Study shows the US sharing economy growing exponentially
The 'sharing economy' has received a lot of grief from traditional businesses. The hotel industry sees sites like Airbnb as a threat to their way of business, and Uber and Lyft have stuck in the craw of the taxi industries across the globe, due to their lack of regulation and the debatable employment status of their drivers. Calls for regulation in the fastest growing segments of the peer-to-peer economy are rising as fast as their popularity.
But there is no doubt that the sharing economy has taken off like a rocket, as people look for more convenience, more options and more bargains. Aside from the big names like Airbnb, Uber and crowdfunding biggie Kickstarter, the sharing economy is making more inroads in all segments of consumerism, including dog boarding (DogVacay), professional services (TaskRabbit), financial lending (LendingClub), wifi access (Fon), clothing sales (Poshmark) and bike sharing (Liquid).
Hitwise, a division of Connexity, recently released a study that shows a dramatic shift in Americans turning to their peers to access goods and services. The study by Hitwise – a provider of online consumer insights and analytical services – notes that website visits to those sites have increased more than three times in the past couple of years.
The study, Data Day 2016: A Look at the US Sharing Economy which examined space and financial sharing activity, found unique differences between how digital natives and digital migrants use the Internet to share. It looked at how Americans engage with the sharing economy overall, how digital natives use collaborative consumption to crowdsource and connect, and how digital migrants (those not raised with the web) use the Internet for to travel planning and investing.
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Among the findings are that space-sharing sites (those that offer shared or rented spaces like homes, rooms or office spaces) are growing fastest, and that financial sharing (crowd funding) sites are most used by digital natives.
"The sharing economy is growing at an exponential rate," says Nigel Wilson, Managing Director at Hitwise. "Thousands of sharing economy companies have sprouted up around the world, and consumers are actively engaging in collaborative consumption. According to PwC, 44 per cent of all adults in the US are aware of the sharing economy and 19 per cent have engaged in a sharing economy transaction. It is imperative for brands to consider how to support and participate in collaborative consumption, rather than compete against it."
Wilson has a point on the brand front, which is essentially that “if you can’t fight ‘em, join ‘em.” To wit, some sharing upstarts have already been bought by bigger companies. One of the first viable car sharing services, Zipcar, was bought by auto rental giant Avis, and GE invested $30m in Quirky, which solicits product ideas from inventors and garners votes from ordinary consumers on which ideas they like best, with the winning products getting manufactured and sold by major box store retailers. Considering venture capital firms are the major investors in many of these sharing companies, it may not be long before they are considered not only viable companies, but major players in the US economy. Some, like Uber, Airbnb and Etsy have already become household names and are still on an upward arc.
Despite how they are growing, there is no doubt that the sharing economy is on a sharp rise, as the Hitwise study shows.
A sampling of the numbers
- During the first three months of 2016, more than 143m Americans visited a leading space-sharing site.
- Visits to space-sharing sites have skyrocketed by 169 per cent since 2014.
- In the first quarter of 2016 there were over 107m visits to top financial sharing sites, suggesting a cultural shift towards a more collaborative financial ecosystem.
- The number of visits to top financial sharing sites jumped 329 per cent in the last two years.
More on space-sharing
Americans aged 25-34 represent the space-sharing sweet spot. They are more likely to visit space-sharing sites than any other demographic.
Digital natives who grew up with the Internet, essentially Millennials and younger, are more active in the sharing economy overall, and are more comfortable sharing a free couch with travelers. They over-index for more casual room sharing networks like Couchsurfing. They are also more likely to visit office sharing and co-working websites such as WeWork, PivotDesk and Liquidspace.
Digital migrants, those aged 35 and older, have had to learn the language of technology to adapt to a digitally connected world. Digital migrants are less likely to participate in the sharing economy overall, but are more highly engaged with home swapping and peer-to-peer lending sites. They are 10 per cent more likely than natives to visit space-sharing sites, and represent the majority of visits to sites like VRBO, Airbnb and Home Away. Digital migrants represent a larger percentage of the population than younger digital natives, therefore using up more online traffic.
Who over-indexes for which space-sharing sites?
More on the financial sharing economy
The financial sharing economy allows people to fund, share and distribute money to invest in a chosen venture or project. Digital natives are 40 per cent more likely to visit financial sharing sites, particularly crowd funding sites like Kickstarter or Indiegogo. This trend reflects the cultural values of Millennials, who have less money to give but are willing to fund the projects they believe in.
Digital migrants are less likely to engage with crowd funding, but are more likely to visit peer-to-peer lending sites such as Lending Club, PeerForm and Prosper, which shows a trend beyond traditional banking.
For its methodology on this study, Hitwise sourced data from a range of panel partners, delivering insights into the online behaviors of more than 8m opt-in panelists, including 3.5m mobile devices, within the US. The Internet behaviors were sampled and weighted using algorithms so they were representative of the entire US population.