To fully understand the concept of shared economy, you need to view it through the lens of Sharing space. Your first space is hopefully your home. If you are a service industry worker, your second space is likely to be your company’s office. You are now increasingly likely to do work in a third place, or a whole range of third places. This could be a coffee bar, a hotel, a park or a train – a shared, social space.
The sharing economy is an economic model defined as a peer-to-peer (P2P) based activity of acquiring, providing, or sharing access to goods and services that is often facilitated by a community-based on-line platform.
The ‘Sharing Economy’ also refers to Collaborative Consumption or the Access Economy.
represents an economic revolution built around an economic philosophy that space and capital goods are better shared. The concept of the sharing economy started to emerge in the early 2000s. Developed countries such as; USA and China have embraced the concept of a sharing economy to foster development. The best known examples are Uber and Lyft, Airbnb, WeWork and Zipcar.
For third world countries, like Uganda where the use of digital tools is still minimal, leaves this analogy a virgin territory that can exploited. Africa is no longer a “dark continent” compared to the time Mo Ibrahim dared to set up the first telecommunications company. This was era when only the rich could afford mobile phones. If you were born before the 1990s’, you probably understand the joy brought when Celtel came into the market. More opportunities can be created in this shared economy especially real estate in areas of hospitality, office space and retail space.
Understanding it’s applicability in Real estate
The Real estate industry is regarded as one of the most rigid sectors that hasn’t changed much in the fourth Industrial revolution. Unlike the finance industry which has been massively disrupted by the FinTech innovations. Despite the introduction of block chain, database systems and on-line booking platforms, the system doesn’t seem to have made any difference as people still prefer to rely on the services of real estate agents (Brokers). However, with the emergence of Prop-Tech, there have been some disruptions. And these have revolutionized the hospitality business, housing industry and led to the birth of new trends such as; co-working and co-living.
Short term renting and Co-living
A clear form of expression of the shared economy in hospitality space is of course Airbnb, which was launched in the autumn of 2008 at the peak of the global financial crisis. Its founders, Brian Chesky and Joe Gebbia, who had both recently graduated from the Rhode Island School of Design, were unable to find a job. When an industrial design conference came to town, they realised a commercial opportunity to make extra money by taking in a few boarders who were coming to the conference but did not want to pay for an expensive hotel. So they built a website, bought some air mattresses, and played host to three people for the weekend.
Now we can understand why everyone is renting with their own home space on Airbnb, even without the common middleman (broker), to earn an extra dollar from the unused home rooms. With this trend, short term renting has been made easy. For example, Kato stays in China but he has a home in Mbarara and Wakiso which are fully used. He can decide to rent out some rooms in his houses which are not in use to earn an extra income from foreigners who may jet into the country to either tour around or for diplomatic reasons.
The best reward from this sharing economy is the ability to link demand to supply. You quit know well that it takes months for property broker/owner to find a potential and willing buyer. Due to lack of insufficient information between both parties. Nowadays, you can visit Aderok Real Estates to help you either find a variety of properties for rent or sale.
Another outcome is co-living.
Co–living is a new kind of modern housing where residents with shared interests, intentions, and values share a living space where they’re almost like a big family. Co–living is built on the concept of openness and collaboration. With the residents often sharing similar philosophical values. A combination of factors have led to interest in this type of living space, including;
- a lack of housing opportunities
- the cost of independent accommodation
- raising finance to purchase,
- a growing interest in lifestyles not dependent upon long-term contracts.
Two years back, Anthony a Friend of mine referred me to a colleague who wanted a partner to stay in an apartment which contained two bedrooms, a kitchen and a bathroom. The agenda behind this is rent sharing. And most of this applies to the young people especially University students who are not yet financially stable to afford a whole unit. I know of an old man in Kikoni, Makerere who has turned his own home into a home for students that can’t afford to leave the place even after graduation. All of his semi-attached houses are always occupied year in and year out. This old man is now able to earn a residual income from his properties.
Shared workplace and co-working
The third place (or third space) is the social space separate from the two usual social environments of home (‘first place’) and the workplace (‘second place’). Examples of third places are environments such as cafes, clubs, public libraries, or parks.
The second example of the shared economy being applied to real property is optimizing work-space. Co-working provides an opportunity to create third places. This encourages knowledge sharing, innovation and the user experience supporting collaboration by workers from different backgrounds. For example: at Aderok Real estate, their office space is shared with another building consulting firm. This doesn’t only apply to office space but retail space. In Kisenyi, a city suburb, most agricultural retail traders prefer to share space to overcome the high rental charges.
Today, most people have turned their homes into workplaces to levy the daunting monthly rent off their balance sheets. Talk of organizations and hubs like Kafeero Foundation Innovation village and which provide workspaces to young developers and start-ups. As of now, a new facility is being constructed at Nakawa Business school, fully funded by the Ministry to ICT to provide free work-paces for various startups.
Could this be the reason to why most office spaces in malls and urban places are still vacant? The rent paid for a space around in Kampala is extraneous. Unless it is an established and renown organization or government firm. For SMEs, co-working would be the best option at the moment to overcome the overwhelming operational costs.