If you are an Uber passenger or a frequent user of Airbnb, then consider yourself a key player in the collaborative economy, also known as access economy. Such kind of business arrangement is mainly driven by peer-to-peer online marketplaces, based on a hybrid market model that involves mutual use of and access to a wide range of goods and services. Collaborative consumption has particularly gained prominence in the past few years, alongside the popularity of smartphones and similar Internet-enabled mobile devices.
The premise of access economy is pretty simple: a person in need of a particular service or product (such as a car ride, place to stay overnight, or a DSLR camera) can rent or borrow (for a fee) it from another person who already has it. The transaction happens in a digital marketplace similar to eBay, and participants from both parties can rate each other to foster trust and maintain quality service. The digital marketplace company serves as a broker or middleman in facilitating the transaction and earns by taking a small cut in the total amount of money involved in the delivery of the service or product. The ubiquity of mobile tech and the Internet made it possible for such businesses to thrive.
Majority of participants who provide the service or product in this type of business are freelancers, independent contractors, or on-call workers, as opposed to being full-time employees. This makes it very attractive and manageable, as everyone can do it on their own time using their own resources. Customers, meanwhile, can conveniently access the service on-demand and can be more cost-effective than using existing conventional counterparts. Airbnb, for example, allows a vacationer to rent out an entire home for a price similar to that of a small luxury hotel room.
Access economy is still very young as an industry and is largely unregulated. While it offers great opportunities for both asset owners and borrowers, the full extent of its social, legal, and economic viability is still unknown. Sustainability is another issue, but some analysts are pretty optimistic of its future. Nevertheless, access economy gave rise to some of the world’s fastest growing tech startups and is seen as an important milestone in innovation economics.