The Sharing Economy Offers More Choices for Consumers

April 15th, 2014 / Comments Off on The Sharing Economy Offers More Choices for Consumers

The sharing economy has exploded. Everyone is looking to start a business in this new space.We have all these idle assets that can be unlocked and used differently. On a philosophical level, it’s all about sustainability. It’s very gracious to say, instead of building more inventory, let’s better utilize what we already have. We’ve seen rooms and homes become available on Airbnb, offices become available through collaborative spaces like NextSpace and cars become available via RelayRides.

I love the whole idea of taking idle assets and turning them into something of value, something that can generate cash for people. It’s an incredible opportunity to supplement your income stream by renting out your home, office or car when you are not using it. How brilliant is it to drive to the airport and instead of paying for parking, have someone pay you to use your car while you are away!

Of course, much of this disruption is happening in industries that have been highly regulated and have very established ways of working. We’ve seen that it’s been met with fear, and it’s tried to be stopped by some incumbents. In New York, Chicago, Los Angeles and elsewhere, the hotel industry and/or local law enforcement have tried to find ways to ban Airbnb. Seattle restricted and Minneapolis prohibited both Lyft and UberX from operating, arguing it was unfair to the taxis.

But there are always the visionaries who understand where the world is headed before it gets there and there are always the early adopters who propel the world ahead. General Motors, for example, invested in RelayRides. It understands that consumers — and especially millennial consumers — have a different relationship with cars. They don’t want them and aren’t buying them, and only use them when they need them!These bans and restrictions are really unfair to consumers. What these new services are adding are not just rides or rooms. They are also offering choice. Choice is always a great thing. It’s a challenge to break ground in new industries due to regulatory issues. As my friend Andre Haddad, the CEO of car-sharing service RelayRides, says: “Innovation, by its nature, does not always fit within existing structures.” His company is currently suspended in New York while some unique compliance issues with state insurance laws are worked out.

Ultimately, we will all partner in some way to bring forth the future. The sharing economy is good for the economy and good for the world. I am excited about a world with fewer unnecessary cars and buildings, and one in which the consumer has more opportunity and more choice.

There will be regulatory hurdles along the way, but my advice to anyone starting out in this space: Don’t worry about that until it becomes relevant. Concern yourself first with what you would for any business: Is this an idea people want? How will you seed the marketplace? How will you make it go viral? As always, test in local markets, work the kinks out and determine how to expand.

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