The sharing economy’s new middlemen

Mar 05, 2015Predictions

Here’s one thing I love about mobile: the Sharing Economy. Why? Because the Sharing Economy represent an opportunity to overcome rising inequalities. Instead of owning, let’s share: a pretty optimistic view of the world, I think. And the Sharing Economy is creating all sorts of opportunities for entrepreneurs, as I discuss in this article, originally published in the Harvard Business Review. (Of course, there are some risks and the freelancers and workers of the Sharing Economy are grossly underpaid right now. I’m not covering this in that particular article, but I discuss it in my book, mobilized.)

Read the original Article at Harvard Business Review

“The sharing economy is usually thought of as a way for some people to make extra cash by renting an asset they already own, such as their home or car. But today, the sharing economy is becoming professionalized – for some, it’s no longer a secondary source of income, but a primary job. As this shift has taken place, several shrewd entrepreneurs have set themselves up as middlemen – a concept once unimaginable in the sharing economy.

These middlemen are finding a market for their services as the sharing economy reaches an inflection point. In a recent survey, Nielsen found out that two out of three people are willing to participate in the sharing economy, either by sharing/renting their own assets, or by renting others’.

Who are these entrepreneurial middlemen and what business are they building? Here are three categories I find particularly compelling: the power-sharer, the power-operator, and the power-organizer.

1. The power-sharer: optimize asset selection and utilization.

In large cities, where there is lots of demand, power-sharers choose to buy assets in order to rent them to participants in the sharing economy. ConsiderBreeze. For a membership fee and a weekly fee, they’ll lease you a car you can use to fuel your own sharing economy business, whether it’s as a driver for Lyft, a shopper for Instacart, or a cleaner for Homejoy (or all three). And unlike with a traditional lease, you can cancel your car with just 2 weeks’ notice.

YardClub provides an interesting variation on the power-sharer: it lets contractors rent out their tools and equipment to a screened set of renters, while providing insurance. Members can rent equipment by the hour, using it either for their own projects, or to perform a job for another sharing economy company like TaskRabbit.

2. The power-operator: empower freelancers with insightful tools.

Many sharing economy marketplaces cater to a very large population of sharers. Often, these sharers have no idea how to run a business nor the time or desire to learn. For instance, say you move for a job and decide that rather than selling your apartment, you’ll rent it on Airbnb or HomeAway. These would-be sharers lack the tools they need to run their operation efficiently. How will they screen all the applicants and make sure the apartment is cleaned between each guest? And if they really wanted to ramp up, they’d need an inventory management system, a real-time analytics engine, an automated pricing tool, and so on.

But a few power-operators have started to offer these tools. A company likePillow will clean after each guest, or optimize price and occupancy rate in exchange for a commission on rent generated via Airbnb. For a small monthly fee per driver, ZenDrive screens would-be drivers and, once they get the job, monitors their performance.

3. The power-organizer: organize community and build trust.

One downside of the sharing economy is that each individual sharer has to learn on his or her own what works and what doesn’t. There’s no union talking about safety, no manager talking about identifying the most profitable opportunities. There is a need for communities in which sharers exchange knowledge. One example is the ride share guy, who has started to provide advice to drivers on optimizing their income from the different car sharing marketplaces. Power-organizer takes this to the next level by offering a platform to organize, curate, moderate participants in the sharing economy, both its freelance population and its customers.

The sharing economy can be a huge source of social mobility and financial wealth, powered by social networks. Before it becomes mainstream and large industry incumbents place their bets, there are opportunities for clever and ambitious entrepreneurs to capture a meaningful share of this large and fast growing market.”