Uber and Airbnb may be synonymous with the sharing economy, or marketplaces in which people borrow or rent an asset from someone else. After all, Uber lets you bypass the taxi company when you need a ride, while Airbnb enables you to get around booking a room in a hotel when you need a place to stay.
But those two private companies aren’t the only players in this burgeoning market, which Bank of America Merrill Lynch thinks is set to explode. As it stands, the Wall Street firm thinks the sharing economy is valued at around $250 billion, but it predicts it will morph into a $2 trillion market in the not too distant future, with clear winners and losers emerging.
Uber and Airbnb aren’t likely to go away, and they may become publicly traded companies in the future, but established ones also stand to benefit. With that in mind, BoAML recently compiled a list of companies the Wall Street firm thinks will be winners as the sharing economy takes off.
Alternative Modes of Sharing
Take Amazon.com Inc. (AMZN): The e-commerce giant is best known for selling all sorts of things on the cheap, but its business does have characteristics that will enable it to benefit from the growing market of shared assets and resources. Amazon Prime, its membership program that gives shoppers two-day delivery, free content and discounts, relies on freelance delivery companies to get the packages to customers on time via its Amazon Flex program. It also operates a marketplace for online merchants to get their products in front of its legions of customers.
Another not so obvious sharing-economy player, but one that will undoubtedly benefit as more consumers around the globe find the need to share aspects of their daily lives online, is Facebook Inc. (FB), the social media juggernaut which recently bypassed the 2 billion mark in terms of monthly active users. Not only does the company enable people to share pretty much anything via photos, videos, and text, it's branching into new sharing economy markets such as enabling peer-to-peer payments and allowing fundraising on its different platforms. Its popular WhatsApp messaging app lets users message each other without the need to pay for a text while Instagram enables people around the globe to share photos and the stories behind them.
Expedia Inc. (EXPE), the online travel booking site, has long cut the middle man—travel agents—out of the process of booking flights, hotels and car rentals, but it has also expanded into the sharing economy with its $3.9 billion acquisition of HomeAway in late 2015. HomeAway competes with Airbnb, providing customers with the ability to book stays in homes rather than in a traditional hotel. While the rise of Airbnb was expected to put online travel websites on notice, Expedia has long argued it helps the travel industry because it increases demand from consumers that weren’t in the reach of online travel agents.
They Get Around
While Alphabet Inc. (GOOG) is yet another example of a tech company that isn’t normally considered a sharing economy player, BoAML added it to its list, largely because of Waymo, its self-driving car spinoff. Earlier this spring, Waymo teamed up with ride-hailing app company Lyft to bring self-driving cars to the masses. The partnership, which could come as a huge blow to embattled Uber, will see Waymo and Lyft attempt to commercialize autonomous vehicle technology by working together on pilot projects and product development.
“Lyft’s vision and commitment to improving the way cities move will help Waymo’s self-driving technology reach more people, in more places,” said Waymo in a statement at the time. A spokeswoman for Lyft added: “Waymo holds today’s best self-driving technology, and collaborating with them will accelerate our shared vision of improving lives with the world’s best transportation.”
Some of the other companies that made it on the BoAML list of the most likely to benefit from the growth in the sharing economy include GrubHub (GRUB), the leader in the online restaurant ordering, eBay (EBAY) which has long operated a marketplace for sellers and buyers, and Box (BOX), the cloud content management and file sharing service for businesses.