A sharing economy can be described as an economic model in which goods and resources are shared by individuals and groups in a collaborative way such that physical assets become services. The sharing economy’s growth has been facilitated through advances in big data and online platforms.

The sharing economy involves short-term peer-to-peer transactions to share the use of idle assets and services or to facilitate collaboration. Today’s sharing economy is often conducted on an online platform that connects buyers and sellers. The sharing economy is rapidly growing and evolving but faces significant challenges in the form of regulatory uncertainty and concerns about abuses.

Communities of people have shared assets for thousands of years, but the advent of the Internet—and its use of big data—has made it easier for asset owners and those seeking to use those assets to find each other. Sharing economies allow individuals and groups to make money from their underused assets, their free time, or both. In a sharing economy, idle assets such as parked cars and spare bedrooms can be rented out short term. In this way, physical assets are shared as services.

Car-sharing services like Zipcar are examples. According to data provided by the Brookings Institute, private vehicles go unused for 95% of their lifetime. The same report detailed Airbnb’s cost advantage over hotel space as homeowners make use of spare bedrooms. Airbnb rates were reported to be between 30-60% cheaper than hotel rates around the world. The sharing economy has evolved over the past few years to encompass a wide range of online economic transactions that may even include business to business (B2B) interactions.