It's not just nice to share. It's changing how we do business.
From bike shares to spare couches, from swapping clothes to trading tools, the sharing economy has picked up steam in the past five years. Some trend watchers point to Millennials
as the source of the national uptick. Others say that a renewed interest in all things green as well as a new brand of thriftiness that started in the recession has led to the growth in collaborative consumption.
Whatever the reason, entrepreneurs are — somewhat ironically — eager to make money from the movement that encourages Americans to consume less. And in the process, these new companies create micro-entrepreneurs who hop on board to sell their unused parking space on Parking Panda; their power tools on GoodShuffle; or, their Chanel handbag on Snobswap.
, the site that matches travelers with empty couches or beds in their destinations, is often held up as the "granddaddy" of the sharing economy movement. Founded in 2008 by three roommates in San Francisco, Airbnb’s reach is literally everywhere — more than nine million people have used its services and its business model has spawned many copycats.
While the sharing economy is exciting in terms of development and innovation, it has presented issues for regulators. Airbnb faces ongoing legal issues in New York
, and the e-hail taxi alternative Uber very publicly battled
the D.C. Taxicab Commission. Some Maryland officials contend
that rideshare service Lyft and taxi alternative Uber are ignoring regulations that govern car-for-hire services.
It’s too early to see get a clear sense of the effect the sharing economy will have in the long run, though some are trying
. Most companies are still in the startup stage. In spite of the legal and regulatory hurdles facing some companies, entrepreneurs are still finding ways to capitalize on the sharing economy. And one of them might just be the next Airbnb.
Making Space in Baltimore
Cars have been at the forefront of the sharing economy since car-sharing services like Zipcar launched. Then there’s Parking Panda
, perhaps Baltimore’s most successful sharing-economy startup.
Nick Miller and Adam Zilberbaum launched Baltimore in 2011 as a matchmaker app for empty parking spaces and drivers who need places to park. Initially, the company used a peer-to-peer model, allowing people to sell driveway space. Now it’s grown to include unused spaces in privately owned garages in more than 25 cities across the U.S. It has also raised $4.7 million in equity financing and moved into a 3,800-square-foot office in Federal Hill this year.
"Parking is a pain point for everyone," Miller explains. "We solve a problem that so many people have."
From the driver's perspective, the process is a simple one. Bridget is running late and needs a spot close to the downtown office where she has an interview. She visits Parking Panda and creates an account or connects her Facebook account. She fills in the address and Parking Panda pulls up a list of available spots in map and list form. Each spot comes with a price tag attached, and clicking on one reveals the specifics. Bridget picks the one closest to her meeting, clicks a button and receives confirmation of her reservation.
When she arrives, all she needs is a confirmation code. No circling, no scrounging for change, no stress.
Parking Panda typically takes percentage-based commission. It’s a fee that its partners, including large sports arenas, convention centers and theater operators, seem willing to pay. The company has experienced steady growth over the past two years. It employs 18, up from two when it launched.
Being Neighborly in D.C.
It only took about 50 years, but someone finally found a way to monetize Herb borrowing Dagwood's garden tools. GoodShuffle
is a startup in the peer-to-peer sphere that launched in Washington, D.C., this year. Built by entrepreneurs Erik Dreyer and Andrew Garcia, the firm helps users make money from unused tools, equipment that's lying around in their closets by lending it to their neighbors for a small fee.
The concept is simple enough. Dagwood has a power drill he's not using, so he posts it on GoodShuffle and sets two prices—a daily rental fee and a deposit (usually equal to the cost of replacing the item). Herb, who is sick of hearing about the broken porch railing from Tootsie, knows he needs a power drill to get the job done. Rather than spend the time and money researching and purchasing a power drill that will likely sit in his closet or garage once he finally makes the repair, Herb hops on GoodShuffle.
He finds a plethora of power drills to choose from. He chooses Dagwood's drill, and the shuffle begins, with Dreyer and Garcia's platform holding the rental and deposit fees until the exchanges are made and the drill is returned. GoodShuffle keeps 5 percent of the owner's cut of each transaction.
"Our vision is to foster the local economy by putting things you own but you don't use very often [to work for you],” Dreyer says. In the process, he continues, GoodShufflers become micro-entrepreneurs, contributing to a sharing economy that’s a force to be reckoned with.
Swapping Closets, Searching for Chanel
The trendy thrift store and old-fashioned clothes swap have moved online. For Snobswap
co-founder Elise Whang, the genesis of her piece of the sharing economy started with a Chanel handbag.
"I was pregnant with our first child and looking for a used Chanel," she explains. "I didn't want the guilt of spending money on a luxury bag – but I also didn't want to feel like I was shopping at a garage sale."
Whang and her sister, Emily Dang, used to hit consignment sales together. When Dang moved away, Whang missed her companionship, as well as her closet. "I thought, 'Wouldn't it be great if we could have virtual closets, so I could swap with her?'" That’s how the two founded Snobswap in April 2012.
Snobswap shoppers create virtual closets online that they fill with "pre-loved" items. The list of items on the site grows daily and includes clothing, bags, shoes and accessories for men, women and children. Swappers can search by designer or by type of item, and narrow by price and color. They don't have to "swap," either. They can purchase items outright, or make offers on items in others' closets they like.
Swaps on the site are free for buyers. Sales generate a 10 percent commission, which covers transaction costs. For busy swappers who don't have time to take pictures of their items and list them in the system, Snobswap offers a Closet Concierge at a 30 percent commission. "It's for people who are too busy to list their own clothes. A lot of people say they would use our service but don't have time to list their items."
The company was built in Washington, D.C., but has generated national interest due to its virtual format and strategic partnerships with upscale consignment boutiques in cities across the country, including Los Angeles, San Francisco, D.C. and St. Louis. Giving fashionistas the ability to shop and sell consignment online—and become micro-entrepreneurs in the process—has generated a groundswell of interest.
Allyson Jacob is a writer originally hailing from Cincinnati, Ohio, and is the Innovation and Job News editor for sister publication Elevation DC. Her work has been featured in The Cincinnati Enquirer and Cincinnati CityBeat.