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Sharing Economy - Market Size

Delivered May 2nd, 2019. Contributors: Oshione S., Uche M. and

Part
01
of two
Part
01

Sharing Economy: Market Size

After thorough and wide-reaching search through reputable media sources, sharing economy market reports, and authoritative agencies such as the Bank of America (BofA), BIA Advisory Services, PwC, PR Newswire, Statista and ZeroHedge, the US sharing economy market size could not be found preexisting as the information appeared to be unavailable in the public domain. However, by making some logical assumptions and leveraging publicly existing data (US sharing economy TAM, global sharing economy TAM and global sharing economy market size), we were able to triangulate the US sharing economy market size for 2017.

Useful data

Assumption

We assumed that the share of the US sharing economy in terms of the total addressable market (TAM) in the global sharing economy is directly proportional to its market share in terms of market revenue (sales revenue) in the global market.

Triangulation

We have therefore estimated the US sharing economy market size as follows:
Global sharing economy TAM = $2 trillion 
US sharing economy TAM = $785 billion 
US market share in the global sharing economy in terms of TAM = $785 billion / $2 trillion * 100 = 0.3925 * 100 = 39.25%
US sharing economy market size as of 2017 = $250 billion (global market size in 2017) * 0.3925 (estimated US market share) = $98.13 billion
Part
02
of two
Part
02

Sharing Economy: Market Growth

The expected CAGR for the US sharing economy during the next 2-4 years is between 16.67% and 36.43%, with an anticipated market size between $22.99 billion and $75.46 billion in 2022.

METHODOLOGY

We began by reviewing the previous request about current market size and then scoured through economic news outlets like Forbes and Entrepreneur, governmental organizations like the World Economic Forum, and research organizations like Juniper Research, Brookings Institute India, and PwC for precompiled info on the market size of the US sharing economy. However, that approach was unsuccessful, so we looked for the market size of the global sharing economy in hopes that we could then estimate the US percentage. What we discovered was that PwC's 2015 report: "The Sharing Economy" is the most frequently quoted data source for the global size of the sharing economy. Since we had found different numbers available from Juniper Research, we decided to calculate a range of CAGRs of the global sharing economy and estimate the US market size that way. Besides, this paywalled report lists market size information as well as key insights.

EXPECTED GROWTH RATE OF THE US SHARING ECONOMY

  • According to Juniper Research, in 2022, the estimated size of the global sharing economy will be $40.2 billion from $18.6 billion in 2017 with the Americas region making up 57.2% of that total. They list the major players as Airbnb, Deliveroo, Lyft, WeWork, and Uber.
  • PwC predicts that the global sharing economy will jump from $15 billion in 2015 to $335 billion by 2025.
  • According to the 2017 Bank of America Report on Global Sharing Economy, the total potential global sharing market is $2 trillion and the addressable market in the US is $785 billion. The report considers the sharing economy to include "on-demand (e.g. Uber), gig (e.g. TaskRabbit), access (e.g. Spotify), collaboration (e.g. WeWork), platforms (e.g. Amazon), rentals (e.g. Airbnb) and peer-to-peer (e.g. Lufax) business models."
  • BofA's prediction is "striking" because other than Airbnb and Uber, no large companies have come out of the sharing economy. The prediction assumes that baby boomers will embrace the sharing economy and that the sharing economy will expand outside of the hotel and restaurant industries. BofA has a broad definition of what it considers to be part of the sharing economy, including companies like Spotify and Pinterest.

CALCULATIONS

CAGR:

First, we calculated the CAGR based on Juniper Research's figures using the standard formula for CAGR = (End Value/Start Value)^(1/Years)-1:

($40.2 billion in 2022 / $18.6 billion in 2017)^(1/5 [years difference])-1 = 16.67%

We then calculated the CAGR based on PwC's figures, using the same standard formula of CAGR = (End Value/Start Value)^(1/Years)-1:

($335 billion in 2025 / $15 billion in 2015)^(1/10 [years difference])-1 = 36.43%

ESTIMATED US MARKET SIZE:

