The Sharing Economy is no doubt becoming critical to the way we live our daily lives. But with terms like “collaborative consumption” and “circular economy” popping up, we run the risk of losing true value behind a mirage of fancy buzzwords. Collaborative economy expert, Rachel Botsman (@rachelbotsman), recently published The Sharing Economy: Dictionary of Commonly Used Terms to help us better understand what these terms mean and how to use them accurately.

There’s a good chance you’ve used Uber or Lyft within the last week to get to your job or your favorite watering hole. But can you properly identify what category of the sharing economy your ride falls into? Do you know how those services differ from companies like Taskrabbit or Chegg? We think of such companies as simply existing within the “sharing economy,” but let’s explore the following 10 terms to see how they are sometimes fundamentally different.

Note: Some terms sound very similar and are not necessarily mutually exclusive.

1. Access Economy: People pay for easy access rather than ownership.

Have you ever thought of Netflix as being a sharing economy brand? Probably not. But it is a service that customers subscribe to in order to easily access TV and movie content instead of owning DVD’s. Now that box set of Friends doesn’t have to take up space on the shelf.

2. Circular Economy: The value and longevity of goods are maximized by reuse.

Yerdle is a platform that allows people to give away the things that they are done using. By receiving pre-owned goods, users are saving money and minimizing waste. Yerdle’s mission is to minimize the amount of new things we all have to buy by 25%.

3. Collaborative Consumption: New ways to consume made possible by the Internet.

Airbnb is a prime example to how the internet has empowered users to rent out their extra living spaces to people from around the world. The platform is now worth over $10 billion and valued more than several individual hotel chains.

4. Collaborative Economy: Matching “wants” to “haves” to monetise underused assets.

Uber drivers “have” cars and you “need” a ride. Companies like Uber bypass the traditional dynamics of supply and demand. Economic analyst Barbara Gray discusses this phenomenon in her recent research article called the New Era of Economic Abundance. Gray’s concept of The Abundance Economy Pyramid shows the profit and growth potential of an abundance of supply and demand.

5. Gift Economy: Goods and services that are given away for free.

Why would people give away “something” for “nothing?” The answer is community: it’s what the overall sharing economy is built on. Platforms like Couchsurfing offer their communities access to free services -- like spending the night on an empty couch -- in order to expand opportunities.

6. Gig Economy: Exactly what it sounds like!

This system employs people for specific “gigs” for a defined period of time. Instead of being paid like a traditional employee, giggers are paid based on the tasks they complete. Postmates is a delivery service that guarantees delivery of any local good within one hour, and pays its curriers per delivery made. Thanks for bringing my lunch hot and ready every Friday, Postmates!

7. On-Demand Economy: Matches buyers and sellers for instant gratification.

Another very rapid service is Instacart, which allows people to have their groceries delivered within an hour. Now that’s what I call service!

8. Peer Economy: Enables buyers and sellers to exchange assets directly.

Also known as the peer-to-peer economy. Marketplaces exist in this space to allow a network of people to exchange money, goods, and services directly with each other. Etsy allows handmade products to be bought and sold directly from craftsperson to buyer.  

9. Rental Economy: Why own when you can rent?

This system allows people to rent goods for a fee rather than own them. Chegg allows people to sidestep the steep prices of textbooks by renting from others in the network.

10. Sharing Economy: Sharing underused assets or services, for free or for a fee, directly between individuals or organizations.

This is the term that is often used the most. It is important to understand that sharing economy systems unlock the value of an underused asset and involve sharing. DesksNear.Me allows companies to rent out extra desk and office space to professionals with complementary skills, communities, and interests. Feel like working from downtown San Francisco for the week? Desks Near Me has you covered.

It is important to realize that when you are talking about a specific company, it may exist within multiple terms. Take StokeShare for example. StokeShare is a web-based platform that allows people to rent outdoor adventure gear -- such as camping equipment and skis -- to other people who don’t want to make a costly purchase. It promotes access over ownership and strives to give old equipment new life. StokeShare’s One Watershed program uses the gear listed on the website to give underprivileged youth access to outdoor adventure, while educating them about sustainability initiatives.

How many terms can you identify within the StokeShare business model?

• Access Economy: Users can access other people’s gear instead of owning it.
• Circular Economy: People’s used equipment gets a second life.
• Collaborative Consumption: Their marketplace is powered by the Internet.
• Collaborative Economy: Matches equipment “wants” to equipment “needs.”
• Peer Economy: Enables outdoor enthusiasts to exchange assets directly.
• Rental Economy: Users rent gear instead of owning it.
• Sharing Economy: Community utilizes value of underused assets.

By understanding these ten terms, we can more clearly identify the subtle differences between today’s disruptive platforms. It is important to realize these differences because they are not there by mistake. All platforms are not created in the same fashion and each system was intentionally designed to solve a specific need in the best way possible.