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Making Money in the Sharing Economy

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You may have heard the term sharing economy over the last few years. It can mean a lot of different things to different people, but I've come to use as a set-up start-up companies that allow you to rent resources that you aren't currently using to others.

Perhaps one of the most popular examples of that is AirBnb, where people are using a room of their house as a small bed-and-breakfast. The owner gets some money for a room that might not be otherwise used. The visitor gets a room that may be cheaper and have better service than a hotel. It works out awesomely for both parties most of the time.

Today, I'd like to bring up three companies I am personally exploring to make money in the sharing economy:

Dog Vacay

I've reviewed Dog Vacay before. Essentially, I'd be pet sitting service. Not to make it sound easy, but I have a dog now and while he does require walks and feedings, he isn't a ton of work. (It's a good thing that his reading level is poor because he might not like me talking about this way.) Having a second dog simply would give him a friend, a fresh butt to sniff. It's a win for both dogs.

The next question is, "Is it lucrative?" Well, people pay between $30 and $40 a night on Dog Vacay for overnight care. There's a crazy dog lady that we've used to pet sit for our dog who typically has 6-7 dogs at her house. That's around $200 a day. Dog Vacay will keep their cut and managing that many dogs is a ton of work. However, it's probably an extra $40,000 a year (accounting for vacancies) - not chump change.

I don't see myself hosting anywhere near that many dogs. I'm not ready to be Crazy Dog Guy (though I am crazy when it comes dogs). I certainly won't have them around all the time. However, I can see averaging a dog a day which would be around $1000 a month.

Uber

I recently covered this one in detail when I asked should I become an Uber driver? Most of the feedback seems to be that it isn't worth it. It just isn't a good use of time after you factor in wear and tear on the car and gas. However, it's really on the cusp of being worth it and a lot of people suggested it as a good way to make a little extra dough if you were to suddenly become unemployed. I'll keep it in mind as a potential safety net.

Relay Rides

Relay Rides is a relatively new car sharing site. You make your car available for others to rent. Obviously this works out best if you happen to have an extra car that you don't need. I happen to be in a such a situation. I've been thinking of selling the car, but for reasons both sentimental and lazy related, I haven't. This could be a good way to keep it, use it when I want, even make some cash on it.

I had actually heard of another car sharing site called Getaround, but that has launched in very few cities. Relay Rides came up in the search for that. Unlike Getaround, Relay Rides seems to be available across the whole United States.

Adding it all up

If I seriously combined a few of these, I bet it would be possible to make around $2000 a month. Uber would be the wildcard as it seems that could make a $50,000 a year salary in some places... I just don't know if I'd want to devote the time for it. Relay Rides doesn't require any of my time, just an existing asset. Dog Vacay requires more time, but dogs can be relatively good at keeping themselves entertained and then resting together. There's the occasional walk that I'd take anyway for my own health. The only incremental time would be feeding them and picking up after that feeding is digested, which is something I'm doing for one dog anyway.

Last updated on July 18, 2014.

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9 Responses to “Making Money in the Sharing Economy”

  1. I would love to take advantage of the Relay Ride. But I’m pretty sure no one wants to rent our 1999 Corolla!
    Another sharing economy business are the parking apps that are targeted to people finding renters for their parking spots. So, someone who lives in a city and commutes out to the ‘burbs lists their spot for daytime use to someone who lives in the ‘burbs and commutes into the city. Like AirBNB for parking.

  2. Lazy Man says:

    Those parking apps are very controversial, because you aren’t renting out something that is really your property. I think San Francisco has shut a few of them down.

  3. NathanCarma says:

    Where is the ‘sharing’ in the ‘sharing economy’? As you say yourself, these may be good ways to make some extra money, but they are not sharing.

    Bed & Breakfasts (the BnB in AirBnB), Guesthouses, Pensions, have all been around pretty much forever. Not sharing. CouchSurfing is actually sharing for those looking for accommodation.

    Dog kennels, again, have been around pretty much forever. Not sharing.

    Uber is pretty much a [unregulated] taxi service. People driving for hire. Not sharing. Carma provides real ridesharing – people sharing trips they would be making anyway.

    Making a profit is not sharing. Not in the dictionary definition of the word, nor the legal.

  4. Lazy Man says:

    There sharing is everywhere NathanCarma. For example the AirBnB is a person sharing their own house for a short time. They aren’t necessarily opening up a Bed & Breakfast, which is a large business undertaking.

    DogVacay is sharing a house, specifically my house for a short term… not opening up a kennel.

    Uber is sharing a car, there is not the costly undertaking of buying a taxi. I understand that whole regulation issue, but it seems to me that it isn’t about protecting consumers, but instead protecting taxi companies interests. That’s not to say that there isn’t an element of each, but it seems like 5% about protecting consumers and 95% about protecting taxi companies.

    The “sharing economy” is about profit… otherwise there wouldn’t be the word economy there.

    I know you work for Carma from all the promotion links I had to take down. I don’t think you represented the company very well with this comment.

  5. NathanCarma says:

    Despite your points, I would respectfully disagree. There are many many examples of AirBnB properties that are purely for short term lease – nobody lives there, they’re just used to get around short-term lease laws. Again, as I have said, that is not sharing.

    As for Uber drivers not having to buy a taxi, so they are sharing – many cities around the world do not require taxi drivers to buy specific vehicles to use as taxis, often the taxi is the same car the driver uses in his personal time? Is this sharing? No.

