The climate crisis has become a climate emergency. But what does this mean for your business?

In short, it means there couldn’t be a better time to think of ways to encourage your staff to live more sustainably – both in and outside the workplace. Educating your organization about the sharing economy and its benefits is one way.

But first, what is the sharing economy?

It’s using technology in the form of an app or an online platform – to connect with other people (rather than businesses) to borrow, rent or swap instead of buying. In other words, it’s anything that could be described as ‘the Airbnb of’ like listing clothes on a website for others to borrow or renting a car from a neighbor via an app. 

 

Trends of Sharing Economy

It’s certainly catching on – the total value of the global sharing economy is predicted to increase to around 335 billion US dollars by 2025, from only 15 billion US dollars in 2014*. That’s a significant increase, and it shows that this peer-to-peer, or ‘person to person’ way of doing things is an exciting new trend that your employees will be inspired to hear about. After all, it’s not just about living more sustainably, it’s about making – or saving – some money (much needed in the current cost of living crisis) and creating powerful connections, online and off.

But that’s not all.

 

Ways to Adopt Sharing Economy

Like your ESG goals, sharing is about making a difference and creating long-term, sustainable outcomes that strengthen our environment and societies. Here are three ways to get your staff started:

Food Sharing 

Food is a great first step to get employees to sharing

Like most other types of sharing, food sharing isn’t new but has been revived by technology and is making a real difference in the food waste problem.

Food-sharing apps like Olio connect people to those with food to share nearby, while others (such as Too Good To Go and Karma) work with restaurants, shops, and cafés with leftover stock. 

Encouraging employees to try the apps can positively impact their monthly food spend and can also mean they support local businesses. Inspired by the apps, your teams could even create a food-sharing community (online or off) within the workplace for sharing home baking, leftovers, or food that’s reaching its use-by date.

The idea is simply this: to direct food to where it should be – the human digestive system – and keep it out of the landfill.

Clothes Sharing

Clothes sharing is so enjoyable that it’s easy to forget it’s good for the planet.

Clothes sharing is not quite the same as clothes rental, although it’s part of the same trend for ‘access over ownership’.

Clothes-sharing apps connect people, creating a community and a greener model in the sense that nothing has been explicitly bought for rental purposes. This is good news, with mass production occurring on a scale that is no longer sustainable.

In fact, it’s responsible for around ten percent of global carbon build-up, producing five times more CO2 than the aviation industry**.

It’s the sharing economy model down to a tee: you have a thing, you rent it out – or you want something, so you rent it off someone else. And the benefits are (as for food sharing and many other types of sharing economy platforms) the chance to make money, be more sustainable, and access things that might normally be out of reach.

Why not encourage employees to use clothes-sharing apps for events or create offline clothes swaps in the workplace to save money and nurture the community?

Commute Sharing

Sharing can also be about where staff work – and how they get there.

The sharing economy can help make commuting more planet-friendly for employees. Car-sharing platforms and apps (like Karshare and Hiyacar) provide car owners with a way to earn money by renting out their own vehicle when they’re not using it, and on the other side of the equation, they allow those who don’t have a car – or need an extra one – to rent one locally, usually for however long they want. This means fewer cars per person and, in turn, fewer emissions.

For commuters, companies like Liftshare can help reduce the number of vehicles all heading to the same location.

Sharing Spaces for Hybrid Work

For hybrid workers, there is a new breed of sharing apps that connect people who need somewhere to work with spaces such as restaurants, cafes, and hotels. This helps workers get out of the house (important for mental and physical health) while ‘hosts’ – i.e., the local hospitality venues in question – reach new potential customers, look busy during quiet times, and make money from food and drink – although there’s generally no pressure to buy.

 

This article was contributed by our expert Eleanor Tucker

Frequently Asked Questions by Eleanor Tucker

Q1. How does the sharing economy create value in business?

The sharing economy is a business model where individuals or businesses share resources, goods, or services with others. This model has been made possible using digital platforms allowing peer-to-peer transactions. Here are some ways in which the sharing economy creates value in business:

Efficient use of Resources

Sharing economy businesses allow for the more efficient use of underutilized resources, such as cars, homes, and office space. By sharing these resources, businesses can reduce waste and maximize the value of their assets.

Cost Savings

Sharing economy platforms can help businesses reduce costs by sharing resources or outsourcing certain functions to other businesses or individuals. For example, a small business can use a shared office space instead of leasing an entire office.

New Revenue Streams

Sharing economy platforms can help businesses create new revenue streams by monetizing underutilized resources or services. For example, a homeowner can rent a spare bedroom on a vacation rental platform to generate extra income.

Increased Customer Engagement

Sharing economy platforms can help businesses build stronger customer relationships by providing personalized experiences and greater convenience. This can lead to increased customer loyalty and repeat business.

Innovation

Sharing economy platforms can spur innovation by providing a platform for entrepreneurs to test new business models and services. This can lead to the developing of new products or services that can benefit both businesses and consumers.

