The shared economy: what’s in it for you?
In June the number of Airbnb rooms or homes for rent in Australia stood at over 115,000, with the number of people opening up their properties to strangers only continuing to rise. In December the room count was 87,000, now nearly a fifth of all Australians over 18 have an account with the company.
Another big name in the collaborative economy, ride sharing company Uber (which launched in Australia in April 2014) claimed 54,000 Australian drivers at the start of the year, with 2.4 million using the app.
A Deloitte review calculated the share (or sharing/peer-to-peer) economy in NSW alone to have increased 68 per cent last year to $2.6 billion. The number of people in the state earning income this way more than doubled to 92,400.
The concept – which involves leasing various kinds of idle capacity to others, using a third party’s online platform whose owner takes a cut – is surging in popularity.
There is a growing number of companies looking to provide these sharing platforms through the next “Uber of...” This April The Sharing Hub, a Sydney-based accelerator for shared economy ventures, launched this sector’s growth. The group already has more than 30 members, according to co-founder and entrepreneur Mike Rosenbaum, who is also co-founder of Spacer, a marketplace for storage space.
Rosenbaum fell in love with the share economy during a six-month sabbatical in Silicon Valley, following his exit from DealsDirect, which he also co-founded.
“Whether it’s pet sitting like Mad Paws, car sharing companies like Car Next Door, or caravan sharing companies like Camplify, we’re all solving a similar problem, which is matching supply and demand,” he explains.
“So we’re trying to match underutilised assets, underutilised services that are dormant around us with a need.”
The appeal of access over ownership is easy to understand.
The most obvious is in cost saving. There’s also convenience. Environmental impact is lessened. And then there is the social aspect of dealing with an individual rather than a corporation. For those who opt for an Airbnb room on holidays, it can be common to share a drink and an informal conversation with a host, which is rarely the case at a hotel.
The first step to making extra money through the shared economy is identifying what you have a surplus of. What aren’t you currently using? It could be space, a car, a parking spot, a caravan or even a willingness to walk a stranger’s dogs.
More and more people are “multi-apping” in a variety of different areas where it makes sense to, says Rosenbaum.
“They might share some of their time, using a platform like Better Caring to help care for an elderly person for a few hours a week. They might rent out their garage on a platform like Spacer and earn $300 a month,” he added.
“They might do some parcel delivery on the way home from work using Zoom2U and earn a few hundred dollars a week. They might pet sit a couple of pets and earn $100 on a weekend… I guess they’ve got to tap into what their strengths and interests are and where they have assets.”
Earnings from peer-to-peer exchanges might move from being a hobby to a business, meaning tax and reporting obligations. A checklist at the Australian Taxation Office gives guidance on whether or not that line might’ve been crossed. The ATO has announced that it will apply data-matching to 650 million records from third-party sources to catch those not declaring income, and is taking the issue very seriously.
For those wanting to join the shared economy by developing a new platform, Rosenbaum advises that you need to figure out whether or not the problem is actually addressable by the shared economy and determine if the market is large enough.
“If you’re talking about car sharing – there’s more than 10 million cars on the road, so the potential is enormous,” he said.
“For caravans, there’s over half a million of them in Australian, so again, there’s a huge opportunity. But if you go for something very niche, I don’t know, say, sharing children’s books, it might be a lovely idea, but it may not be commercially viable.”