Tuesday, October 21, 2014

A New Market: Sharing Economies

Imagine a world without time and utility waste.  New technologies are creating a society in which this is possible.  Software like AirBnb and Uber are allowing people to rent their stuff to others when it is not in use. The idea stems from the fact that people will most certainly invest in a car or a house, yet the car is sometimes just sitting in the garage.  There are two keys to creating a functional sharing website: system of accountability must be in place for these sites to function and the benefit in this technology outweighs the concern for their competition.
            The first came from a more in depth analysis of new markets that exist today.  I first looked at Amazon, TripAdvisor, and Ebay to see what they had in common. Forbes magazine has an article that talks about how the product rating system has been the most important feature in these companies’ success.  These new services are only possible because of the willingness for customers to trust other reviews.
            The second key came from a podcast I had recently listened to. Dubner shares stories from the hotel industry and their concerns that AirBnb will hurt their business. However, his professional economic opinion reminds us that when new technology eliminates lower level jobs (i.e. hotel maids, stewards, and bell hops), it opens new doors for these people to available for growing markets.
            While this new concept of sharing economies is new, it promises a lot of growth. The key to success is to understand that there must be a rating system, and that this system has benefits that outweigh the concerns.
AirBnb, Snapgoods, and 12 Other Pioneers of the Share Economy. (n.d.). Retrieved October 13, 2014, from http://www.forbes.com/pictures/eeji45emgkh/airbnb-snapgoods-and-12-more-pioneers-of-the-share-economy/

Dubner, S. (2014, September 4). Regulate This! A New Freakonomics Radio Podcast. Retrieved October 13, 2014, from http://freakonomics.com/2014/09/04/regulate-this-a-new-freakonomics-radio-podcast/