How to Find the Best Parts of the Sharing Economy

US News

You can't go wrong following the most repeated lesson from kindergarten: Share everything.

It works in adult life, and does much more than leave each party with a warm, fuzzy feeling. That lifelong lesson from kindergarten has evolved into the sharing economy for bikes, cars, rooms, parking spots and pretty much anything that people find worthy of their time and money.

While the sharing isn't always free, it can save users a lot of cash while granting them entry into an economy that's becoming more like a social activity.

"I think sharing websites are popular because they're tapping into a fundamental human drive" that sharing is mutually beneficial, says Jared Krause, CEO and co-founder of the bartering website TradeYa.

Despite the financial and social perks, the sharing economy is not immune to pitfalls. Sharing your car can lead to liability problems. And some users of Airbnb, a room-rental service, can be in danger of breaking the law if they sublet their apartments without charging a hotel tax. That's because certain cities only allow paying customers to spend the night in a hotel, which can be limited by zoning laws to certain areas of a city.

[Read: Would You Rent Out Your Car for $15 an Hour?.]

"When you move to democratization, everyone becomes a small business owner," says Andrew McConnell, who is the co-founder of VacationFutures.com, a wholesale rental marketplace, and a frequent user of ride-sharing services.

While the Internet enables people to rent out their car, house and other items, not everyone wants to deal with the email queries or the day-to-day work required to run a small business.

"Do you really want to put all of your free time into something that you're not as good as a professional who does this full time?" McConnell asks.

But if you're willing to have a little trust in mankind - while still verifying them online - partaking in the sharing economy can be a smart way to save money. Here are some of the best parts of the sharing economy, along with tips to avoid being scammed:

Driving. If you're in a bind or simply need a lift across town, you can hitch a ride with a driver using Lyft, Sidecar, Zipcar, Uber and other smartphone apps. Lyft cars are easily identifiable by the large, pink mustaches on the front, and they offer a professional and branded experience. It's that branded part that is so important, McConnell says.

He says a strong brand that exudes professionalism can help users differentiate between services such as Sidecar, where anyone and any car can offer their services, and others such as Lyft, where drivers are trained to give a fist bump to any passenger getting in the car.

Parking. FlightCar rents out private cars that travelers have parked at airports, helping them get free parking while earning some money during their time away from home. So far it's only available in Los Angeles, Boston and San Francisco.

Users park near the airport then a FlightCar driver drops them off for their departure flight in a towncar. Their car is rented for about $30 per day and FlightCar insures it for up to $1 million when the car is used by a renter.

[Read: 10 Unexpected Costs of Driving.]

For daily parking, services such as Park Circa in San Francisco allow users to share their driveways and parking spaces for less than a lot owned by a business. In London, ParkatmyHouse.com also lets users share driveways, private garages and parking spaces to save up to 70 percent on parking costs.

Apps such as SpotHero, while not part of the sharing economy, can help drivers find parking spots in real-time.

Rooms. If you're going out of town for a while, it makes sense to rent your home and earn a little money while you're gone. Airbnb is one of the most popular services to rent a room, but others of note include Roomorama, VRBO, HomeExchange, BedyCasa and Wimdu.

Like other sharing services, the key to finding a quality room- or home-sharing service is to check if there's a company behind it, says McConnell. This goes back to the importance of finding a branded company that offers the service you want.

People who are considering renting out their homes should confirm that they're not violating city laws or terms in a lease or homeowners' association, or avoiding a hotel tax, says Janelle Orsi, executive director of the Sustainable Economy Law Center in Oakland, Calif.

"You usually can't operate a hotel out of your house," Orsi says.

Users should read the terms of use, or service, listed on the company's website before signing up, she says. There will often be an area in all capital letters where the company disclaims liability and puts it on users, claiming it's just a service that connects people, she says. Others will offer limited liability insurance.

Bikes. Like many parts of the sharing economy, bike sharing works best in large, metropolitan areas. The general concepts underlying bike-sharing services such as City Bike in New York City and Hub Way in Boston originate in Europe.

"Population density plays a part in this, and populations in Europe are more dense," says Jon Lal, founder of BeFrugal.com and a regular user of Boston's bike-sharing program.

Bikes can be rented for one-way trips. Lal, who lives in a Boston suburb, says he pays an annual membership fee of $85 and an hourly fee of $2. The service also has 24-hour passes for $6 and 72-hour passes for $12. Hourly rates vary depending on whether you purchase an annual membership or one of the expiring passes.

Before using a bike-sharing service you should consider bringing your own helmet, how comfortable you are riding a bike in city traffic, being sweaty upon arrival and how close your destination is to the program's bike racks.

Dog sitting. For a $39 fee, Sam Mojtabai rents his home in Thousand Oaks, Calif., to two to three dogs a night through DogVacay.com. The company takes a 15 percent cut and provides marketing, insurance and booking services.

As an insurance company consultant who works from home - and with plenty of land for the dogs to roam - Mojtabai says it's a great gig to make an average of $600 each month. He loves dogs, but says the job isn't for everyone.

"You have to be an animal lover and you have to be patient with them," he says.

Prices at the dog-sitting services, which include Rover.com, are set by the hosts and are usually cheaper than a kennel. DogVacay says its rates average half of what local kennels offer, with more than 10,000 hosts booking hundreds of thousands of "doggy nights" annually.

[Read: Create Better Money Habits in 2014.]

Wi-Fi. In shared spaces like airports and conferences, sharing Wi-Fi can be easy. But since you're not always lucky enough to find an open, secure network, exploring other options is a good idea.

Yourkarma.com sells 1GB of data for $14 and lets users earn 100MB of free data for every new user they share their Wi-Fi connection with. Data itself isn't shared, only the connection. Coverage areas are limited, so check with the company before signing up.

Another service, Fon, is popular in Europe and is slowly gaining a foothold in the United States. For $50 you get a Fon router for your home that other service members can use while you're away. The hotspots can be found on a Fon map.

With the sharing economy decentralizing who provides services, the best way for newcomers to test the sharing waters may be to try one service and see how it goes, says Krause of TradeYa. But even before taking that step, consumers should first verify the service provider at least via social media and communicate online with them, he says.

"The amount of fraud is very, very low," Krause says of the sharing economy. But rating systems, he says, should help keep the systems safe.

There's also the idea of going with your gut feeling. Seeing a pink-mustached car approaching to pick you up may be more comfortable if you check out the driver's ratings online first, but seeing trash on the car floor can be an obvious sign to tell them to continue driving without you.



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