The new buzzword these days is the sharing economy. But what is it? It is an economic arrangement where owners rent goods they are not using or provide services to a stranger. The sharing economy is also referred to as the collaborative consumption or peer economy.
The business model is based on using technology, most often a smartphone app, to arrange for the rental or service. Today anyone with a smartphone can hire a driver, borrow a car or bicycle, rent a Kitchen-Aid mixer, reserve a room in someone’s private home for vacation or hire a handyman. Cash is rarely exchanged. Rather the purchase takes place through a payment portal like PayPal or direct credit card billing through the app.
In the old days, a potential consumer connected with sellers and service providers using a posting on a local bulletin board, listing in the Yellow Pages, or an ad in a newspaper or magazine. Now the sharing economy gives consumers the ability to search and pay for goods and services using technology like a smartphone app.
The "sharing economy" apps include Uber, Airbnb, Rideshare, Lyft, DogVacay and TaskRabbit with many more being created every week.
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