The Sharing Economy for Baby Boomers: What You Need To Know
Let’s cut to the chase. The sharing economy is here to stay, and the Baby Boomers stand to benefit most from this massive economic shift in how we as a society choose to consume.
The sharing economy is an umbrella term that encompasses thousands of online services that allow people to turn underutilized assets into income-producing ones. These assets include your home, car, spare time, hobbies, and more. And, these online services, of which there are thousands, include Airbnb, Uber, TaskRabbit, and more.
And by sharing, we don’t mean the benevolent kind at Woodstock ’69 where you and a circle of friends are ‘sharing’ a couple giggle sticks.
When you boil the sharing economy down, it’s not really about sharing, it’s about access. You, the person with excess assets, are allowing access to those assets for a pre-determined fee. Simple as that.
But Boomers aren’t really used to access. For the most part, they embraced an ownership mentality over access. What’s mine is mine! And, because most Baby Boomers lived very frugal lifestyles growing up, they’ve compensated later in life with a wave of unprecedented consumerism. This isn’t a bad thing. It’s just different.
Now, something else different is happening. You can thank your Millennial children for this, after you tell them to pull up their pants!
The Shift from Ownership to Access
Let’s illustrate this economic shift with some rhetorical questions that have given rise to the sharing economy.
Why would I own a car when it sits idle for 90% of the time? Or, if I own a car, why can’t someone else use it when I’m not? My kids have left, I have empty rooms in my house, why wouldn’t I rent those out? I want to stay social, so why wouldn’t I offer tours of local attractions to tourists? If I can’t drive myself, why wouldn’t I use Uber as a cheaper and more convenient alternative to taxies? And so on. This is where access has overtaken ownership.
The consumerism of past generations has created significant abundance. And Millennials have looked at that abundance, and asked: How can we capitalize on this? Enter companies like Uber and Airbnb, who have created marketplaces to ‘share’, at a cost, your underutilized assets. When you aren’t using something, someone else can now. The business model is simple.
Dear Baby Boomers: Business is Booming!
Let’s take a quick look at some figures for context.
PricewaterhouseCoopers (PWC) predicts that the sharing economy will grow from a value of $15 billion in 2013, to $330 billion by 2025. Consider that Airbnb has over 2 million listings worldwide, and that the largest hotel chain, Starwood-Marriot, has only 1.1 million rooms.
How many people are taking advantage of this opportunity? According to TIME Magazine, 1 in every 5 American adults has earned some form of income in the sharing economy. Another study by JP Morgan found that sharing economy workers boosted their income by 15% through this flexible work option.
Enough with the numbers, you’re all smart people, let’s discuss the specific implications for Boomers.
So What Does The Sharing Economy Mean For Me? Asks the Boomer…
“Aging boomers and the sharing economy go together like peanut butter and jelly” – The Globe and Mail, November 20, 2015.
In reference to the sharing economy, Forbes Magazine declared that this economic shift is “better for Boomers than Millennials.” There are many reasons for this worth noting.
The first is a desire to continue working coupled with increased household debt. It’s a new reality that Boomers are working longer, and the vast majority plan on working in some capacity after retirement. Boomers are doing this for many reasons, but many are doing so because of increasing debt loads.
Secondly, the sharing economy is, at its core, the embodiment of employment flexibility. Take Uber for instance. If you’re a driver, you can work whenever you want for as long as you want simply by turning on the app and accepting rides. Simple as that.
Uber isn’t going to call you up and say “hey John why weren’t you at work today? We had that quarterly meeting!” And for Airbnb, you rent out a room whenever, and to whomever, you want. You can do this one day a month, or 30 days a month, it’s totally up to you.
And thirdly, there are little to no barriers to entry in the sharing economy. You can become a small business owner, with no overhead, literally overnight. These sharing economy platforms have done all the heavy lifting, the marketing, and attracted a pool of customers. All you need to do is register. How’s that for a low barrier to entry?
But don’t listen to me, check out what your peers are already doing. According to Uber, 25% of its millions of workers are 50+, and more drivers are 50+ than under 30.
It’s easy to understand why Baby Boomers are flocking to the sharing economy. Over the next few weeks, we will delve deeper into specific platforms that may be your next flexible income opportunity. In the meantime, check out our many free resources on the sharing economy at the Casual Capitalist.
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