Economic and Social Realities of the Sharing Economy

The benefits may go well beyond your budget.

Apr 6, 2014 at 1:00PM

Thinking outside the box with personal finances has changed quite a bit in just the past decade. Think about such thinking for a minute.

Outside box, circa 2004: Plant your own vegetable garden; invest in an espresso machine instead of daily latte; ride share; brown-bag lunch; online coupons.

Outside box, 2014: Who wants to rent out my car, parking space, spare room, clothes, or brainpower?

It's hardly news to most folks that we're in the midst of a business model revolution, known as the sharing economy, which stands to benefit everyone. Thanks to the entrepreneurial mind-set brought about by recessionary hard times and technological advances, entities such as Airbnb, TaskRabbit, and Snapgoods have popped up to provide services using things people already own, whether that be a car, a home, or the clothes in their closet. In a sharing economy, anyone can become a service provider and earn extra cash as, say, a taxi service, a hotel, or a home cleaner.

Not only is it a money saver, but, as you'll see later, it's making us better people. (No, really, it's true.)

More folks are jumping on the "sharing" bandwagon as either a service provider or user, which explains why market strategists, including those at the brokerage firm ConvergEx Group, projected $3.5 billion in revenue last year with the potential to blow up to as much as $110 billion in coming years.

In a note to clients reported last year by Business Insider, ConvergEx Group stated, "Americans of every demographic are flocking to services like Airbnb, TaskRabbit, and Bag Borrow or Steal for one overwhelming reason: Renting and sharing allow us to live the life we want without spending beyond our means."

"This is just the tip of the iceberg," Philip Auerswald, associate professor of public policy at George Mason University, said this past January, as reported by The Atlantic, in explaining the sharing economy's implications at a House Committee on Small Business hearing -- the first time the U.S. Congress peered into the sharing economy. He said we're in the midst of an important shift in how people work and create value for the broader economy.

Low or no cash flow may be the main driver here, but don't discount the trendiness factor.

According to a study done by the Helsinki Institute for Information Technology, collaborative consumption "has been regarded as a mode of consumption that engages especially environmentally and ecologically conscious consumers."

The current generation who experienced the recent economic collapse can relate to those who survived the Great Depression through price and efficiency-consciousness, only folks today have the added benefit of tools connecting owners of transportation, space, and services to those who need it.

A real social network
A somewhat ironic side benefit of this trend is that the sharing economy, whose very existence is made possible by technical achievements and reliance on mobile devices that birthed online social "communities" that are anything but, is helping people truly connect in meaningful ways.

Using someone's lived-in space through Airbnb, as opposed to the typically antiseptic hotel experience, is making travel a more rich and authentic experience. Offering up an unused vehicle or even the parking space that contains it can often become the "starter drug" into a life of more environmental awareness.

Whereas so-called social communities foster the idea of people connecting while separated by devices, a sharing economy is actually connecting people, all the while helping to slim finances and turn existing resources into income.

One could take the stance that a sharing economy is bad for friendships. A recent article in Forbes theorized that people would become more likely to open up their homes and other properties to complete strangers at the expense of an out-of-town friend in need of a place to crash, which helps prove the point here.

The connectivity provided by these sharing applications allows people from different walks of life to connect who otherwise wouldn't have "shared" anything, much less a home space, pair of shoes, or lawnmower.

So the next time you consider a foray into the sharing economy, remember the benefits may go beyond your personal budget ledger.

Jim Staats is a technical support analyst at, the leading, free and secure service that helps consumers simplify and organize all of their bills and household accounts in one place online or via the four-star-plus customer-rated mobile apps. He has a bachelor's degree in industrial technology from California Polytechnic State University at San Luis Obispo. Wedged between stints supporting products at firms including Intuit and Sybase, Jim worked as a journalist reporting on real estate, business, technology and other issues for print and online publications.

More from

Boost your 2014 returns with The Motley Fool's top stock
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers