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The Sharing Economy

Updated on March 23, 2020 Updated on March 23, 2020
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"Talent is always conscious of its own abundance and does not object to sharing." —Aleksandr Solzhenitsyn

The sharing economy is defined as owners renting out things they aren’t using, homes, cars, cameras. Can you benefit from the sharing economy?

Most of us were taught to share as toddlers. Some enterprising people have taken the lesson and turned it into a business or at least into a nice bit of side income. The sharing economy is estimated to be worth $26 billion and 7% of US adults are working within it.

What Can You Share?

Almost anything you can imagine. Homes, thanks to Airbnb, are probably the best known item in the sharing economy. Through them you can rent out your home to vacationers. But the model has been used for everything from bicycles to kitchenware.

Do you like puppies? Of course you do. What kind of monster doesn’t. You can sign yourself up to DogVacay and dog sit for people. If you have a puppy friend and are going on vacation, you can board your doggy in someone’s home or your own for less than it would cost for a kennel and with more one on one attention for your pet.

Hate chores? You can outsource them to Zaarly. You can hire someone to do everything from cleaning the house to painting to yard work. All transactions are handled through the site.

Planning to travel and need wi-fi? Fon has you covered. Through Fon you share your wi-fi and get access to the wi-fi of others when you are not home.  Fon claims to be the biggest wi-fi network in the world with over 14 million hotspots.

Need a car for a few hours? Zipcar allows you to borrow a car for a membership fee of $7 a month and a cost of $8-10 an hour. Makes those trips to Costco or jaunts to the Hamptons easy and affordable.

Sharing office space is gaining momentum in the sharing economy. A lot of small businesses start to out grow their founder’s apartment but the business isn’t yet big or profitable enough to rent an office and kit it out with all the usual office stuff, computers, copiers, scanners, faxes (if anyone still uses those), Keurig machines.

There are more and more shared offices popping up. They will come fully equipped with everything you need, including conference rooms, so your only investment is the space. And when problems come up, computer or copier problems for example, it’s not your problem. Just like if you worked for a big company, there is IT support to get things up and running again. And it cuts down on the weird hermit-like behavior that can set in when you’ve been working from home for too long!

Mostly because it saves money. It’s expensive and not very necessary to have a car if you live in a city with good public transportation. But sometimes you need a car or having access to one would just make life easier. Something like Zipcar gives you the convenience of a car without the expense.

Renting a home for a vacation like you can with Airbnb has a lot of advantages over a hotel, not least of which is the cost. You will have more room and a kitchen. Eating out for three meals a day for a week or more gets tedious, not to mention expensive, no matter how delicious the local restaurant scene. It also allows you to feel like a “temporary local” rather than just another tourist.

It saves room. If you are living in an apartment you don’t have a garage, basement and attic to store all sorts of things that you need infrequently like extra tables and chairs for parties, camera equipment you only use while on vacation somewhere photo worthy, extra glasses and flat ware for hosting holidays. You can rent all that stuff in the sharing economy and then give it back rather than having to find room for it.

There sharing economy can also be green. Rather than buying stuff that has to be shipped to a store and packaged in all kinds of plastic and cardboard, you can rent someone else’s already existing stuff.

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How It Benefits Workers

A big draw for people in the sharing economy is the flexibility and autonomy it allows. It’s great for people whom for whatever reason, can’t work a conventional 9-5 job, stay at home parents, people in college, retirees.

It’s also good for those who do work a regular job and want to make some extra money but not so much that they’re willing to give up several evenings or every weekend. They can work when they want.

A sharing economy job can also be the difference between staying solvent and sinking into credit card debt while unemployed and between regular jobs.

It can also help those who can’t get a small business loan, start their own business. Airbnb reports that 10,000 of their hosts have used the income to support themselves while getting their business off the ground.

Where It’s Lacking

The sharing economy does have some problems. Because most of the employees are classified independent contractors there isn’t much employee protection and there are generally no benefits like health insurance or sick days.

It also doesn’t always provide steady income. Great if you’re looking to make some extra cash to pay off debt or take a vacation, not so ideal to pay your rent and bills.

These are problems that are have so far not been addressed but there sharing economy is fairly new. As it grows, there will be more protections put in place for workers. Task Rabbit has already instituted a minimum wage for its taskers of $11.20 per hour which is higher than most hourly minimum wages throughout the country.

So if you’re looking to make some extra money, check out the sharing economy. For that purpose I think the benefits outweigh the draw backs. And if you’re on the user side of the equation, joining the sharing economy can save you time, space, effort and money.

Candice Elliott - Senior Editor
Candice Elliott is a substantial contributor to Listen Money Matters. She has been a personal finance writer since 2013 and has written extensively on student loan debt, investing, and credit. She has successfully navigated these areas in her own life and knows how to help others do the same. Candice has answered thousands of questions from the LMM community and spent countless hours doing research for hundreds of personal finance articles. She happily calls New Orleans, Louisiana home-the most fun city in the world.

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