Business of shared services

The world is moving into the business of shared services, shared transport, shared office and residential spaces. Research into this has estimated that companies that offer shared residential and office spaces (e.g. Airbnb & WeWork) will grow to $ 6.1 billion while shared transportation companies ( e.g. Uber and Lyft) will be about $ 5.8 billion.

Transportation companies price low and customers travel distances so total outlay is low compared to shared spaces companies which charge higher and are used for long durations of time. A ride will be cheaper than a stay somewhere or renting office space. In addition to the higher pricing, Airbnb is present in many more countries (190) than is Uber (67). Japan has adopted Airbnb extremely well and the company has made inroads into less developed countries too. Strangely, Uber has not been able to make a mark in China.

Replacing the older system

Shared office spaces is replacing the older system of organizations offering space and facilities for meetings, workshops and seminars. The western European countries and China have become fairly heavy users of this service.

These companies have also started diversifying into related and non-related areas of business so that can increase their revenues. Uber has started two companies - UberEats & UberRush – in the food delivery and logistics businesses. These new start-ups are currently present in some cities in the USA and in Canada with plans to extend to other cities and countries.

Airbnb is all set to enter the business traveler segment. Given its reputation for safe, comfortable stays at reasonable prices for holiday travelers and students, it is expected to do well in the business traveler market.

With these new kinds of businesses entering the market, consumers get benefits from the new, improved, diversified but less expensive services they offer.