The term sharing economy is widely perceived as a synonym of “collaborative economy” or “on demand economy”, but it actually represents a very wide concept which lacks a common definition. Rachel Botsman defines the collaborative economy as “a system that activates the untapped value of all kinds of assets through models and marketplaces that enable greater efficiency and access ”. The concept behind the sharing economy is indeed very simple: anything that is not being used can be rented out. This framework includes services such as renting, bartering, loaning, gifting, and swapping of underutilized material or immaterial possessions. These idle resources are useful to create an efficient circular system by reallocating or trading them with people who want or need them. Recycling, upcycling and sharing the lifecycle of products are common features of the sharing economy. “Waste” is the result of a misallocation of resources: today technology often allows us to easily correct that misallocation, by redistributing or trading a great variety of “sleeping” assets and resources (table 1). For instance, Uber and AirBnb platforms allow customers to share cars and homes, while TaskRabbit connects people with free time with people who need someone to perform small tasks.

1. By Andrea Silvello
The term sharing economy is widely perceived as a synonym of “collaborative economy” or “on demand economy”,
but it actually represents a very wide concept which lacks a common definition.
Rachel Botsman defines the collaborative economy as “a system that activates the untapped value of all kinds of
assets through models and marketplaces that enable greater efficiency and access1
”. The concept behind the sharing
economy is indeed very simple: anything that is not being used can be rented out. This framework includes services
such as renting, bartering, loaning, gifting, and swapping of underutilized material or immaterial possessions. These
idle resources are useful to create an efficient circular system by reallocating or trading them with people who want
or need them. Recycling, upcycling and sharing the lifecycle of products are common features of the sharing
economy. “Waste” is the result of a misallocation of resources: today technology often allows us to easily correct
that misallocation, by redistributing or trading a great variety of “sleeping” assets and resources (table 1). For
instance, Uber and AirBnb platforms allow customers to share cars and homes, while TaskRabbit connects people
with free time with people who need someone to perform small tasks.
1
Rachel Botsman, What’s Mine is Yours: How Collaborative Consumption is Changing the Way We Live
Table 1 – assests and actors in the Sharing Economy
Asset Kind of asset Actor
Tangible
Financial
Intangible
Automotive
Property
Food
Crowdfunding
Lending
Professional
Personal
Uber
AirBnB
Talent Garden
Cookening
Lending Club
Kickstarter
RocketHub
TaskRabbit
Tint Travel
Reoose

2. Technology is an important driver. Almost all sharing economy services use online platforms, keeping low fixed costs
while providing access to a huge base of customers. The central role of smartphones in modern consumerism makes
on-demand sharing economy services even easier to access, for example through the creation of two-sided market
platforms, thus enabling local and global peer to peer communication. Furthermore, big data analytics and
advanced algorithms are now used to match supply and demand and to set prices: for example, Uber takes
advantage of its vast database to predict where and at what time a customer will need a ride.
Collaborative consumption contemplates a variety of forms of exchange, incentives and value creation, not only in a
purely financial perspective but also from an environmental and social responsability point of view. Sharing economy
fosters a more efficient use of resources, relying both on material and nonmaterial (or social) rewards while
inevitably raising accountability, security and trust issues - frequent weaknesses of any digital platform dealing with
sensitive data. Accountability issues are more relevant for those businesses that act as intermediaries in two-party
transactions: AirBnB , for instance, has often failed to take full responsibility for any material damage caused to
apartments rented by their users. Since companies will want to stay clear of such unexpected events, issues about
insurance coverage will also emerge. Sharing economy users might as well expect problems with calculating their
taxes correctly : for example, low income taxpayers entitled to benefits or tax credits might even lose them, when
reporting revenues from “task-sharing” services.
The sharing economy is currently the talk of the town. According to compareandshare.com2
, it is growing faster than
Facebook, Google and Yahoo combined: PWC3
estimates that the sharing economy sector generated 15 billion $ in
global revenues in its first seven years, compared to the combined growth of the three giants, 11 billion $ in the
same range of time. PWC again, estimates that the sharing economy has a potential revenue opportunity worth 335
billion $ by 2025. During that period, the collaborative economy sectors are likely to grow much more quickly than
traditional rental sectors. For instance peer to peer accommodation, car sharing and music & video streaming should
grow at a two digit rate from 2013 to 2025, contrary to B&B & hostels, car rental and DVD rental which will grow at a
very low rate over the same period. The least developed sectors today, peer to peer finance and online staffing,
could grow at the fastest rate out of all the other traditional or sharing economy sectors.
2
http://www.compareandshare.com/blog/did-you-know-that-the-sharing-economy-is-growing-faster-than-facebook-google-
and-yahoo-combined/
3
PWC, The sharing economy – sizing the revenue opportunity, 2015
Sharing Economy Sector
Traditional Rental Sector
Sharing Economy Sector
Traditional Rental Sector
2013 202515 B$ 240 B$ 335 B$335 B$
Sharing Economy and Traditional Rental Sectors growth
Source: PWC

