The Sharing Economy

My condo comes with two large storage spaces. I only need one, so I am able to rent out the other. This type of personal rental method is decades old – from renting a spare bedroom to a university student, providing an unused garage to protect someone’s car, being an enterprising neighbour with a rototiller digging up his neighbourhood gardens, and more.

It’s a short leap toward becoming part of what’s now known as the “sharing economy.” The sharing economy, or peer-to-peer economy, allows owners to rent out something they’re not using.

Fueled by companies such as Uber, Autoshare and Airbnb, an ever-growing number of companies are changing the way we live, work and play. The sharing economy enables individuals to obtain rides, accommodations and a wide range of other goods and services via online platforms.

Technology, together with the convenience of apps and online payment systems to handle the billing, has reduced transaction costs making sharing assets easier, cheaper and possible on a larger scale, and makes it easier to link consumers.

Online reputations

Social networks help build trust by providing an easy way to check up on people with background checks and quality assessments, and online reviews and ratings posted by both parties in the transactions.

Related: How to secure your social media and online presence

In this sharing sphere, online reputations may soon become as important as your credit history.

Upcoming complications?

This emerging model is now big enough for regulators to start assessing it. What about taxes, regulations, and personal liabilities?

Some apartment complexes are not allowing short-term rentals. Uber and Uber X are facing legal fights with disgruntled cab companies.

The sharing economy is stealing market share from traditional corporations and brands, and companies have woken up to it. Some are either buying out or collaborating with the new models.

This is a sign of its immense potential.

There’s lots available in the sharing economy

Airbnb and VRBO (Vacation Rentals by Owner): There are millions of homeowners willing to rent out a room or their entire house on a short-term rental basis.

Related: Three ways to save money on your family vacation

Uber and Uber X: This ride share service allows anyone with a car to become a temporary taxi driver. Tap the Uber X app on your smartphone and it knows exactly where you are and you can watch a clock count down the minutes until the car reaches you.

More Canadians are hiring Uber taxis and renting space through Airbnb, but this model is used in many other businesses:

• You can log into the Tool Library to temporarily borrow any tool you may never need again. Ditto the Kitchen Library for any kitchen equipment.
• Kutoto.com and askfortask.com are online marketplaces for chores.
• Share office and meeting space with ShareDesk and the HiVE. Or use a temporary office when you’re travelling through Regus.ca
• Get inexpensive private parking from roverparking.com
• Dogvacay.com allows your dog to stay in a private home with a loving family.

The fees associated with the transactions are either a one-time rental fee, or monthly or annual memberships.

Final thoughts

“We used to live in a word where there were people and there were businesses. Now we live with a third category, which is people as businesses.” Brian Chesky, Airbnb Co-founder and CEO

There is no doubt that the new sharing economy is here to stay, and will be growing in the future. A recent report by the Ontario Chamber of Commerce finds that nearly 40% of young Ontarians (aged 18-34) are consumers in the sharing economy.

Check out these stats from The Government of Canada on the impact of the sharing economy: