Many of us are well aware now of the peer to peer marketplace or the share economy, in fact, many of us would have used some of the biggest names – Airbnb, Uber and one of the first type of such marketplace, Ebay. But what really is this relatively new economic model and how does it work?

In the book entitled “What’s Mine Is Yours: The Rise of Collaborative Consumption” in 2010, Rachel Botsman and Roo Rogers first introduced the concept of shared social and economic activity. According to them, this “social revolution” entails the utilization of “shared and open resources” across “multiple platforms” in order to create or derive value which, in turn, will benefit the community.

It is safe to say that what has helped to cement this economic model in place since 2010 is the major leaps and bounds taken by information technology in recent years, providing more platforms for collaborative consumption to take place.

So, what is this model and how does it work? It’s derived from the concept of mutual parties sharing value from an under-utilised skill or asset. This exchange then takes through an online shared marketplace, collaborative platform, or peer-to-peer application.

Thanks to the accessibility of the internet and mobile technology, and the intense rise is social media, managing share-based transactions has never been easier.

There are many advantages of the peer to peer share economy. The main one in 2020 is the ability to earn money from assets or skills that are currently not being used, such as a car, boat or professional knowledge. In recent articles, featured people making as much as $8,000 per month from sharing their car through an online platform, in this case, Car Next Door. This is just one example.

Another advantage that resonates with the environmentally conscious audience is the reuse of products. Rather than throwing items away they can be shared, exchanged, or rented. This is seen with the increase is fashion share websites such as Rent The Runway or The Volte. Other limited time / use products such as baby equipment and clothing are also popular within the peer to peer share economy.

As technology continues to make more advances in the future the peer to peer share economy will be going along with it. Whilst there are some big names making their presence felt in this field, some have fallen by the wayside due to intense growth without structures or fierce competition.

Naturally, the risks and challenges are also bound to be bigger moving forward. Innovators and brilliant minds have to be on their toes constantly, coming up with ideas that will maintain the balance of supply and demand in the marketplace.

One thing is for sure, however: sharing economy has proven is not a fad or a passing trend. It is one that is sure to here to stay and continue to develop and evolve.