Optimizing Billing For The Sharing Economy
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. Let’s explore this evolution and how modern billing can help you take advantage of the economic disruption of the sharing economy.
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. In San Francisco, an early-stage startup allows owners to rent personal items that sit idly in storage units. 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.
And the space is still growing
Sharing Economy Developing in New Ways
Between 2014-2025, PwC predicts the sharing economy will grow by $320 billion. Smartphones and apps have made it easier than ever for consumers to find and pay for what they need. Additionally, consumers (millennials in particular) are 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.
Today, Upwork 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.
Sharing Economy Disrupting Traditional Billing Practices
As businesses have jumped into the sharing economy, the need for powerful billing capabilities has become more apparent.
One of the most valuable aspects of the sharing economy is how quickly enterprises can scale their customer bases. Companies can now develop a single platform or service and sell access to many users at the same time. This, however, requires significant automation and efficiency in core billing activities, such as invoicing, mediation, and rating. Otherwise, organizations fall short of their full revenue potential.
Today’s consumers also want flexibility with respect to how they pay for products. Many enterprises offer multiple payment methods to give potential customers as many options as possible. From freemium pricing to per-user subscriptions, shared economy participants must be able to deploy a myriad of tactics in order to remain competitive.
Companies are increasingly deploying consumption-based models in which customers only pay for what they use. With the Internet of Things (IoT), businesses can connect ordinary objects over the internet and automate data streams in real time. This information can then be translated into branded customer invoices without any finance team intervention.
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 a business model for the sharing economy is easy with BillingPlatform. Our solution helps finance teams configure and deploy any disruptive - or standard - pricing strategy, no matter the complexity. With BillingPlatform, you can mediate any data for IoT applications and define custom events that fit your unique needs. Automate high-volume usage and rating for metered offerings and manage your sharing economy model in one comprehensive, cloud-based solution.
BillingPlatform can scale with your user base as it grows and evolve with the organization over time. Without any custom coding or IT intervention, your finance team can monetize complicated offerings, as SmartBike did, giving consumers choices, while still providing tailored experiences.
We help every company embrace disruptive technology and economic trends. Discover how BillingPlatform evolves the role of Chief Financial Officers by downloading our ebook, Cloud-based Billing Management Disrupts to Role of CFO.