The Neyland Report
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IF there is one economic paradigm shift that has defined the early part of the 21st century, it has to be the “sharing economy.” The term is used to describe a collection of businesses and online platforms that allow consumers to use certain products and services provided by other consumers who share their assets for a fee. Think AirBnb and Uber.

For those who believe the sharing economy is simply a “fly by night” trend, consider this: BCG  Henderson Institute, a Boston think tank, reports that an estimated $24 billion in venture capital has been invested into the sharing economy since 2010. Further, AirBnB, the big daddy of all of the short term property rental companies, is now valued at $31 billion. And there’s more: Uber, now valued at $72 billion, has three times as many cars on the New York City streets than there are yellow cabs. Something big is happening.

Here in Baton Rouge, the Gotcha bike-sharing program launched in July, with 500 electric pedal-assist bikes available at 50 mobility hubs city and on the campuses of LSU and Southern University. . Users pay a $2 initial rental fee and then 10 cents per minute. Riders use Gotcha’s mobile app to pick up a bike from designated hubs. After the riders get to their destination, they will return the bike to another hub. 

The greatest beneficiaries of this sweeping economic boon are average consumers. When hotel prices in a major destination city like New Orleans skyrocket during heavy convention or tourist periods, visitors have a selection of several thousand short term rental houses, condos, apartments and rooms throughout the city. These properties often rent for far less than hotels. Since owners of these properties do not have the overhead expenses that hotels have, and usually no labor cost, they are able to rent for far less. As for the security of your purchase, no money is transacted personally between the customer and the provider. All financial transactions are handled via the app.

The sharing economy has changed the face of travel. If you can simply download an app on your smartphone, search for available properties and reserve online, one selling point is simplicity. If you can save the cost of a rental car by using the Uber app on your phone to order a car that usually arrives within just minutes, the savings multiply.

The sharing economy is also changing the employment landscape in America. A substantial percentage of the millennial generation (age 23 to 38) choose to make their living as part of the sharing economy. That leads to more job openings that may be filled by older workers, a population group that often previously met resistance from some employers. Further, retired seniors with the time to travel are able to do so at reduced costs. Other retired seniors have found ways to supplement their income, often by providing short term rentals.

Insider’s tip: Before committing to your transaction, read other customer reviews. Only those who have actually used the product or service are able to leave a review, so you are able to get a true account of what you are purchasing. Also, carefully read your options, including payment plans and requirements, cancellation policies, refund policies and “house rules” for property rentals. The sharing economy excels in providing information for potential customers.

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