Most everyone is an active member of the Sharing Economy. And this is a good thing. There are several advantages to this both for individuals and businesses, such as convenience and revenue, just to name a few. The Sharing Economy is the ecosystem of online transactions. People interact with it on a daily basis, whether to call a taxi via Uber, rent a film On-Demand, or make a purchase via Ebay. Businesses are jumping onboard with crowdsourcing companies more every day in order to cut back on spending, provide faster service to customers, and bring in new revenue. Because of these advantages, the Sharing Economy is growing rapidly. So rapidly, in fact, that DHL, the German-based postal and international parcel service, has released a new Trend Report on how the Sharing Economy’s “sharing not owning” concept is greatly affecting logistics, an industry which essentially holds the Sharing Economy’s success or failure in the palm of its hands.
Planning, organizing, developing and running smooth and cost-effective transactions is the most important part of any business. Without fast, fluid, and affordable logistics, businesses and, thus, whole economies crash into a chaotic, unproductive, and unsatisfying system that lets down customers and loses money. This simply can’t happen within the Sharing Economy. It’s too large now to fail. It’s so large, in fact, that DHL has predicted that by 2025, the US Shared Economy will grow into a $335 billion industry in just travel, car-sharing, finance, staffing and music/video streaming alone. If that doesn’t get you listening, we don’t know what will.
Below are some highlights from DHL’s new Trend Report “Sharing Economy Logistics – Rethinking Logistics with access over ownership”.
The Difference Between Traditional & New Business Models
DHL is declaring that now is the “time to revitalize the concept of Sharing Economy logistics”. Why? Because things are changing, and they’re changing fast. It used to be that individuals and businesses were buying assets in order to own them. But in today’s on-demand, Crowd-based economy, people and businesses are better utilizing existing assets and sharing them with one another rather than purchasing new ones.
This concept of sharing is not new, but the technology with which people are sharing is new. New devices and digital platforms give “temporary access to a service provider’s otherwise underutilized asset, service, or skill”. Businesses themselves no longer own the assets they are providing, they’re simply renting them and letting customers rent them as well. This saves money on spending while bringing in revenue from what they do provide themselves: the platform.
For example, AirBnB does not own the homes they are helping people to rent out. They simply provide a platform on which people can find comfortable and affordable accommodations while traveling. Similarly, Uber drivers use their own vehicles to provide a service on the Uber platform. This way, the business makes a percentage without having to spend much money on buying and owning vehicles. They generate revenue while spending very little. Both of these businesses do not have to spend money purchasing their assent, but instead make a percentage off of what they are providing: the platform.
Smart-phones, online payment methods, shareable assets (such as cars), online reviews, GPS, and algorithms that allow for relevant marketing to specific customers are only some of the things that are contributing to the Sharing Economy. And these options, platforms, and devices are growing and developing every day.
Other Industries Can Set An Example For Logistics
Other industries, like hospitality, agriculture, ridesharing and urban warehousing play a huge role in today’s Sharing Economy and can provide logistics industries with advice on how to properly function in this on-demand world.
The B2C (business to customer) world is thriving. AirBnb allows customers to share their homes online with others. Car sharing services do the same with cars, which cuts back majorly on traffic, crowded streets, and pollution. But B2B (business to business) services are thriving as well. Farmers, for example, are now able to share equipment rather than buy their own, which tends to be very expensive – especially for smaller farms. Construction industries are benefiting from this as well. Often times, equipment sits unused for months. But, equipment rental companies are bringing in millions of dollars annually. And urban warehousing allows cities to better utilize limited space for storage.
All of these businesses function via online or apps that use data and security to provide consumers with safe, convenient experiences. Logistics can provide relevant information to consumers, employees, and cities in order to make the economy and everyday life run more smoothly and efficiently. For example, daily movement data can be shared with city governments in order to better plan and accommodate mobility networks and transportation systems.
Central sharing systems can provide information for all residents, including businesses and government agencies. This creates transparency, and thus trust within our communities.
It’s all about keeping up with and even staying ahead of change in order to create a more holistic, convenient, and seamless economy.