The sharing model is a service compensation model in which the owner sells access to underutilized assets to subsequent customers. Owners are responsible for maintenance and service quality.
One of the main differences with leasing is that the typical period of usage for sharing platforms is much shorter. Also, the number of users of assets in a sharing platform is much greater, justifying the name of this change in behavior as “collaborative consumption.” Pooling is a type of sharing platform and provides an alternative perspective on product/service distribution options.
Industry examples of this type of revenue model include:
Launched in 2012, Lyft is the first peer-to-peer ridesharing platform that unites humanity and technology. Based in San Francisco, California, the company recognized the underused capacity of personal vehicles on the road as an opportunity for both direct transportation services at a fraction of the cost of taxis while providing an income to drivers.
Demonstrating successful implementation of the sharing economy through turning products into services for underused assets, Lyft had 162.5 million rides in 2016, three times the amount in 2015. Lyft launched Lyft Line in 2014, an additional service that uses real-time on-demand ridesharing model to maximize every seat in the car. Building upon the original Lyft service model that established trust and reliability with consumers, Lyft Line creates more value for customers by offering fare reductions of up to 60% if they’re willing to share their ride. As the Lyft platform improves in efficiency, passengers, drivers, local business and communities all stand to benefit from on-demand carpooling.
Lyft Line now operates in over 20 cities and gets smarter over time as it better understands how people move around. As the system learns more it can better optimize vehicle rides, Lyft aims to shift society’s perception from “needing a car” to “needing a ride.” Lyft recently raised another $600 million USD at a valuation of $7.5 billion USD as it has expanded operations to 131 additional cities in 2017 alone.