My first real foray into the world of the shared economy happened a couple months ago.
Some friends and I decided to go on a weekend trip to Chicago. When we started our hotel search, we quickly realized that all the hotels in the neighborhood we wanted to stay at were prohibitively expensive. Which is about the point that a friend of mine suggested we check out a website called Airbnb.com. The concept is simple: people can rent out their unused space (apartment, condo, house, or even just a room) to people who are visiting XYZ city and are on a budget. The person listing the space makes some extra cash and the one renting saves money, as the prices are usually significantly cheaper than a hotel.
When I expressed skepticism (typical Xer), my friend assured me that Airbnb runs thorough background checks and mediates between renter and rentee. So I relented, and off we went.
For a quarter of the cost of an actual hotel room, we rented somebody’s condo for the weekend. And to be honest, I understand the appeal. I really do. We saved a ton of money and were able to stay in the exact neighborhood we wanted. The only downside? I was acutely aware that I was in a stranger’s home every time I set foot in the condo. Whenever I put food in the refrigerator I thought, “this is someone else’s fridge.” Every time I took a shower I thought, “this is someone else’s shower.” At the end of the day I saved money, but never really felt comfortable.
On the flip side, my Millennial friend who had the idea to book the room in the first place loved the experience and said he never once felt out of place during our stay. He proceeded to gush about our rented digs and the money we were saving all weekend long.
Airbnb is not the only company to tap into this shared economy trend. This preference for sharing rather than buying has spread like wildfire, and there are numbers to prove it. FORBES estimates “the revenue flowing through the share economy directly into people’s wallets will surpass $3.5 billion this year, with growth exceeding 25%. At that rate peer-to-peer sharing is moving from an income boost in a stagnant wage market into a disruptive economic force.”
Even transportation has been impacted by this trend. Today, car services like Lyft and Zipcar allow people to get from A to B without actually having to own a car or use public transportation. Moreover, many cities have bicycle sharing programs that allow people to bike around their city without actually have to own a bicycle.
On the entertainment front, with the growing popularity of services like Netflix, HuluPlus, and HBO Go, there is also a rising number of young people canceling their cable subscriptions. Many Millennials are even sharing their passwords with their friends, something HBO CEO Richard Plepler is aware of. Earlier this year Plepler told BuzzFeed and CBS This Morning that it’s no secret to anyone that people are sharing: “It’s not that we’re unmindful of it, it has no real impact on the business.” He even recognizes how it can get people hooked and potentially bring in new subscribers. As Plepler bluntly put it, “We’re in the business of creating addicts.” Well, at least he’s honest about it… and the shared economy is clearly ushering in a whole new era and way of doing business.