Overall, the sharing economy creates value in the business by providing more efficient use of resources, cost savings, new revenue streams, increased customer engagement, and innovation. By embracing this model, businesses can unlock new opportunities for growth and competitiveness in the rapidly changing business landscape.

Q2. What are the factors promoting sharing economy?

The sharing economy has become increasingly popular in recent years, driven by various factors that promote its growth and adoption. Here are some of the main factors boosting the sharing economy:

Digital Technology

The rise of digital technology, particularly mobile devices, and the internet, has made connecting people with resources and services easier than ever, allowing for peer-to-peer sharing and transactions.

Cost Savings

Sharing economy platforms can provide cost savings for consumers and businesses by sharing resources or services and reducing the need to own certain assets.

Environmental Concerns

Sharing economy platforms can promote sustainability by reducing waste and maximizing the use of underutilized resources, such as cars or homes.

Changing Attitudes Towards Ownership

Many people, particularly younger generations, are more focused on experiences rather than ownership of material possessions. The sharing economy allows for greater flexibility and access to resources without needing ownership.

Increased Connectivity and Trust

Sharing economy platforms rely on user reviews and ratings to build trust and accountability, which can promote greater connectivity and social capital.

Entrepreneurship Opportunities

The sharing economy has created new opportunities for entrepreneurs to start their own businesses and monetize their skills or resources.

Q3. How does the sharing economy increase efficiency?

The sharing economy can increase efficiency in several ways:

Better Utilization of Underutilized Resources

Sharing economy platforms connect people who have underutilized resources, such as empty rooms in their homes or idle cars, with those who need them. This improves the utilization of these resources, reducing waste and increasing efficiency.

Reduced Transaction Costs

Sharing economy platforms often have lower transaction costs than traditional businesses, as they typically do not have to invest in expensive infrastructure or marketing campaigns. This can reduce the overall cost of transactions, making them more efficient.

Increased Competition

Sharing economy platforms often create competition by allowing more individuals or businesses to enter a particular market. This increased competition can lead to lower prices and improved quality, further increasing efficiency.

Enhanced Resource Allocation

Sharing economy platforms can allocate resources more efficiently by matching supply and demand more effectively. This can help reduce inefficiencies and improve overall resource allocation.

Greater Flexibility

Sharing economy platforms often provide greater flexibility for users, allowing them to access resources when needed and for the duration they need. This can improve efficiency by reducing the need for users to invest in resources that they only need occasionally.

Q4. What are the challenges of sharing economy?

The sharing economy has brought many benefits to consumers and businesses but faces several challenges. Here are some of the key challenges of the sharing economy:

Regulation

The sharing economy operates in a regulatory Gray area, and there is an ongoing debate about how to regulate sharing economy platforms. Some argue that these platforms should be subject to the same regulations as traditional businesses, while others believe they require a new regulatory framework.

Trust and Safety

Sharing economy platforms rely on user reviews and ratings to build trust and accountability, but there have been concerns about the safety and security of users. There have been reports of fraud, theft, and harassment on some sharing economy platforms.

Worker Classification

Many sharing economy platforms rely on independent contractors to provide services, but there is debate about whether these workers should be classified as employees and receive the same benefits and protections as traditional employees.

Displacement of Traditional Businesses

Sharing economy platforms can disrupt traditional businesses, particularly in the hospitality and transportation industries. This can lead to job losses and economic displacement in some communities.

Inequality

While the sharing economy can provide opportunities for entrepreneurs and individuals to monetize their resources and skills, it can also perpetuate economic inequality. Some individuals or communities may not have access to the resources or technology necessary to participate in the sharing economy.

Overall, the challenges of the sharing economy include regulation, trust and safety, worker classification, displacement of traditional businesses, and inequality. These challenges must be addressed to ensure that the sharing economy can continue to grow and provide benefits to consumers and businesses while protecting all stakeholders' rights and interests.

Q5. What is the future of sharing economy?

The sharing economy has grown rapidly over the past decade and is expected to grow in the coming years. Here are some trends and predictions for the future of the sharing economy:

Expansion into New Industries

Sharing economy platforms will likely expand into new industries, including healthcare, education, and professional services. This expansion could lead to more specialized platforms that offer niche services to consumers.

Increased Collaboration between Sharing Economy Platforms and Traditional Businesses

As the sharing economy becomes more established, we will likely see more collaboration between sharing economy platforms and traditional businesses. For example, some hotels are partnering with home-sharing platforms to offer alternative accommodations to their guests.

More Regulation and Oversight

As the sharing economy grows, we will likely see more regulation and oversight from governments and other regulatory bodies. This could help protect consumers and ensure a level playing field for traditional businesses.

Greater Use of Blockchain Technology

Blockchain technology can make sharing economy transactions more secure and transparent. This could help build trust and reduce fraud on sharing economy platforms.

Integration with the Internet of Things (IoT)

The sharing economy could become more integrated with the Internet of Things, allowing for greater automation and seamless transactions. For example, smart homes could be rented out temporarily to travelers, with the entire rental process managed through an IoT platform.