    I will agree that taxi regulation isn’t all to the betterment of the public, usually it is to fill the coffers of local government – I’m sure taxi drivers would love to be free from the cost of their medallions or adequate insurance.

    Also, there are plenty of economies that don’t necessarily involve profit. The roots of the sharing economy, the likes of coachsurfing, or casual carpool lines in San Fran, are not about profit, they are about sharing for mutual benefit.

    And yes I work for Carma, I never made a secret of that – it’s in my username, email address, and website that I filled in when I commented.

    Here’s some links, not promotional, about some of the aspects of the ‘sharing economy’ :
    http://www.sfchronicle.com/business/item/Window-into-Airbnb-s-hidden-impact-on-S-F-30110.php

    http://theconversation.com/renting-isnt-lending-the-sharing-economy-fallacy-27084

  6. Lazy Man says:

    While there might many examples of AirBnB properties that are for short term lease, it doesn’t seem to be the intention of the site. Some cases of “not sharing” means the entire business is about “not sharing.” While the SF Chronicle seems to show that a 2/3rd are not about sharing, I’m not sure it is fair to take San Francisco as typical. It’s hard to rent a room when an apartment is 800 square feet. I’m sure if you looked at NYC, people would be renting out whole apartments of 800 square feet as well. There’s just no room to “share”, so you are much, much more likely to get people using it as a rental.

    As a landlord with three rental properties, a short-term lease sounds like a nightmare. Every landlord I know, wants to get a great tenant and wants to keep them there.

    As for many cities around the world and how they use their cars as taxis, they aren’t relevant to how Uber let’s their drivers share their cars.

    I’m happy if house for-profit sharing or car for-profit sharing is regulated like hotels or taxis, but I’d rather see the laws meet in the middle. I think it’s a good time to examine whether there really needs to be an expensive medallion and what purpose that serves. Many things we just take for granted because it’s the way it has always been done.

    I think we should celebrate how these companies are innovating. Thirty years ago, our dog would have been in a very small cage-like kennel while we were on vacation. Today, when I go on vacation, I get pictures almost every 15 minutes (for the first 12 hours) from our DogVacay host… many of them of him hiking in the woods. It’s a far cry from being a kennel.

    I’m sure that there are economies that aren’t for profit, but there are many that are… and there’s nothing wrong with that. Making money is not evil. Renting out a room in your house has been going on for decades, even longer, and it’s not a bad thing.

    I hope I didn’t suggest that you were keeping your working for Carma a secret. I was just pointing out to readers that there was an element of self-promotion to the comment. It’s not necessarily a bad thing if not overdone, just making the disclosure.

    This is great conversation. Thanks.

  7. NathanCarma says:

    I think there are many things we agree on. Neither myself personally or Carma dislike the service that Uber, Lyft, AirBnB and the like provide. Neither Uber or Lyft have yet come to the city in which I live (Cork, Ireland), but many of us in the office, myself included have used AirBnB.

    Innovation is great, especially if it leads to improvements for the consumer. Also, while being fortunate that the taxis where I live provide a very good, modern service (with smartphone dispatch), I have lived in many cities where the service is downright awful. As you say regulations need to meet in the middle. Medallions are probably one of the first things that need to be looked at ($1mil+ for a medallion in New York).

    And again I don’t think making money is evil, to be honest I could do with making a little more myself, especially in the current economic climate.

    The only bone of contention, both I personally, and Carma as a company has is the use of the ‘sharing’ moniker. Calling it collaborative consumption, peer-to-peer economy is a much better fit.

    From the Carma perspective, it is the blurring of lines between for-profit services and those such as our own which are sharing more in the old-school sense. We as a company want to protect the ‘ridesharing’ term.

    For myself, I’m an (not so) old backpacker that remembers the sharing economy before it became the monolith it is now. AirBnB back in the early days, couchsurfing, hitchhiking, even sailing across the Mediterranean in exchange for a little cooking. Like myself, the sharing economy has grown up and traded its faded t-shirt for a sharp suit in order to make some money. Nothing wrong with that, but it doesn’t feel like sharing anymore.

  8. Lazy Man says:

    I guess that makes sense. I go back and forth whether nomenclature is really important. Sometimes it can be used to obscure things like a bad reputation, but other times it is essentially a rose by any other name.

    I’m happy with calling it collaborative consumption or peer-to-peer economy, but both are a bit of mouthful and haven’t really caught on with the media. Maybe it’s best to call non-profit couchsurfing simply a sharing app/website, leaving the “economy” out of it. I like “ridesharing” as well and I think it’s named fine to imply non-profit as it doesn’t have the “economy” attached to it. I don’t think the word “share” will go away, it’s just that when combined with “economy” people will think of it differently.

  9. John B. says:

    I think that I will have to agree with the concept of sharing as a way how to make some profit. I think that in our (capitalist) society, it is hard to find broad social motivation to participate, if there is no money incentive. While smaller anarchist groups are able to do really helpful stuff like Food Not Bombs, having an application as for example, over is almost screaming for people who want to make some money. And I’m absolutely ok with that. Another way of sharing is to support of the city you live in. For example, in Toronto, there is a well working BIXI sharing system, which costs around 50$ for a year and offers great service.

    More important question I can see arise is whether we are really ready to transform to share, which also means more personal and altruistic, economy. I would love to see ppl share their abilities, offer their services in exchange for non-monetary benefits.

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