Tag Archives: sharing economy

Is on-demand the new normal?

Times are really a-changing. Today’s sharing economy is evolving into something new and we are seeing the rise of the on-demand economy. Defined “as the economic activity created by technology companies that fulfil consumer demand via the immediate provisioning of goods and services”, the on-demand economy is rapidly altering consumer behavior and challenging traditional businesses. Thanks to the ubiquitous smartphone, instant gratification has become the norm. One can now shop at a push of a button, summon a driver at a moment’s notice, order restaurant food, and have anything delivered anywhere instantly. According to experts, over $9 billion has been invested in the space since 2010 and more investors are eagerly jumping in, encouraged by the growing popularity of the business model and profits that are already being realized. This week alone, on-demand startups like Goodservice, Zoom2U, and Postmates all received funding from investors while WeDeliver was acquired by Deliv. With investors bullish on the on-demand space, we expect to see continued growth in this sector in the coming months.

‘Tis the Season for Gifting


In the collaborative economy, there’s a subset called the gifting economy, a mode of exchange where things are not sold but given. In simplest form, it’s the arrangement for the exchange of goods or services without expecting anything in the return. It’s a concept that’s slowly catching on. In the US, Philadelphia-based web designer Adrian Hoppel made news when he stopped charging his clients and instead began to operate within the “gift economy.” This means payments are based on mutual respect and trust: Adrian builds quality websites for his clients and they in return pay him an amount they believe is fair. Trust, not money, became the medium of exchange. UK-based model Lily Cohen set up a non-profit called Impossible.com, a website and app that ¬†encourage people to do things for others for free. The site urges people to post wishes of things they need help with and in exchange, offer what they can give. The goal is to create a community that encourages giving and receiving. Gifting may not fix the problems of capitalism but it may help build a sense of community, where wealth and services are shared, and good deeds are passed from one person to the next.

The sharing economy boom


In today’s collaborative economy, anything can be shared. From rides to tools, from rooms to home-cooked meals, anything that is worth sharing is now being shared and the surprising thing is, the market is responding positively. Thanks to the recession, today, hundreds of people have realised the value of collaboration and relied on peer-to-peer services to earn or save extra money. Social media and mobile technology have enabled the sharing economy and helped turn startups like Uber and Airbnb into billion dollar businesses. The success of these companies has inspired many startups to aspire to be the next big thing. One of these companies is Rent the Runway. What makes Rent the Runway exceptional is it’s known for being reliable and for its mammoth collection of expensive designer clothes and fashion accessories. The New York-based company boasts that it rents as many as 65,000 dresses, 25,000 earrings, bracelets and necklaces every single day to more than five million members. A $3,000 designer gown can be rented for as low as $70 on the site. Some clothes can go as low as $30 per rental. With very affordable rates, how couldn’t Rent the Runway have a five million customer base? The company recently announced a $60 million round of Series D funding led by Technology Crossover Ventures, with participation from Bain Capital Ventures, Highland Capital Partners, and Advance Publications, Inc. The latest investment brings the company’s total funding to $114.4 million.

Weekly Featured Company: Airbnb

Founded Headquarters Sector Employees Revenue Total Investment Recent Investment
2007 San Francisco, California Transactions 1,001-5,000  $250M $794.8M $475M
True disruption
Airbnb has created a brilliant business model that eventually became a disruptive force in the hospitality industry, changing the way people book accommodations and questioned existing laws and regulations. According to TechCrunch, Airbnb has more than 11 million guests stay since being launched in 2007. And while some cities have tried to ban Airbnb, most have chosen a smarter option: tax and license all operators under Airbnb. What makes the company truly disruptive is it’s the only one that has challenged local hospitality rules and regulations, bringing to light some flaws in the system. By virtue of its revenue, Airbnb has been a darling of investors and has raised $794.8 Million since 2009 and is now valued at around $10 billion. The success of Airbnb only means that times are indeed a-changing. As the economy continues to flounder and spendable income continues to shrink, businesses in the sharing economy will continue to thrive.