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Sharing economy shares assets and business opportunities

One of the most disruptive business trends of recent years is growing at an alarming rate. It's called the sharing economy, or collaborative consumption. The premise is pretty simple: use digital technology to reap the advantages of ownership without actually owning something, or to become a micro-entrepreneur without any investment costs.

One of the most disruptive business trends of recent years is growing at an alarming rate. It's called the sharing economy, or collaborative consumption. The premise is pretty simple: use digital technology to reap the advantages of ownership without actually owning something, or to become a micro-entrepreneur without any investment costs.

“New digital media technologies make it so much easier to find people who have stuff and connect them with people who want stuff,” said David Van Seters, president and CEO of Vancouver's Sustainability Ventures.

The secret sauce is “double trust” – where buyers and sellers are rated (think eBay) and blacklisted if they can't be trusted.

Four-year-old ride-sharing software provider Uber raised US$1.2 billion from investors last month, valuing the company at US$1.7 billion. This is more than Hertz and Avis Budget. On the hospitality side, Airbnb can lay claim to being the world's largest “hotel” chain even though it doesn't own a single hotel.

When its CEO heard that Marriott was about to add 30,000 rooms over the next year, he boasted that Airbnb will add that many in two weeks.

This new model is jumping because it delivers three desirable benefits. Pick one and you get the other two for free.

On the economic side, it mobilizes stranded assets and creates new revenue streams. Instead of a car sitting idle 22 hours a day and operating at 20% capacity when it's moving, a shared car is on the move 24-7. Anyone who owns something can become a micro-entrepreneur. Consumers can get improved service at reduced costs.

From an environmental point of view, it reduces waste.

And from a community point of view, sharing deepens social and personal connections. The city of Seoul, Korea, has declared itself a “sharing city” in part because it wants to reduce household debt and garbage, but also because it wants to connect its growing number of isolated seniors and reduce their soaring suicide rates.

Make no mistake: this is a disruptive model for the consumer economy. Uber CEO Travis Kalanick says his company's mission is to “enable a transportation alternative in cities that makes car ownership a thing of the past.”

“When people are sharing more, they're consuming less,” noted Chris Diplock, founder of the two-year-old Vancouver Tool Library.

Diplock led The Sharing Project study, financed by Vancity, Modo, the City of Vancouver and the Vancouver Foundation, to look at Vancouver's sharing potential.

Aside from long-running enterprises like Modo, the car-share co-op believed to be the leading Vancouver-based sharing business, organizations like the Strathcona Business Improvement Association (SBIA) are jumping in. It has started the Resource Exchange, a place where businesses like carpet distributor Colin Campbell & Sons can send discontinued carpet samples for reuse. This is part of a wider initiative involving the Real Estate Foundation of BC, Lighthouse, Recycling Alternative and the City of Vancouver to “transform the False Creek Flats industrial area to a hub of sustainable and efficient businesses.”

This transformation isn't without its bumps. Uber is facing legal challenges from the taxi industry, which rightfully claims that Uber is running an unlicensed taxi service. Airbnb is facing similar pushback from the hotel industry.

“The sharing economy needs to be managed. It will have problems in a completely laissez-faire mode,” cautioned Van Seters.

Even so, businesses would do well to follow the lead of entrepreneurs like Rob Safrata, owner of Novex Couriers, who launched Zipments here, enabling anyone driving with space in his or her car to become a temporary courier.

Van Seter's advice?

“Ask yourself: where does my business have wasted assets that could be turned into dollars?”