The Oxford dictionary defines ‘share’ or ‘sharing’ as “a part or portion of a larger amount which is divided among a number of people, or to which a number of people contribute.” It has become a 21st-century successful business model globally. Companies use ‘sharing’ as a business model to increase revenues and decrease expenses. It results in greater earnings and companies also contribute value to the stakeholders.
Some taxi-cab providing companies use ‘rideshare’, such as Ola Share and Uber Pool. This model attracts a large number of customers, and companies add more revenues and offer benefits to the customer. This has become a win-win model for both companies and customers.
There is a new buzzword in the global markets—sharing office space. Big IT giants and emerging start-ups are using the ‘office space sharing’ model which results in an efficient utilisation of available limited resources by sharing the expenditure. This model encourages value creation and also shares organisational cultures of various companies.
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A similar kind of sharing model is implemented by telecom companies, which offer their services on a sharing mode, such as internet sharing packs, balance sharing packs, etc. Through this arrangement, telecom companies improve their revenues and offer flexibility to the customer.
Share, or sharing, has also turned out to be a success mantra on social networking sites and apps.
Eventually, we are going to see a sharing model between states, nations and economies. Some Indian start-ups, like Snapdeal and Flipkart, have cut down their expenditure by sharing office space. Many start-up incubators are supplying office infrastructure on a sharing basis.
There is a new tendency in the market, in the form of sharing of capital as an incentive to drivers—by Ola and Uber. The customer benefits by getting free rides and cash-back offers. Even some online payment banks, wallets, apps are giving freebies in the form of an initial cash bonus, cash-back offers, etc. Most of them are not public companies, yet they are relatively high-growth companies. Even sharing of human resources is taking place. Freelancing business is flourishing, which benefits both the employer and the employed.
However, all of this raises a question: How sustaining are these models? It is the market movement that will decide the destiny. Two years ago, e-commerce proved to be a successful business model, but all those companies are now having difficulties for raising funds and are facing stiff competition from global firms. To sustain, they are using the capital for customer incentives, rather than building firm assets and incubating funds for innovation.
Sharing is important, but to what extent? The answer is as long as the sharing model reaps profits.
M Chandra Shekar is assistant professor and RK Mishra is director, Institute of Public Enterprise, Hyderabad. Views are personal