The 6 key trends for the sharing economy in Australia for 2016

Surprised by the take-up and acceptance of sharing economy services in Australia?

I see six key trends coming up this year for the sharing economy.

1. The power of sharing is growing

2015 was a massive year for the sharing economy in Australia with a seismic shift in consumer behavior:

·         Under mounting pressure from 1 million consumers, Uber was legalised in both the ACT and NSW and now has more drivers in Sydney than there are taxi drivers;

·         AirBnB grew 100% to over 50,000 properties across Australia, and is expected to grow to 100,000 in 2016; and

·         A whole host of new and niche sharing platforms now provide access previously only available via ownership or cost-prohibitive alternatives.

Mass adoption of the sharing economy is now well upon us, with the widespread use of services such as:

·         Uber for ride-sharing;

·         AirBnB for accommodation sharing;

·         CarNextDoor and GoGet for car sharing;

·         Airtasker and HiPages for micro-jobs;

·         MadPaws for pet sitting; and

·         Spacer for self-storage.

These are increasingly being recognised as household names.

2. The rapid shift is a cultural and generational thing

Technology, environmental and cost concerns are contributing factors to changing consumer behaviour and mindset:

·         Culturally, there is a shift in thinking whereby Gen Y and Millennials are interested in experiences over things and immediacy over security. Modern consumers want convenience, flexibility and customized services on demand;

·         Consumers are able to do more with less by sharing or exchanging items instead of buying new ones without the capital costs and maintenance burden of ownership;

·         Confidence and trustworthiness in sharing has now been established by Uber and AirBnB, with new participants piggybacking off their established reputations;

·         An increasing awareness of the global footprint that follows unnecessary production encourages people to change the way they fulfill their needs. Our experience at Spacer is that on top of commercial benefits, Hosts feel a sense of strong community benefit from sharing, an interesting motivator for sharing economy participants.

·         As P2P services continue to broaden, everyday behavior is shifting towards hyper-local,personalisedservices, such as local petsitting or babysitting marketplaces. Ironically, the global delivery platform (internet) is driving greater local community interaction in a culture where knowing our neighbours has practically disappeared.

3. The rise of B2C and B2B in a P2P world

The cultural shift in behaviour has got big and small business interested. Uber is valued at 3x the market cap of Woolworths, Australia’s largest grocery chain. Business owners are scrambling to develop strategies not only to compete with sharing disrupters, but actively participate and partner with others to ride the sharing wave. A recent example of this is General Motors investment in ride-sharing service Lyft.

Interestingly, the Uber experience has shown that in many cases, sharing models maintain — and in the case of ride sharing — increase the overall size of the market, by engaging and providing access to services otherwise unaffordable or unattainable.

B2B sharing is a natural extension of the P2P model. Providing different challenges is a clear trend for the future of sharing.

4. Trends and new models

Collaborative consumption has created the rise of ‘micro-entrepreneurs’ and the ‘gig economy’. Individuals with skills or assets can choose where, when and how often they want to work:

·         More than 30% of the Australian workforce freelance (that’s 3.7 million Australians!) and they contribute $51 billion to the economy;

·         Entrepreneurs do not need to be tech savvy or even business minded – marketplace technology means that any individual can now make extra money, in a trusted, secure environment;

·         Co-working spaces are increasingly becoming popular with both freelancers and start-up entrepreneurs. WeWork, the largest co-working company is already valued at over US$10 billion and has over 40,000 entrepreneurs sharing space within their co-working spaces right across the US. They are now rolling out globally; and

·         Businesses such as Splend (car hire) are now renting out the ‘tools’ to enable individuals to participate in the sharing economy, even where they do not have the assets themselves.

5. Specialist providers of ancillary services to the sharing economy

As the sharing economy grows, so too does the requirement for professional services and products to support the sector. Online sharing resources such as Collaborative Consumption, Shareable and Wholesome Dollar help participants navigate the sharing landscape, and a growing trend is the number of specialist technology SAAS, insurance and legal providers pitching themselves as ‘sharing economy experts’.

6. This is only the beginning

The sharing economy is well and truly upon us. This is only the beginning of a seismic shift in consumer behavior that will have impacts of great proportions.