If you’ve been paying attention to trends in the world of business and finance, you probably know that there has been increased interest recently in what is known as the “sharing economy.” In this setup, you make money by sharing your own resources, usually your car or your home.
According to an estimate from FlightCar, the sharing economy was worth $3.5 billion in 2013. That’s not a bad pie — if you can get a slice of it.
Participating in the Sharing Economy
Participation in the sharing economy requires a little faith in other people, and a willingness to let them into your life in some way. Here are some of the businesses and web sites that promote the sharing economy:
- Airbnb: You’ve probably heard of this web site. It’s becoming very popular because travelers can find inexpensive accommodations in others’ homes. You can allow someone to stay in your spare room while you are present in your home, or you can rent out your home or apartment while you are away. In either case, unused living space is turned into a profitable business when you rent it to others.
- Lyft, Uber: These are car sharing services. You can sign up to be a driver, and people who need rides can hire you to drive them around. It’s one way that you can take your unused time, and turn the fact that you have a car to your advantage. You get paid for giving others a lift, and they get to where they need to go. (Of course, if you are someone who needs a ride, you need to be careful; there have been stories of over-charging.)
- FlightCar: This is a relatively new service. With FlightCar you allow for your car to be used while you are gone. You get free parking at a participating airport (options are limited right now) if you agree, and someone visiting your city can use your car. You earn based on the mileage driven. Your car isn’t idle while you’re gone, and you don’t have to pay for parking.
If you want to earn a little extra money using assets that aren’t in use, the sharing economy can be one way to go about it.
Risks of Using the Sharing Economy to Make Money
Of course, if you want to make money in the sharing economy, you have to be willing to take risks. You are putting your possessions at risk in these cases. If you rent out your house on a site like Airbnb, there is a chance that it will be trashed by whoever is staying there. Your valuables might be stolen.
It’s a little bit harder for your property to be damaged when you give rides through Lyft and Uber, since you are present. However, the distractions that can come in such a situation could put you at risk for car accidents. Your car is at greater risk when you participate in something like FlightCar. While many of these sites put in some protections that can help prevent theft and allow for compensation for damage, it’s not full-proof and you are risking your assets.
Another consideration is the safety of your person. If someone stays at your home or apartment, or if you drive someone around, you are opening yourself to a stranger. What happens if he or she turns out to be violent and dangerous?
Proper vetting of others can help you reduce the chances, but you still have to be aware of the risk, and understand the possibilities. You also have to consider whether this is allowed under the terms of your homeowners, renters, or auto insurance policy – not to mention whether it is legal in your city or state.
The sharing economy is an interesting new way for people to use what they already have to make money — no particular skill needed. What do you think? Have you participated in the sharing economy? Would you participate?