Sharing Economy

AAA

DEFINITION of 'Sharing Economy'

An economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilized all the time.

INVESTOPEDIA EXPLAINS 'Sharing Economy'

Communities of people have shared the use of assets for thousands of years, but the advent of the Internet has made it easier for asset owners and those seeking to use those assets to find each other. This sort of lending is sometimes referred to as a peer-to-peer (P2P) rental market.

Sharing economies allow individuals and groups to make money from underused assets. In this way, physical assets are shared as services. For example, a car owner may allow someone to rent out her vehicle while she is not using it, or a condo owner may rent out his condo while he’s on vacation.

Criticism of the sharing economy often involves regulatory uncertainty. Businesses offering rental services are often regulated by federal, state or local authorities; unlicensed individuals offering rental services may not be following these regulations or paying the associated costs, giving them an "unfair" advantage that enables them to charge lower prices.

RELATED TERMS
  1. Accessory Dwelling Unit (ADU)

    A legal and regulatory term for a secondary house or apartment ...
  2. Residential Rental Property

    A type of property that derives more than 80% of its revenue ...
  3. Commercial Real Estate Loan

    definition of a commercial real estate loan
  4. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
  5. Business Broker

    A professional who specializes in the purchase and sale of companies. ...
  6. Realtor Property Resource (RPR)

    A National Association of Realtors member benefit providing realtors ...
Related Articles
  1. 4 Ways To Value A Real Estate Rental ...
    Home & Auto

    4 Ways To Value A Real Estate Rental ...

  2. The Pros And Cons Of Using Airbnb
    Personal Finance

    The Pros And Cons Of Using Airbnb

  3. Rental Properties: Cash Cow Or Money ...
    Home & Auto

    Rental Properties: Cash Cow Or Money ...

  4. Top 6 Tips For Turning Your Home Into ...
    Home & Auto

    Top 6 Tips For Turning Your Home Into ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center