Sharing economy makes an impact

Why own something when you can rent or “share” it? Why not rent or “share” your own stuff to make some money?

From people renting out their homes to travelers via Airbnb, to ride-share services such as Uber or Lyft, or bike share services like Bublr bikes, the influence of the sharing economy is growing.

The sharing economy is a new way to do what people have always done for each other, according to April Rinne, a consultant and speaker on the sharing economy and a young global leader for the World Economic Forum. She will talk about the sharing economy at Marquette University’s Real Estate Strategies Conference on Thursday, Sept. 10.

“There’s nothing new about sharing,” Rinne said. “It’s as old as mankind. What’s new is technology. We can find almost anything from our smartphones.”
With the use of the Internet and GPS technology, people can rent or “share” almost anything and then both the lenders and the borrowers are rated by each other to provide information for those who want to lend to or borrow from them in the future.
The sharing economy represents a shift from 50 years of mass consumption in American society, Rinne said. Many people are looking around their homes and asking themselves, “how did I end up with so much stuff?” and realizing that ownership is often inefficient, she said.
The average car is not used 23 hours per day, Rinne said. Increasingly, she said, some consumers are asking, “Why am I paying to own a car 100 percent of the time, when I only need it 5 percent of the time?” Some consumers prefer to pay for cars only when they use them, and sometimes they want different vehicles for different purposes.
In addition to ride sharing services like Uber and Lyft, consumers can rent a car from Zipcar, a car sharing company that is a subsidiary of Avis Budget Group, or peer-to-peer car sharing services like Getaround or RelayRides.
The car sharing services cost much less than a typical car rental, Rinne said. She lets people borrow her car for $10 an hour.
Rinne said she does not worry about her car getting damaged by borrowers. The rating systems for sharing services provide borrowers an incentive to take care of what they are borrowing.
And the sharing services provide significant background on lenders that borrowers can review.
“Today, you know much more about your Lyft driver than you ever did about your taxi driver,” Rinne said.
Meanwhile, Airbnb is having a major impact on the travel industry. The website provides listings of places where travelers can find lodging. It took Airbnb only six years to have more room listings than Hilton Hotels, Rinne said.
A major challenge for the sharing economy is taxation and regulation. Lenders need to pay income tax for the money they make, Rinne said, but in some areas there is a legal gray area as to whether or not taxes must be paid for lending personal property, she said.
Government and insurance company rules and regulations are way behind the sharing economy, Rinne said.
“We’ve built our regulatory structure by and large in an ownership-based society,” she said. “We’re very, very early in the process of (sharing economy) policy reform globally. The law has never been able to keep up with innovation.”
At the MU Real Estate Strategies Conference, Rinne will talk about how the sharing economy will impact our lives, the future of business and the real estate industry.
“It will affect how people use space differently,” she said.