By applying Juniper Research's estimation that the Americas would make up 57.2% of the global sharing economy market to both estimated global totals, we can estimate the future size of the US sharing economy. For Juniper Research, the calculation was straightforward: multiplying 57.2% (or .572) by the 2022 global estimate of $40.2 billion:
The estimated market size of the US sharing economy market size in 2022 = $40.2 billion * .572 = $22.99 billion
To achieve the same number using PwC's estimates, we had to multiply the grand total by the 57.2% US market share and then feed that number back into our CAGR formula to reach an estimated market size for the year 2022 as follows:
 $335 billion estimated global market size in 2025 * .572 = $191.62 billion US sharing economy market size in 2025.
Feeding this value into the CAGR formula, the US sharing economy market size in 2022 =
($191.62 billion in 2025 / $ in 2022)^(1/3 [years difference])-1 = 36.43%
= $75.46 billion

Sources
Sources
From Part 01
b

The Current and Future State of the Sharing Economy

brookings.edu
Publication Year: 2017
Quotes
  • "The sharing economy is estimated to grow from $14 billion in 2014 to $335 billion by 2025."
  • " While initial numbers are small, PwC emphasises the potential for growth in the sharing economy: between the five key sharing sectors (automotive, hospitality, finance, staffing, and media streaming), $14 billion in revenue was generated, a figure slated to grow to $335 billion in 2025."

4 big trends for the sharing economy in 2019

weforum.org
Publication Year: 2019

The Sharing Economy Meets Reality

cacm.acm.org
Publication Year: 2017
Quotes
  • "The sharing economy seems big and growing fast. In 2015, PricewaterhouseCoopers estimated that, from $15 billion in global revenue in 2014, car and room sharing, crowd-funding, personal services, and video and audio streaming would reach $335 billion by 2025."
  • "These numbers extrapolate from the growth rates of Uber and Airbnb. Are these growth rates sustainable and is the economic activity really new? It is time to ask these questions."

Half Of Americans Plan To Use Sharing Economy Services Like Airbnb, Uber And Lyft For Summer Travel In 2017

prnewswire.com
Publication Year: 2017

Sharing economy: number of users U.S. 2016-2021 | Statistic

statista.com
Publication Year: 2019
Quotes
  • "There were 44.8 million adults using the increasingly popular sharing economy services in the United States in 2016. This figure was forecast to increase to 86.5 million by 2021."

A Primer On The “Global Sharing Economy” In 20 Charts

zerohedge.com
Publication Year: 2019
Quotes
  • "The potential addressable Sharing Economy market is US$2 trillion globally, while we estimate the current market at US$250bn. The addressable market in the US is US$785bn, US$645bn (€572bn) in Europe and US$500bn in China - (source: BIA/Kelsey, SIC). "
  • "PwC forecast that the Sharing Economy market opportunity could grow to US$335bn by 2025E with transport, home sharing, staffing, streaming and staffing expected to be the fastest-growing verticals, with 2013-25E CAGRs of 17-63% (source: PwC). Take-up of the Sharing Economy at the B2B level could be another positive game-changer with some experts seeing the B2B Sharing Economy as "bigger than the Internet" in terms of transforming how commerce gets done."
p

Sharing or paring? Growth of the sharing economy

pwc.com
Quotes
  • "A related study by PwC shows that while in 2013 the sharing economy companies in the five sectors where the new business model is the most prevalent earned sales revenue of 15 billion dollars, by 2025 this will have risen to 335 billion dollars, so half of the revenues in these markets will go to companies with a sharing-based model."
From Part 02
j

Sharing Economy: Market Snapshot 2017

juniperresearch.com
Publication Year: 2017
p

The Sharing Economy

pwc.com
Publication Year: 2015

Millennials Drive The Sharing Economy

forrester.com
Publication Year: 2018

Infographic: The Sharing Economy

entrepreneur.com
Publication Year: 2017

Bank of America Merrill Lynch predicts enormous growth in the sharing economy

thefuturescentre.org
Publication Year: 2017

A Primer On The “Global Sharing Economy” In 20 Charts

zerohedge.com
Publication Year: 2017
j

SHARING ECONOMY Opportunities, Impacts & Disruptors 2017-2022

juniperresearch.com
Publication Year: 2017

CAGR Calculator and Formula

vertex42.com