How Internet of Things will change the Sharing Economy

03rd Jul `17, 11:00 AM in Analytics

More Internet of Things (IoT) devices come online every year, and they’re already making an impact on the…

Ryan Ayers
Ryan Ayers Contributor

More Internet of Things (IoT) devices come online every year, and they’re already making an impact on the way we live our lives. Smart homes are making us more energy-efficient, “virtual assistants” like the Amazon Echo and Siri are helping us keep track of everyday tasks, and IoT coffee makers and z-wave outlets are making it a lot easier to get out of bed and maintain a comfortable home. But the IoT is having an impact on whole industries, not just our everyday tasks. The sharing economy has been wildly popular in the last few years, comprised of platforms that connect people who are willing to provide services (like grocery shopping or ride sharing) with people that need those services. Because these platforms are based on big data, they depend on data input from millions of users in order to work. But what would the implications be if devices the sharing economy depends on contacted one another directly? How could the IoT change the sharing economy?

A Partnership with Massive Potential Impact

Today, sharing economy platforms use smartphone and web applications to communicate between the service provider, the platform, and the customer. But what if smartphones could communicate directly with devices that help provide the services—without the involvement of the device’s owner? This kind of automation could make the sharing economy even more efficient and user-friendly.

Examples of Possible IoT Partnerships

Some companies are already imagining what these partnerships might look like. GigaOM created a concept for an IoT smart locking device, called “Lock-Bot” which would allow guests to access the key to the unit securely, and return it at the end of their stay—with notifications to the property owner that the transaction had been completed. While the locking device failed to reach its Kickstarter funding goal, it’s an indication of the direction the sharing economy is heading.

Another example is the dream of automated rental car transfer. Instead of locating a rideshare driver through a smartphone, people could actually find the rental car nearest to them (similar to the ZipCar model, which has small lots dispersed over large cities), open the locks with a Bluetooth beacon, and drive away, with the GPS recording distance in order to charge the user’s credit card.

Less Human Involvement

Of course, AirBnB hosts still have to clean their rental units (or pay another person to do so) and Uber still needs actual human drivers behind the wheel—for now. As more devices come online, and artificial intelligence achieves greater sophistication, however, even these interactions will likely become unnecessary, allowing for seamless sharing and more freedom on the part of the home or car’s owner. This will enable people to generate a passive income stream with assets they already own, either as a primary or secondary source of income.

Will Public Opinion Slow Things Down?

As with any new technology or idea, the IoT is going through some growing pains, and is still working to gain public acceptance. Now that the sharing economy has become mainstream, more people are comfortable with the idea of staying at someone’s apartment over a hotel, or taking a rideshare instead of a taxi. This is especially true of the Millennial generation, which will drive the majority of spending in the near future. Trends indicate that Millennials prioritize experiences over consumer goods, an attitude that is perfectly suited to an evolving sharing economy that encourages maximum use of a smaller number of goods. This generation is also used to having the convenience of smart devices close at hand, meaning the learning curve of integrating the IoT into the sharing economy will be less significant overall.

The Labor Force is Always Evolving

Of course, there are some concerns about how the IoT will affect the sharing economy, namely that it will cut out many of the jobs that have been created by sharing goods and services. Driverless cars are far along in their development, and ride-sharing services have already begun adding automated vehicles to their fleets (though the use of these is limited by pertinent laws). However, automation has always played a role in our evolving labor force, and the probable shift to IoT devices in the sharing will simply create shifts in the labor force that are completely normal. Sharing your car would have been unthinkable in the 1960s, but today, it’s part of our economic future.