No sharing economy without social media

No sharing economy without social media

Posted by Torben Rick | April 18, 2013 | Strategy
No sharing economy without social media

Sharing is an old idea

The “sharing economy”, also known as the “collaborative consumption”, “peer economy” or “access economy”, consists on peer-to-peer rental schemes providing extra income for the owners and lower prices for the borrowers.

Sharing is an old idea, but its potential to generate economic opportunities is only just beginning – it’s a new type of enterprise that strives to make it easy for people to share resources.

Shared economy - internet evolution

No sharing economy without social media

These new services rely on the web, impersonal relationships, and they are based on ratings and reciprocal reviews from unknown people to build trust among their users. This type of business couldn’t work out before social media platforms:

We couldn’t have existed ten years ago, before Facebook, because people weren’t really into sharingNate Blecharczyk, Airbnb founder

Thanks to social media, people are generally more comfortable meeting new people using technologyDavid Lee, early investor in Airbnb

Further, some peer-rental services allows integrating Facebook to let owners and renters check whether they have friends – or friends of friends – in common.

Trust is so important to all these marketplaces:

Airbnb specifically uses a feature called social connections. If you’re a host and a guest wants to satay with you, we show how this guest is friends with other members of the Airbnb community who are more reputable. If a member doesn’t yet have a reputation on their site, they could still be associated with other people who are trusted in the Airbnb community, serving as its own social validator – Nate Blecharczyk, co-founder and CTO of Airbnb

What looks like a disruptive new model will probably end up being mixed into existing models and embraced by incumbents, as has often happened before. When new markets come in, they often look more democratising than they end up becoming.

The idea of renting from a person rather than a faceless company will survive, even if the early idealism of the sharing economy probably will not. The fact that regulators, tax collectors and big companies are now sniffing around a model that has been embraced by millions of people is a measure of its value and growth potential.

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

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