After seeing the success of Uber Pool and Ola Shared services it becomes quite discernible that Indian society is quickly adapting itself to the shared economy. The millennial crowd is lesser emotional for asset based pride and has learnt to make best and optimum use of resources. Gone are the days when buying a car or house were status building exercises, or rather to the extent of even owning a TV or furniture looks more futile. However, at the same breadth I would also emphasize that shared economy might be a new jargon of Global Startup ecosystem but it exists from the earliest known civilizations across the planet. The basics of Economics started with barter system, the best known shared economy. Without taking you to BC, the most recent old example of the joint family culture which existed quite prominently 20 years back, was nothing but a strong shared economy. Early 90s was a typically fast turner in Indian societal behavior and proved to be a more materialistic decade. Increased corporatization and better spending power dragged the generation in a rat race of ownership.
Re rise Of Shared Economy
Very soon people realized that ownership comes with a momentary pride and long term responsibilities and care cost. The power of Internet was most instrumental in building the communication channels between individuals prominently called peer 2 peer. Sky rocketing price of real estate, increase in fuel prices and stability of corporate salaries were other major factors which pushed individuals to look for most efficient expense notes. One ecological factor “GLOBAL WARMING” (don’t know how many cared for this though) has certainly played a pivotal role forcing the newer generations to preserve for their successors.
The biggest contributors to scale up the shared economy have been the startup industries oozing out with brilliant ideas and bringing the globe on single platform of internet. Two industries in India trying to extract best opportunity of shared economy have been real estate and public transport. Startups like AirBnB, Nestaway, Rentaluncle, No broker etc gave special prominence to the shared living spaces, PGs, apartments and, similarly evolved a new concept of co working space driven by Innov8, Instaoffice etc. Public transport industry in India led by Uber, Ola and Meru brought out the benefits of cab sharing and pool cars which in few years from now will certainly make skies of Delhi and other metros at least a bit bluer. Few other industries trying to make their ground into the shared space are Home services, fashion and apparels and other P2P shared services.
Why Sharing Will be Joy
Shared economy is not just meaningful for the reduction in price or more affordability, it brings numerous other benefits to the ecology and society as such.
Greener Planet– Sharing of apartments, hourly sharing of hotels etc will definitely bring down the requirement of newer hotels and will force the developers to think twice before erecting an unsold concrete jungle. Use of pool cars and judicious use of other such non renewable resources will certainly bring down the carbon footprints.
Social Connect– Increase of communication and sharing is making society more approachable and reciprocal. Sharing brings more harmony and acceptability amongst the groups. Sharing also tends to deter the social evils of racism and gender.
Flexibility– Sharing reduces one’s dependability and allows better maneuverability and flexibility. Imagine changing of job from Gurgaon to Noida if you are staying in your own home and are bound with the merciless devil of ownership.
Sharing like any other concept comes with it’s own demerits and limitations which should not be shrugged off for a better understanding of the long term impact of Shared Economy.
Economic slowdown– Sharing of tools, resources, spaces etc will slowly start pulling down the demand curve due to lesser requirement. This will be typically observed in manufacturing and real estate sector.
Unemployment– This stands self explanatory, reduction in production leads to unemployment and further decline in purchasing power. Some of this gap will be covered by the new industry of sharing but by virtue of the concept this new industry will never attract a parallel workforce.
Trespassing of Laws– The rise of shared economy is more towards profit organizations as compared to a very few non profit one’s. This leads to commercialization of almost every resource available and thus in a run for money several old laws are either neglected or beautifully bypassed. Short term house rentals are still not covered in any commercial activity across many countries and thus leave the law enforcement agencies quizzing. This also reflects the need of amendments in the older books to stay abreast with new technologies and innovations.
Future Of Sharing
The new experimental generation is more inclined to experience everything in their lifetime as against the Gen X claiming to have a satisfactory life. With the hunger to experience more, the millennial are not ready to create fixed assets with lifelong EMI liabilities. These characteristics and openness to society will definitely boost the need of shared economy worldwide. Companies getting into the shared space might be looking ahead of time currently especially in a country like India but are probably best timed to capture the futuristic market. Read more articles by Vikrant Khare CEO Rental Uncle.