During recent years, sharing economy companies, which are built on the idea of collaborative consumption, have been on rise. Companies like Uber and Airbnb established platforms, where buyers and sellers of services and assets are connected for short-term peer-to-peer transactions. With convenience for the customers, variety of options, and transparency, such companies seriously challenged powerful sectors like the taxi and hotel industries. Thus, sharing economy is an inspiring model for startups aiming to provide services in certain industries.
Why Is The Sharing Economy Important For Startups?
Disruptive innovation always changes the consumer choice and markets. And, sharing economy is certainly a type of disruptive innovation because such companies in different sectors truly transformed their industries. According to one idea, “the sharing economy motivates tech startups by providing greater opportunity for connection between individuals and new possibilities to create sharing platforms that serve an unmet need”1. Thus, with changing consumer demand, this disruptive innovation became more important for startups in certain sectors in recent years. Sharing economy is applicable in many areas. In many sectors like tourism, sharing economy allows individuals to make money from underused assets. And, in some sectors, it truly facilitates the lives of people. In order to learn about sharing companies in different sectors, you can read this article.
The Future Of Sharing Economy
Sharing economy has many benefits since it is environmentally friendly, accessible, and has many business and employment opportunities. Due to the positive impacts of sharing economy, it was estimated that such startups had a huge potential to grow. However, after the coronavirus pandemic, the future of sharing economy is unpredictable. Since “sharing” is the core idea of these companies, a highly contagious pandemic can severely affect the sharing economy. Right now consumer demand for sharing economy “has all but vanished”2. Furthermore, during a recession, getting investments for a startup would also be challenging. However, sharing economy startups can rise again after the recession. According to several sources like Statista, there may not be a significant decrease in the sharing economy demand3. Thus, during this recession, risk management and accurate assessment are essential for one’s success.
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