Over the past 10 years, the sharing economy has exploded. As a result, businesses are reconsidering how they go to market with goods and services to keep pace. Companies like Uber and AirBnB helped inspire a new type of business model in which individuals can easily monetize underutilized assets. Every day, millions of people use sharing applications, from ride-hailing services to peer-to-peer lending platforms. New business models are constantly emerging. Fon enables individuals to share their home Wi-Fi networks and use shared routers offered by other Fon subscribers around the world. Even dog-sitting has moved into the shared economy sphere. Thankfully, modern billing and the right monetization strategy can help you take advantage of the economic disruption of the sharing economy.
Sharing Economy Developing in New Ways
Smartphones and apps makie it easier than ever for consumers to find and pay for what they need. While Uber started out a ride-sharing service, during COVID-19 it was able to adapt and transform itself into a food delivery service. This is now a key revenue generator for them during the pandemic. In these uncertain times, we’re seeing consumers opting more and more for efficiency over ownership. Rather than buy new products that will go unused for extended periods, individuals would rather pay for access to publicly available goods and services.
The proliferation of rentable e-scooters for last-mile transportation has proved that communities can successfully share physical products on a large scale through handheld smartphones. In under one year, Bird reached “unicorn status,” a designation given to privately held startups valued at over $1 billion. The sharing economy has even transformed how many employers hire workers. Using labor platforms, such as Upwork and Fiverr, companies can find skilled on-demand workers for short-term engagements to complement existing workforces. Businesses can share talent without having to pay fully loaded annual salaries. Upwork alone manages more than $1 billion in freelance work per year. Overall, the platform supports more than 16 million freelancers. Technology is breaking down historical barriers for virtual workforces, so the number of on-demand laborers will only continue to grow.
Both consumers and businesses can benefit tremendously from the shared economy. However, the right set of operational systems must exist to support these next-gen models.
Traditional Billing Practices Need A New Monetization Strategy
As businesses have jumped into the sharing economy, the need for powerful billing capabilities is more apparent. One of the most valuable aspects of the sharing economy is how quickly enterprises can scale their customer base, or as with the Uber example, transform their business to adjust to market conditions. To be successful in rolling these services out however, businesses need robust back-office solutions that can grow and flex with them. This requires significant automation and efficiency in core activities, such as billing, rating and invoicing. Without these tools, organizations may fall short of their full revenue potential.
Today’s consumers also want flexibility with respect to how they pay for products. Some may want simple subscription packages where they know every month what the cost of the service will be versus others who want to pay only for what they use. From freemium pricing to per-user subscriptions to usage-based pricing, shared economy participants must be able to deploy a myriad of tactics in order to remain competitive.
For companies offering consumption-based models, where customers only pay for what they use, they are able to attract new customers by offering more package options which helps to grow revenue when usage increases. And with the prevalence of the Internet of Things (IoT), businesses can connect ordinary objects over the internet, gather that data in real-time, and turn that usage into revenue, all automatically.
With remote monitoring and cloud computing, monetizing usage is much less burdensome. For enterprises that want to launch IoT-enabled business models for the sharing economy, a sophisticated billing application is a necessity.
Join the Sharing Economy With BillingPlatform
Optimizing your monetization strategy for the sharing economy is easy with BillingPlatform. Our solution helps finance teams configure and deploy any pricing strategy, no matter the complexity. You can also mediate any data from IoT applications and define the creative pricing that fits your unique needs. By automating the rating and billing of high-volume usage from metered offerings you can manage your sharing economy model in one comprehensive, cloud-based solution.
BillingPlatform can scale as your user base grows and evolve with the organization over time. And without any custom coding or IT intervention, your finance team can design, create and deliver creative offers, giving consumers choices, while still providing tailored experiences. Discover how BillingPlatform evolves the role of Chief Financial Officers by downloading our ebook, Cloud-based Billing Management Disrupts to Role of CFO.