If you have ever bought something at a yard sale, rented a vacation home directly from the owner, or traded your snowblower for your neighbor’s lawnmower, you are part of a collaborative economy.
Officially, this means consumers are able to get what they need from each other, rather than from a large organization. It includes swapping, borrowing, renting, sharing, giving away, or offering a service (for a fee) between two or more individuals. One has something to offer and the other has a need, and often they find each other through the Internet. Forbes magazine predicts that revenue flowing through the collaborative economy will surpass $3.5 billion, with growth exceeding 25%.
Think of Uber, Craigslist, Airbnb, vacation rentals by owner (VRBO), and one of the originals, eBay. There’s also Taskrabbit.com, which matches individuals offering services ranging from web design to dog-walking. Many of these services have online reviews from people who have used them before, and in the case of Uber, the company performs background checks on their drivers. Crowdfunding would also fall into the collaborative economy category for those looking for investors to help them start a business...or kind-hearted people to help pay off medical bills.
Sometimes all this individual collaborating can hurt established companies, such as in the cases of taxis vs. Lyft, and hotels vs. Airbnb and VRBO. Cries for more regulation are common, but in a capitalist society, competition is what it’s all about.