How Technological Advancements are Beneficial for Sharing Economy

By CIOReview | Wednesday, August 24, 2016
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Sharing economy is a business trend that thrives on collaborative consumption, enabling people to borrow or rent goods and services thus promoting monetization of assets. Previously, individuals discovered and shared such resources through word of mouth or classified ads in a local newspaper. With the latest technological advancements including the internet, pervasive computing, and mobile payments, sharing economy is breaking new frontiers as it opens new avenues of doing business. By easing the sharing of assets on a large global scale, technology today acts as the platform for ordinary people to advertise and sell their goods and services. This trend marks a significant shift from the legacy business practices that were a prerogative of full-time businesses.

Role of Technology in Sharing Economy

Fueled by IT consumerization, people today have easy access to sharing services with just one click on their mobile device. The sharing services today are supported by technologies that have the capability to maintain and process huge amounts of data regarding people and assets.

Companies today are leveraging technologies such as GPS, Big Data and Machine Learning, and other open source technology to match up owners with the renters in real-time. GPS helps service providers to get current location of the user along with the unoccupied resources in the located area; secure payment gateway helps in easy and secure money transfer between service providers and customers. Search algorithms are used by organizations to find out relevant data and then surface the listings according to the user’s query. Easy-to-use digital technologies allow people to access shared services on the go irrespective of the geographical location.

Role of Big Data

Big Data is playing a vital role in the operations of shared services by deploying an economic model that gathers different types of data for analysis and making informed decisions. The gamut of data is leveraged by companies to derive customer insights. The big data algorithm performs significant tasks of capacity calculations to find the best of the possible suggestions and helps in customer service and operational efficiency enhancements.

As reported by Airbnb, everyday 20Tb of new data is created in the company database along with the tons of already available data. Airbnb uses various big data analytics tools to create more accurate and personalized searches based on the user preferences, social connections, reviews, and rental history. Big data predictive modeling is leveraged by Airbnb to prioritize the resources based on particular market and season demands.

The concept of data economy is revolutionizing the sharing economy and companies are leveraging different data analysis techniques to design their business models. Data economy defines the data that companies consider as an asset and customers are ready to for that asset. Data analysis techniques are implemented on the large volume of collected data and later service providers utilizes the report to make sense out of that information to support decision making. Data exchange is also a very important part of sharing market. Evolution of mobile platforms revolutionized the data exchange techniques as now customers can access company applications on smartphones. Mobile apps increased the customer participation by stimulating data at a higher rate and changing frequent customer visits valuable and worthwhile.

Sharing Economy in the IoT World

Internet of Things (IoT) emerged as a future technological infrastructure for the sharing economy that can revolutionize the functioning of sharing services. IoT provides a platform by which owners can remotely connect to their resources; customers will only have a proximate access to the rented asset. Organization can access the rented fleets of assets on achieved scale by tracking and automatic unlocking. Companies built on the sharing economy model can benefit from the IoT tools that provide remote access to rented asset and assure safety. IoT will also help to decrease the trust deficit between renters and service providers.

The sharing economy has impacted various markets in that last few years, notably apartment rentals and ride services. The latest entrepreneurship ventures and recent developments in effective communication of IT provide a push to the transformation of the additional business markets with the help of sharing economy. The impact of collaborative businesses is increasing in daily life and latest technologies are providing a momentum to spread of sharing economy. The rise of sharing economy demonstrates that customers tend to value the opportunities provided by peer-to-peer engagement and the flexibility and responsiveness that companies are providing today.