The Sharing Economy

There's a piece in the NY Times this weekend about Lyft and Sidecar changing the dynamics in the Los Angeles taxi market. Get ready to read lots more pieces like this in the coming years.

The internet, mobile phones, native transaction systems, and a global network that connects billions of people in real time are changing a lot of things and assets that sat wasting are now going to get activated.

None of this is news for readers of this blog. In fact, this is all old news. But I think we are just seeing the start of this trend.

Let's look at self driving cars, another topic that the NY Times wrote about recently. Maybe we won't all own one of them. Maybe investors will own them and put them into networks like Lyft and Sidecar which will then dispatch them to pick us up and take us where we want to go. Self driving cars may turn out to be more like income producing homes, apartments, and oil wells than something that sits in your garage.

Investing in the networks that light up the sharing economy, like Airbnb, Lyft, Sidecar, and many others certainly looks like a good idea. But they may just be opening up a massive new investment market in physical assets that produce income. We are seeing lenders move their money from banks and bonds to peer lending markets like our portfolio companies Lending Club, Funding Circle, and Auxmoney. I think in time investors will move their capital into the assets that power the sharing economy as well. And that may turn into a very large capital asset class.

#hacking finance