The sharing economy has seen a surge in demand in recent years as a service that enriches the economy and society. This article will explain the overview, types, examples, points to note, and the use of IoT in the sharing economy.
In the latter half, we will also touch on points to consider when actually starting a sharing economy business, so please read to the end.
What is the Sharing Economy?
The sharing economy is a new form of economy where individuals and companies lend out their possessions, spaces, skills, etc., to those who need them, thereby generating income. Thanks to the development of internet technology, this market has expanded rapidly in recent years.
Familiar examples of the sharing economy include ride-sharing, where individuals use their private cars to provide taxi services; car-sharing, where cars can be rented temporarily; and crowdfunding, where funds are provided to companies or individuals via the internet.
Another characteristic of the sharing economy is that it is more often C2C (consumer-to-consumer) than B2B (business-to-business). The reasons for the prevalence of C2C are thought to be that it allows individuals to efficiently provide assets they are not using, such as vehicles or buildings, as well as their skills, to those who need them. Additionally, users can choose from a wide range of options services and products that suit their needs and use them at a lower cost.
Market Size of the Sharing Economy
The market size of the sharing economy continues to expand year by year, and currently exceeds 2 trillion yen. Furthermore, as it is projected to surpass 14 trillion yen by 2030, it could be said that this is a market from which further growth can be expected.
Background to the Growing Attention on the Sharing Economy
The background to the increasing attention on the sharing economy and the expansion of its market size in recent years includes the spread of the internet and smartphones, changes in consumer values, and the evolution of IT technology. Among these, the development of IoT technology has also accelerated the adoption of the sharing economy.
IoT (Internet of Things) is a technology that connects various objects to the internet. By connecting everyday items like home appliances and cars to the internet, automation and real-time information provision become possible.
A representative example of IoT technology being used in sharing services is car-sharing. Car-sharing services use cameras and sensors installed in parking lots to monitor and manage vehicle usage status. This system allows users to check vehicle availability in advance and make smooth reservations.
Types of Sharing Economy Services
The sharing economy can be broadly divided into the following six areas:
| Area of Sharing Economy | Specific Examples |
|---|---|
| Sharing Space | Private lodging (minpaku), parking space sharing, etc. |
| Sharing Transportation | Bike sharing, car sharing, etc. |
| Sharing Things | Flea market apps, etc. |
| Sharing Skills | Housekeeping assistance, etc. |
| Sharing Money | Crowdfunding |
| Sharing Keys | Key handover services |
Let’s now look at specific examples of these sharing economy services.
Examples of Space Sharing Services
As examples of space sharing services, we will explain two types: sharing locations and sharing accommodation.
Location Sharing Services
Location sharing services allow users to reserve and use meeting rooms or rental spaces as needed. Many of these services use smart lock systems, eliminating the need to hand over physical keys. Additionally, IoT sensors can be used to grasp real-time information on meeting room usage, occupancy rates, and availability. The fact that anyone can easily use these services with just a smartphone is also a significant advantage.
Accommodation Sharing Services
Accommodation sharing services involve renting out properties like vacant houses and providing them for multiple members to share a single property at a fixed rate. Traditionally, these services were mainly targeted at freelancers, but they are now gaining attention due to the growing demand from people seeking a life away from the city or those wanting to live a multi-location lifestyle. Through the use of IoT technology, these services offer convenience, allowing users to complete everything from reservation to checkout using their smartphone.
Examples of Transportation Sharing Services
As examples of transportation sharing services, we will explain two types: food delivery services and car-sharing.
Food Delivery Services
Food delivery services allow users to order food from partner restaurants via smartphone and have it delivered to a specified location. Users can view a list of nearby partner restaurants by entering their location information into the app. Once an order is confirmed, a nearby delivery person accepts the request and delivers the items to the user’s specified location. Through the use of IoT technology, users can track the delivery status in real-time, and a function that analyzes traffic conditions enables delivery personnel to take optimal routes.
