What Is The Collaborative Economy for Events
A new wave of startup companies are disrupting traditional business models. Companies like Uber, Airbnb, Rover, and a slew of others are allowing people to share spaces, resources, services or goods to save money or make extra money. These platforms connect the supply and the demand aspects of a social, sharing economy. People are continually looking for ways to stretch their budgets or supplement said budget with extra income. These collaborative businesses are taking off, but the question remains: Is the sharing economy applicable to the events industry?
The Roots of the Sharing Economy
While some think the collaborative economy is a new trend coming out of the tech boom, it actually has its roots in a lot of companies and organizations that have been around for years. One of the earliest examples of the sharing economy is libraries; which we all know have been around for centuries.
The main idea is to save money and avoid commercial outlets to drive a more unique experience. EBay and Amazon both have roots of their business in the sharing economy. Companies like these originated from the idea of people sharing and selling underutilized items online for cash. Clothing resale companies like Plato’s Closet began to grow during the recession to allow people to sell clothes or purchase them at a lower price than other retailers. Carpooling and renting extra space were also at the root of the sharing economy prior to the availability of an online platform; both websites and social media.
Internet and Social Media as a Catalyst for Sharing
The internet has acted as a catalyst for the collaborative economy and has accelerated its role in everyday life. Multiple generations and countries have access to the internet and interact in digital communities. The sharing economy was created to provide affordable options, cut costs, and generate profits.
The system works because it creates positive balance of trade when underutilized assets are shared among people. Supply and demand is driven by the benefits that both the supplier and consumer experience. These new business models could change the way event planners organize their events and the hospitality associated with it.
Foundation of Sharing Mentality on the Internet: 5 Categories
The internet has created a sense of community among users connecting and engaging people throughout the world. People are trusting strangers and communicating with each other for reviews, opinions, help, or services.
A report from collaborativeeconomy.com creates broad categories for the development of the sharing economy. Five categories have contributed to the foundation of trust and interaction between people on the internet. All five categories work together with innovation of new technologies and evolving consumer demands to create the market for sharing platforms.
1. File Sharing
This was the beginning of making access to digital assets available to the public. Instead of owning the digital assets, it was a library compiled by volunteers. While it was usually done illegally, music, movies, programs, and other files are distributed through sites, like torrent sites such as Napster, people use these sites because they want to share their files and feel like it’s almost their “right” to find ways around the system to get digital assets for free or low cost.
2. Knowledge Sharing
This was the beginning of the idea of sharing content for no expected reward. This created a feeling of the internet being “free.” Sites such as IMDb, Wikipedia, and answers.com are places where people can come to contribute and consume content. This was the beginning of people sharing their opinions and personal experiences in reviews with the intention of actually influencing others.
3. Peer-to-Peer Asset Sales
Companies like eBay, Amazon, and Craigslist have built a platform for consumers to exchange and sell items amongst themselves. People had underutilized items, products, and skills that they wanted to share and sell for some extra side money. This led to niche sellers as well, outlets such as Etsy a site that focuses on unique skills and craftsmanship, emerged.
4. Homemade Entertainment
Homemade entertainment sites like YouTube, 9GAG, and Buzzfeed encourage users to create shareable content. Though there’s no true “compensation” most users are rewarded with attention. These sites were never expected to take off in popularity since they weren’t intended to be rewarded, although now some are. It encourages people to create various types of media: videos, music, animation, or photography, to be distributed easily and openly across the internet. It gave people an ability to share their creativity and abilities with anybody and everybody.
5. Social Media
Social Media sites have given every user a voice and an opinion to share with the world. It broke down the anonymity barriers online and removed concerns of revealing too much of one’s self online. Many people consider social media the major catalyst in the movement towards a collaborative economy and the development of multiple sharing services and businesses.
Sharing Economy across Multiple Industries
The most common industries that are experiencing shifts as a result of the sharing or collaborative economy are related to accommodations, fundraising, and transportation. Home-sharing, ride-sharing, and car-sharing are continually growing in popularity. However, the sharing economy is expanding out into many other industries such as dining, business consulting, office space, services such as finance, pet sitting, tasks, and even weddings.
- Meal Sharing
Relatively new meal sharing companies are arising such as EatWith, Feastly, and CookApp that allow people to experience home cooked meals by facilitating dinner parties in a home. A host determines the details of the experience such as what their menu will be, how many people will be in the party, if they dine with you or not, and if they are offering to teach you to make the meal. It’s especially attractive to travelers who crave a home cooked meal while on the road.
