Investopedia defines the sharing economy as an economic model in which individuals are able to borrow or rent assets owned by someone else. Sounds simple enough, right?
We’ve seen this business model disrupt markets with high ownership purchase barriers and underutilised assets: two prime examples are Airbnb and Uber.
According to Price Water Coopers (PWc) the sharing economy in the UK alone is due to grow more than 30% year on year, generating over the next decade £18bn of revenue for platforms, while facilitating about £140bn worth of transactions per year by 2025.
With this said, the sharing economy’s development in my opinion, will progressively be driven by business rather social considerations; this due to fact that success in today’s society requires instant gratification for users, meaning sharing economy platforms require consistently available product or service providers.
Let's face it, we've been spoiled with on-demand apps from Deliveroo to Uber to Handy, and expect product and service availability non-stop with instant confirmation
If business considerations are driving the next phase of the sharing economy, I believe future profits aren’t likely to flow only from the things we rarely use – they’ll come from the things we use all the time.
Owning real estate then becomes an increasingly valuable asset over time with the growth of technology, and when your home acts more and more like a lifestyle hub - check the rise of the consumer trend 'cocooning',
Services such as Deliveroo and Netflix have blessed us with the ability to turn our homes' into entertainment and work spaces'.
This is especially true within metropolitan cities, where we find less and less reasons to leave home.
This means owning and renting residential real estate allows you to control the environment where people spend the majority of their time, and puts you at the point of sale and epicentre of future sharing economy solutions for every day objects.
In the future, ambitious landlords might even take inspiration from the low cost budget airline industry business model: cross-selling and up-selling products and services in addition to a basic service.
For example, Easy Jet charges low fares to transport passengers from point A to B but, earns additional income through an array of add on services from seat upgrades to baggage check -ins to a in-flight cafe.
This means as a landlord you can rent out other essential items to your tenants. Or you can negotiate commission deals from suppliers of essential items that get rented within your platform - your 'home' - such as heavy duty appliances: smart fridges and ovens.
In the end, technologies can be put to a range of purposes: a shovel can be a murder weapon or a landscaping tool depending on who is holding it.
Whether consumers get their head knocked in, or a slightly better place to live won’t be a technical question but, as always, a political one.
One thing though is for certain, new technologies and the growing acceptance of the sharing economy means asset owners increasingly gain leverage, on how they can monetise their assets and increase their return on investment.