Car Sharing
Car sharing is a service that allows members to share a car. Unlike traditional car rentals, cars can be rented for short periods, making them convenient for quick errands and other short trips. IoT technology allows the use of cameras and sensors installed in parking lots to monitor vehicle usage status. This enables users to search for nearby car stations with available vehicles and make reservations.
Examples of Thing Sharing Services
As examples of thing sharing services, we will explain reuse sharing services and fashion subscription services.
Reuse Sharing Services
Reuse sharing services refer to platforms for buying and selling various second-hand items, such as clothes and books, between individuals. Some services combine convenience and security by utilizing IoT technology, such as unmanned locker boxes where items listed on flea market apps can be dropped off and shipped.
Fashion Subscription Services
Fashion subscription services allow users to rent clothes that match their preferences on a regular basis by paying a monthly fee. Some services incorporate digital sizing technology that allows users to check clothing sizes and designs without visiting a physical store, representing an application of IoT technology.
Examples of Skill Sharing Services
Below, we introduce crowdsourcing as an example of a skill sharing service.
Crowdsourcing
Crowdsourcing is a service where companies or individuals with projects or spot tasks recruit individuals with specific skills, handling the entire process from ordering to delivery. There are many IoT-related projects that are closely linked to the sharing economy, indicating an indirect connection.
Examples of Money Sharing Services
As an example of a money-sharing service, we introduce crowdfunding.
Crowdfunding
Crowdfunding refers to a mechanism where individuals or corporations initiating a project raise funds from a large number of unspecified people through methods like purchases or donations. Since crowdfunding allows even ventures and startups with limited funds or name recognition to take on challenges, its use is also increasing among ventures and startups leveraging IoT technology.
Examples of Key Sharing Services
As concrete examples of key sharing services, we will explain them in two categories: key sharing and private lodging (minpaku) sharing.
Key Sharing
Key sharing services refer to services where unspecified numbers of people issue and hand over keys. In cases where IoT technology is utilized, services exist that combine the issuance and handover of physical keys or digital keys with time, user information, and location data to clarify when, where, and who received the key.
Private Lodging (Minpaku) Sharing
Private lodging (minpaku) refers to renting out owned properties or spaces to unspecified people and is considered one type of sharing service. There are also examples of IoT technology being used in minpaku, helping to predict accommodation demand and calculate lodging prices through big data collection.
Points to Consider When Starting a Sharing Economy Business
Key points to consider when starting a sharing economy business are as follows:
Establish Compensation Systems and Rules
Strengthen Security
We will explain each point in turn.
Establishing Compensation Systems and Rules
Since sharing economy services are fundamentally transactions between individuals, a challenge is that the responsibility and scope of compensation in the event of trouble or accidents are often unclear. If you aim to expand your business in the future, it is crucial to design reliable compensation systems that encourage widespread user adoption and to establish rules for using the platform. As the amount of compensation an individual can provide is often limited, it is necessary to be resourceful, for example, by designing systems in collaboration with external insurance companies.
Strengthening Security
Similarly, because these are person-to-person transactions, it is advisable to consider strengthening security to prevent damage caused by malicious users or harm to your own company. Measures to exclude malicious users include implementing review functions, mutual rating systems, and introducing highly reliable payment methods.
IoT will accelerate the realization of the sharing economy.
One of the key elements supporting the development of the sharing economy is the Internet of Things (IoT).
In fact, IoT is being used in various businesses, such as for procedures like unlocking bicycles in bicycle sharing services, and for automating user authentication and usage status using smart locks and sensors. It can be said that IoT is driving the sharing economy.
Summary
This article explained the overview, types, examples, points to note, and the use of IoT in the sharing economy. While the sharing economy enriches the economy and society, it also faces many challenges regarding security and compensation. However, as IoT, one of the driving forces behind the sharing economy, includes solutions with robust security environments, it is expected to enable businesses that complement the weaknesses of the sharing economy. We hope this article contributes to your understanding of the sharing economy and supports your business operations.