The business sharing industry consists of sharing platforms in which an experienced professional can offer their services to consumers when it is convenient for them. For example, Deliv is a company that matches businesses with local people who are willing to deliver packages for extra income when they have available time.
Another method is through an improvised form of outsourcing. People upload projects they need completed and users offer their services based on qualifications. HourlyNerd, is an outsourcing platform used by specialists and consultants allowing for more flexibility within their career. Crowdsourcing platforms also fall into this category. A less explored alternative of business sharing is equipment sharing. FLOOW2 is an example of one of these platforms in which people can rent assets like cranes, bulldozers, healthcare devices, audio/visual equipment, and other devices.
Excess office and storage space is just as much of an opportunity for extra income as a second home. There are opportunities for people who have excess space to make money by renting it out. Platforms such as LiquidSpace or PivotDesk facilitate the renting of professional space. This can offer conference or meeting rooms, temporary workstations, and even monthly rental contracts to businesses that may not have a permanent physical location.
The service sharing category of the collaborative economy is a catch-all for all other platforms offering to match providers and consumers with services such as pet sitting, housework, tasks, and financials. Homejoy and TaskRabbit are two leading platforms for handy work, housework, and cleaning services. DogVacay and Rover provide a marketplace for pet sitting and care that matches pet care providers to pet owners. Companies like Zeel even offer on-demand masseuses.
One of the biggest opportunities in service sharing is in the financial sector. Some platforms, such as Lending Club allows people to loan money to other individuals. It allows people to extend a loan to others after they submit the amount they need, what they need it for and repayment terms. Other platforms, like GoFundMe, provide opportunities for crowdfunding and crowdsourcing in which individuals or companies can invest in growing businesses to fund the original manufacturing of a product, growth of the business, and startup costs.
This is a brand new concept that is coming to fruition within the sharing economy. There are companies that allow women to rent out their wedding dress, as opposed to purchasing brand new, providing a cost-effective solution.
An even more extreme wedding sharing aspect is a company called PopBliss. For a set fee (nominal in comparison to the average cost of weddings), the company plans a large scale wedding where the details like location, theme, décor, etc. are kept a secret until the big day. The couple only needs to provide their dress, tuxedo, and rings. The catch? They’ll be sharing their special day with multiple other couples doing the same.
The company transports the couples and families to the undisclosed location and the ceremony and reception commences. PopBliss makes sure to have a diverse group of couples who are spontaneous and creative individuals interested in learning about people and cultures. PopBliss currently only does a couple events a year, but could grow and pave the way for other companies.
The Sharing Economy and the Events Industry
Consumer travel demands are shifting. People now want a real “local” experience at a destination. People want to meet locals, understand new lifestyles, buy goods, and eat local food. As the world evolves, people are becoming much more trusting and want to explore and learn about new cultures.
Room-sharing companies can solve the issue of exceeding hotel capacity for highly-sought after meetings, conventions, and destinations through these platforms. Travel and hospitality related sharing platforms will continue to revolutionize event and trip planning. When low-cost accommodations and transportation options are provided, travel budgets can be stretched and business travel can be more affordable, this means a higher ROI for the attendees (and the possibility to attend more events). Event professionals have the ability to offer a wider range of products and services with a broader price range.
Since the sharing economy is spreading and more people are using it for extra income and, in some cases, as a primary source of income, there are issues with taxation and regulations. Various regulations and policy issues are affecting the sharing economy in larger cities like New York and San Francisco. Cities are challenged by this “new” concept and therein lies the challenge of creating policies to adapt to these changes. However, room, ride, content and service-sharing platforms are growing in size and users and show minimal signs of slowing in growth. Behind the collaborative/sharing economy is a community willing to fight for these opportunities.
Will You Be A Part of the Movement?
The events industry is a highly dynamic and evolving industry that relies heavily on adapting to emerging trends and consumer demands. Event professionals can either choose to treat the collaborative economy as a phase and continue with traditional methods or they can join in on the new business model by supporting the use of sharing-platforms for accommodations during events. The sharing economy has already disrupted the transportation and accommodation industries and industry leaders are beginning to get nervous about the competition. While the travel industry is taking off in the sharing economy, other industries are a little slower to jump on the wagon. There are many pioneers testing out the sharing or collaborative economy over a wide array of industries with a multitude of opportunities, especially within the events industry. Will you join in?