative approach.
Although the collaborative economy or sharing economy is not a common word in Africa as we have been practicing the sharing model.
Africa is plagued with some issues like lack of trust, weak/harsh regulation regulators which makes a collaborative economy somewhat difficult for investors.
For instance, the ban of Okada in Lagos, Nigeria which affected Gokada, and the increment in tax for Uber/Bolt.
That notwithstanding, entrepreneurs are optimistic that the sharing economy is a sustainable economic ecosystem, one, whose growth is largely being driven by their customers’ needs and wants and this growth is set to continue primarily because of the rise in internet usage and applications.
If you enjoyed this piece, please don’t keep it to yourself. Hit the share button and leave a comment too.