Gaining And Saving with V-Commerce
Tradesy CEO on how to cash in on your closet [Source: https://www.youtube.com/watch?v=OuVBB88IjS8]
During a trip to Mumbai three decades ago, I took the local train to Churchgate. When I arrived at Churchgate, I asked a taxi driver if he would take me to Cuffe Parade. He said yes, but went on to ask me: "Sharing or charter?" Upon seeing the blank expression on my face, he suggested that I opt for sharing: "You will be saving money in your pocket!" We waited for roughly five minutes, until three other passengers joined us. He dropped us at our respective destinations, me being the last, and charging us almost equal amounts. I hesitated, but then, out of sheer curiosity having experienced this interesting business model, asked him how much I would have paid him had I chosen the charter option. "More than double what you paid just now," he replied.
My taxi ride through Mumbai turned out to be a really a good deal. The driver earned twice as much, and I spent half of what I would have had I chosen the charter option. I was quite proud of myself as to my decision to follow the advice of the cab driver. However, what if the other three people in my taxi had been pickpockets and thieves? (Or just downright annoying people). What would I have done? In economics, there is a maxim known as the 'opportunity cost.' In this case, what the opportunity cost meant was this: Did the money I saved sharing the taxi outweigh the money I would have paid had I been late to an important meeting, or a victim of a pickpocket criminal? The question is THE question facing the new 'sharing economy.'
Yes, there were risks. The key here was that I decided to trust the cab driver. This happened in the 1980s and these scenarios may resurge today. There could be many more scenarios where we can share resources, infrastructure, and services in much more effective ways. We call this v-commerce. Though less traditional in form, v-commerce helps each other make better decisions about resources and wastes less. But how to gain that trust, especially when you have been the victim of a crime during a hellish cab ride? Could the answer be technology and harnessing the best of it?
Let's go back to the year 1995, when eBay was born. Since then, eBay's peer-to-peer model has influenced many similar models that are in motion today - think Craigslist, Zipcar, and Airbnb, which took off in 2007. Then in 2010, the phrase 'collaborative consumption' was championed by Rachel Botsman's in What's Mine Is Yours: The Rise of Collaborative Consumption. There's been no looking back since.
So, what's 'collaborative consumption' (or 'peer-to-peer sharing' or 'v-commerce')? Well, there is no one answer. Some collaborative consumption models entail monetary trades, some are free services and some use credit. For example, this term can be used to refer to something like having extra power generated from your solar panels return to the grid to help power someone else's home. Do you sell the extra solar energy to the highest bidder or give it away because of your love for your community? So far, these 'sharing' enterprises have 'shared' with the highest bidder. Airbnb participants don't house the homeless for free - they make money off lodgers. Thus we can expand these collaborative and lucrative practices to include peer-to-peer lending, or even, micro-financing.
So, how can we make such collaboration more effective in today's world? Well, according to the annual Mobility Report by Ericsson, there are currently 2.6 billion smartphone subscriptions in the world - with the number expected to reach 6.1 billion in the year 2020. So, if 6.1 billion people are enabled with technology (and they can put in some trust), 'peer-to-peer sharing' can only thrive. Look at these examples:
- Skillshare: Here anyone can take online classes, watch learning videos and even take a class themselves
- Tradesy: Have branded clothes in your closet? Sell them at here, while the company takes nine percent of profits
- JustPark: A London start-up that matches people with parking spaces through website and mobile application
- Leftover Swap: An app where you can find leftover food to share
Late last year, leaders across the world gathered in Paris to try and find a solution to reduce the emission of greenhouse gases. We can all agree that finding a solution to global warming is not an easy one. Neither is trying to figure out the right way to address a collaborative economy. But creating a new economy, with higher standards and stronger values, is likely to start with the Internet community. To challenge traditional industries, collaborative economy must scale up with smart apps (some of which need to be local, operating under the aegis of a bigger company). Not so easy- but not impossible either. If you ask me, nothing would make me happier than to see collaborative economy thrive, without the monetary aspect associated with it. That's an ideal world for you!