image from Rick Torben's blog The internet has brought many changes to our lives, and a new change is well underway: the "sharing economy." Using internet sites, those without the wherewithal or desire to own a car, for example, can still borrow a car when they need a set of wheels. Homeowners or renters hit hard by the recession have taken to offering rooms for rent to travelers through sites like Airbnb . James Surowiecki writes in The New Yorker about the opportunities and the hurdles of this new business model. From the buyer's side, the benefits to using assets without owning them are great--no upfront costs, no storage issues, a lot more variety. The downside might be the availability of the asset you want when you need it...and there also may be issues about the quality of what you are getting, sight-unseen. Safety might also be a factor. From the seller's side, sharing assets can generate a revenue stream, for the small commission paid to the internet website. The downsides to the seller might be all of the usual hurdles to running a business--risk of asset damage or loss, unsavory customers, increased costs of insurance and maintenance. The upside to the economy as a whole, from a sustainability standpoint, is the much more efficient use of assets. Cars might only be used an hour or two in any given day. Those assets can be income-producing in what would usually be their down-time. But when private property is used for business purposes, municipalities need to be involved to regulate the businesses--for the protection of the neighborhoods. Also, sharing-economy entrepreneurs probably need some training on the basics of running a business--meeting tax obligations, getting the right insurance, etc. The real winners here, so far, seem to be the internet websites that have revenue coming in both from providers of assets, and from other advertisers on their websites. This revenue potential has spurred venture capital investment by the likes of Google--recently in Uber . I wonder who will be making most of the money in this new "sharing economy," and who will be doing most of the work... Source: " Uber Alles " by James Surowiecki, The New Yorker, September 16, 2013. Follow up: Have you ever used Airbnb, Lyft, Sidecar or UberX? Any other sharing-economy product? What was your experience? Do you think most of the providers of assets on the sharing networks think of themselves as "real" entrepreneurs? Do they deal with business licenses, insurance and other matters as a retail entrepreneur might, for example? Are there city ordinances where you live that prohibit or limit these internet businesses?
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