What are the opportunities in the sharing economy?
Consumers, established companies and new players can all benefit from the opportunities afforded by the sharing economy. Companies can enter new markets and unlock hidden value, and consumers can benefit from greater choice and lower costs. For example, utility companies wanting greater grid flexibility can pay consumers to power down their energy requirements during periods of peak demand. Furthermore, there are also opportunities to offer services to shared economy firms grappling with new challenges posed by the business model and ownership structure of the sharing economy.
Business model examples of the sharing economy
Business model examples in the sharing economy are typically paying for the time the service was used. For aircraft engines, for example, aeroplane manufacturers pay engine manufacturers for every operational hour. This ensures engine manufacturers are incentivised to build engines that rarely break and require little maintenance. For software, you might pay for every “success”, in other words, every new client or customer you recruit using the software.
Rolls Royce has successfully capalised on this strategy offering engines-as-a-service, power-by-the-hour services and other usage-based services, helping generate more than half of its $13 billion revenues.