Proof that 2014 is the year of collaborative consumption

August 29, 2014 8:07 AM

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(Photo Credit: Sarah Chambers)

Last month HomeAway (AWAY) reported earnings for its second fiscal quarter of the year. At this point it’s undeniable, we have entered the sharing economy.

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Last month HomeAway posted a great earnings earnings report, beating revenue expectations from contributing analysts on Estimize by a hearty 2.4%. HomeAway also maintained its rate of revenue growth after accelerating to 33% in the first quarter of the year.

As the old economic adage goes, a rising tide lifts all boats. When soda is in demand, Coke and Pepsi both perform well. Right now, on-demand apps are taking flight because mobile connective has enabled them to efficiently allocate resources in real time between willing buyers and sellers.

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Unfortunately most collaborative consumption businesses are privately held, so it can be difficult to gauge the success of these private firms which are not required to file earnings with the SEC. HomeAway is probably the best  available proxy to gauge the success of these companies leading the way forward in the sharing economy. Judging by HomeAway’s performance over the past 6 months, it seems that 2014 has been a launching point.

Ride sharing app Uber launched in 20 more cities on Thursday, bringing its presence to 205 cities around the globe. However in some of these places drivers still operate without a proper taxi or limousine license.

Part of what makes the on-demand economy so interesting is that many of the collaborative consumption apps have achieved their success without permission. In many jurisdictions their business is technically illegal. But collaborative consumption apps are not letting the law slow them down. 

On-demand apps and websites are also going head to head against mature industries with powerful lobbying groups. While HomeAway and Airbnb are clashing with the hotel chains and the travel industry, Uber and Lyft are up against taxi companies and rental car agencies. These institutions are well established and have formidable financial firepower and legislative influence. 

Although the sharing economy companies are fighting an uphill battle, their metrics are soaring in 2014. And why shouldn’t they be? Collaborative consumption makes resources more available and cheaper to consumers. It also allows sellers to make more cash by increasing the utilization of their property at times when it would otherwise remain unused. Welcome to the sharing economy.

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