3. Given the growth expectancy of the sharing economy, investments in it are booming with 28 million $ a day invested
in startups4
, where 37% of them are VC funded. With the new means of raising money, such as crowdfunding,
finance became more democratic: in fact 80% of sharing economy startups see crowdfunding as the best way to
raise capital. Sharing economy startups primarily base their business on apps and try to reach their customers online.
In fact, consumers tend to automatically check the app store by searching a company’s name or product or service
type. In 2013, on-demand mobile startups raised 670 million $ and just a year later, funding ballooned to more than
4 billion $ in 2014. The funding explosion has continued through 2015 as giant funding rounds, including Uber and
Lyft, have raised funding in the first four months of 2015 to 3.8 billion $. Excluding Uber’s juggernaut funding rounds,
on-demand startups have raised 3.9 billion $ since the start of 20105
.
Everyone can participate in the Sharing Economy: individuals, communities, companies, organizations and
associations. All these actors can be embedded in a highly efficient sharing system where they all contribute and
benefit from. The fact is that people will always consume and what is changing is the value they assign to the “act of
possession” and the role they wish to play within this system. This role is already an established habit in the native
4
http://www.compareandshare.com/blog/did-you-know-that-the-sharing-economy-is-growing-faster-than-facebook-google-
and-yahoo-combined/
5
CB Insights
Sharing Economy and Traditional Rental Sectors CAGR 2013-2025
4% 2%
-5%
Car rental
3%
Book rental
63%
17%
Music &
Video
Streaming
P2P lending Car sharingP2P
accommodation
37%
5%
B&B and
hostels
23%
31%
DVD rentalEquipment
rental
Online
staffing
Sharing Economy sectors
Traditional Rental sectors
Source: PWC
349 366 414
985258
43
2
2012
371
2011
5
2,800
2,401
392
2010
57
55
2014
4,124
1,723
2013
672
2015
3,785Funding minus Uber
Uber funding
On demand mobile services financing trends - USA
Data in M$
Source: CB Insights

4. digital generations. Millennials are guiding the other generations towards embracing and experimenting new sharing
formats, but members of every generation are starting to have a more active and mindful approach to
consumption6
. A study from Havas Worldwide reveals that 28% of population shares globally, and 68% of adults in
the world are willing to share or rent goods for money- a participation rate that is estimated to double in the next
year7
.
It is important to remember that many of the transactions that take place in a sharing economy framework are
actually not captured by official statistics due to the nature of the exchanged goods and services. Furthermore, it is
hard to determine if the surge of sharing economy businesses is caused by the overwhelming importance that digital
platforms are gaining in the current global landscape, or vice versa. What we know for sure is that sharing economy
has permanently changed our approach to services consumption: in the years to come, further technological
advancements will shape new revolutionary business models, just as digital platforms are allowing us to efficiently
reallocate our resources.
Andrea Silvello is Founder and Managing Director of Business Support Spa, a Strategy Consulting & Financial Advisory
"boutique" which focuses on SME's in Italy.
6
Nielsen, Global share community report, 2014
7
Havas Worldwide, The new consumer and the Sharing Economy, 2014
Share community global participation willingness
35%
17%
Generation
X (35-49)
7%
Generation Z
(under 20)
Millenials
(21-34)
Total adults
7%
1%
32%
Silent
Generation
(65+)
Baby Boomers
(50-64)
Willing to shareNon willing
to share
100%
68%
Source: Nielsen