Evolution of the Sharing Economy

In recent years, we’ve seen sharing economy services shift from consumer to corporate markets as they aim to integrate their traditionally individual services with adapting business needs.

To support this transition and make the process as smooth as possible – in true sharing economy style – companies are being given greater access to the services used by their employees and customers. But more than that, companies are the driving force behind the continued evolution of the sharing economy.

What is the sharing economy?

The sharing economy is built on the concept of sharing resources within the community and uses technology platforms to connect consumers directly with their needs. It’s also known as the collaborative economy, the gig economy, peer-to-peer economy and access economy. It’s essentially about sharing, trading, renting, swapping and gifting, usually between individuals, but not always.

The big players in today’s sharing economy are the likes of Airbnb, Uber and Gumtree. However, online consumer-to-consumer marketplaces have been around since the mid-'90s when eBay launched a platform for the sale of goods and services for individuals. These days, the sharing economy encompasses several industries, including:

• transport through rideshares,
• retail via online marketplaces,
• travel, like home-sharing,
• entertainment such as online streaming,
• employment, with freelancing and the gig economy, and
• finance, with the rise of crowdfunding.

A simple supply and demand scenario can be credited with the rapid growth of the sharing economy; where making money out of an idle resource meets the on-demand nature of the goods and services. Someone has a spare seat in their car, while another is looking for a ride in five minutes. An owner has a vacant apartment, while travellers are looking for somewhere homely to stay. Someone has specialist services to offer, while a business needs a specific project done by an expert, without having to hire an employee. And on it goes.

The value of the sharing economy

Valued at over $15billion in 2017, RateSetter predicts Australia’s sharing economy to reach a value of $55billion by 2022, with two-thirds of Aussies actively spending or earning through a sharing economy service. And in what is perhaps a reflection of the rapid acceptance of the industry, 52% of Australians trust the services of a shared economy provider over traditional alternatives.

While there is money to be made and savings to be had in the sharing economy, there is also a deeper level to it. Research by PwC found that 78% of adults in the US agreed that the sharing economy builds a strong community and 76% said it’s better for the environment, with the ‘sharing’ component reducing resources.

Recent research also found that 86% of customers now consider ride-sharing service Uber to be a mainstream travel option, while 83% believe it’s a safe option as well.

Regardless of consumer motivations, every indication points to continued growth. Ratesetter’s research found that 61% of Australians used a sharing economy service in the previous six months, with that figure growing to 85% for those intending to use a service in the next year.

The natural progression from consumer to corporate

It's not new per se, but we're seeing more of the prominent sharing platforms shift from just servicing individual consumers to tapping into the corporate sector. It's a shift that Ed Stalley, Head of Product for Corporate Brands at Flight Centre Travel Group, says is a natural one, as the consumer and corporate markets are ultimately the same end-user. And there’s no better example than Uber for Business, which has been available in Australia for five years now.

“Companies are always looking for ways to improve compliance with their travel programs and improving the traveller experience based on their user feedback is key. With travellers able to expense Uber trips today, it's a natural progression that corporates want to formalise that arrangement and improve visibility,” says Ed.

Even Global Head of Uber for Business, Ronnie Gurion, described the transition from consumer to business as ‘magic’ when he spoke at Illuminate 2019.

"Where (Uber) really did take the world by storm was through its simplicity and ease of experience. There was this consistent, very easy to use experience on the consumer side. And then the question became: how do we start to make that same experience available for businesses? And that's what Uber for Business was really created to do," said Ronnie.

The use of taxis and other ground transport for work purposes has always been included in company travel policies, but it's traditionally sat as an expensed item, with employees paying out of pocket and claiming via expense reimbursement. This scenario leaves very little, if any, data available about the trip and virtually no governance.

“Companies were increasingly asking us how we could help. So, we partnered with Uber to design a solution which gives corporations control of their Uber program with complete visibility of travellers and their spend. This results in significant time and cost savings in both the cost of the ride and processing expenses. And the traveller has an improved experience with no out of pocket expenses and Uber trips integrated into their travel itineraries,” says Ed.

Embracing the evolution of the sharing economy service has seen Uber rise to be the top expensed line item for many companies. The simplicity of Uber is that it's powered by the travellers' existing Uber app. And with the rich data and governance sitting behind each ride, companies increasingly view Uber for Business as a key component in their travel program.

The sharing economy continues to evolve

Just like consumer demand is driving our expectations when it comes to the future of travel, the continued evolution of services such as Uber for Business and even Airbnb for Business is largely being driven by their customers’ needs and wants.

“We launched to go after the travel sector; the consultants, the salespeople, the executives who were travelling either locally or when they're on a business trip. And then what we saw was all kinds of innovative companies and different use cases where they were coming to us saying, ‘can you do this, and can you do that? We want to use Uber in much more robust ways, not just for our employees but for our customers, for our recruiting candidates. Can you do the same thing with Uber eats?’” said Ronnie.

From this customer feedback and demand for an expanded offering came Uber Central, which provides the opportunity for a ride to be created for someone outside of your organisation, like a client, customer or recruit, with the ability to track their ride. And in true sharing economy style, the services are being driven by market needs.

“You could do ride vouchers at scale; we have retailers that are sending millions of vouchers out to customers to encourage them to come to the store or auto dealers for when you drop off your car. So, business travel was the first use case, but there are lots of B2B applications across the whole spectrum of a business, not just business travel,” said Ronnie.

Seamless integration helps businesses and travellers

Sharing economy services like Uber are now so ingrained that, looking back, we often can’t recall when and how things changed so much. This can largely be attributed to technology making the integration seamless, for both individual travellers and the businesses they are travelling for.

And it’s only going to evolve further. So, don’t just keep up with the times, get ahead by integrating Uber for Business and other sharing economy services into your travel program.