diff --git a/dvc/cache.py b/dvc/cache.py
--- a/dvc/cache.py
+++ b/dvc/cache.py
@@ -46,6 +46,7 @@ def __init__(self, repo):
             cache_dir = config.get(Config.SECTION_CACHE_DIR, default_cache_dir)
             cache_type = config.get(Config.SECTION_CACHE_TYPE)
             protected = config.get(Config.SECTION_CACHE_PROTECTED)
+            shared = config.get(Config.SECTION_CACHE_SHARED)
 
             settings = {
                 Config.PRIVATE_CWD: config.get(
@@ -54,6 +55,7 @@ def __init__(self, repo):
                 Config.SECTION_REMOTE_URL: cache_dir,
                 Config.SECTION_CACHE_TYPE: cache_type,
                 Config.SECTION_CACHE_PROTECTED: protected,
+                Config.SECTION_CACHE_SHARED: shared,
             }
 
         self.local = Remote(repo, **settings)
diff --git a/dvc/config.py b/dvc/config.py
--- a/dvc/config.py
+++ b/dvc/config.py
@@ -160,6 +160,8 @@ class Config(object):  # pylint: disable=too-many-instance-attributes
     SECTION_CACHE_TYPE = "type"
     SECTION_CACHE_TYPE_SCHEMA = supported_cache_type
     SECTION_CACHE_PROTECTED = "protected"
+    SECTION_CACHE_SHARED = "shared"
+    SECTION_CACHE_SHARED_SCHEMA = And(Use(str.lower), Choices("group"))
     SECTION_CACHE_LOCAL = "local"
     SECTION_CACHE_S3 = "s3"
     SECTION_CACHE_GS = "gs"
@@ -177,6 +179,7 @@ class Config(object):  # pylint: disable=too-many-instance-attributes
         Optional(SECTION_CACHE_DIR): str,
         Optional(SECTION_CACHE_TYPE, default=None): SECTION_CACHE_TYPE_SCHEMA,
         Optional(SECTION_CACHE_PROTECTED, default=False): BOOL_SCHEMA,
+        Optional(SECTION_CACHE_SHARED): SECTION_CACHE_SHARED_SCHEMA,
         Optional(PRIVATE_CWD): str,
         Optional(SECTION_CACHE_SLOW_LINK_WARNING, default=True): BOOL_SCHEMA,
     }
diff --git a/dvc/remote/base.py b/dvc/remote/base.py
--- a/dvc/remote/base.py
+++ b/dvc/remote/base.py
@@ -1,7 +1,7 @@
 from __future__ import unicode_literals
 
 from dvc.ignore import DvcIgnore
-from dvc.utils.compat import str, basestring, urlparse, fspath_py35, makedirs
+from dvc.utils.compat import str, basestring, urlparse
 
 import os
 import json
@@ -20,7 +20,14 @@
     DvcIgnoreInCollectedDirError,
 )
 from dvc.progress import progress, ProgressCallback
-from dvc.utils import LARGE_DIR_SIZE, tmp_fname, to_chunks, move, relpath
+from dvc.utils import (
+    LARGE_DIR_SIZE,
+    tmp_fname,
+    to_chunks,
+    move,
+    relpath,
+    makedirs,
+)
 from dvc.state import StateNoop
 from dvc.path_info import PathInfo, URLInfo
 
@@ -202,6 +209,7 @@ def get_dir_checksum(self, path_info):
         checksum, tmp_info = self._get_dir_info_checksum(dir_info)
         new_info = self.cache.checksum_to_path_info(checksum)
         if self.cache.changed_cache_file(checksum):
+            self.cache.makedirs(new_info.parent)
             self.cache.move(tmp_info, new_info)
 
         self.state.save(path_info, checksum)
@@ -348,7 +356,7 @@ def changed(self, path_info, checksum_info):
         logger.debug("'{}' hasn't changed.".format(path_info))
         return False
 
-    def link(self, from_info, to_info, link_type=None):
+    def link(self, from_info, to_info):
         self.copy(from_info, to_info)
 
     def _save_file(self, path_info, checksum, save_link=True):
@@ -356,6 +364,7 @@ def _save_file(self, path_info, checksum, save_link=True):
 
         cache_info = self.checksum_to_path_info(checksum)
         if self.changed_cache(checksum):
+            self.makedirs(cache_info.parent)
             self.move(path_info, cache_info)
         else:
             self.remove(path_info)
@@ -456,7 +465,15 @@ def upload(self, from_info, to_info, name=None, no_progress_bar=False):
 
         return 0
 
-    def download(self, from_info, to_info, name=None, no_progress_bar=False):
+    def download(
+        self,
+        from_info,
+        to_info,
+        name=None,
+        no_progress_bar=False,
+        file_mode=None,
+        dir_mode=None,
+    ):
         if not hasattr(self, "_download"):
             raise RemoteActionNotImplemented("download", self.scheme)
 
@@ -479,7 +496,7 @@ def download(self, from_info, to_info, name=None, no_progress_bar=False):
             # lets at least show start and finish
             progress.update_target(name, 0, None)
 
-        makedirs(fspath_py35(to_info.parent), exist_ok=True)
+        makedirs(to_info.parent, exist_ok=True, mode=dir_mode)
         tmp_file = tmp_fname(to_info)
 
         try:
@@ -491,7 +508,7 @@ def download(self, from_info, to_info, name=None, no_progress_bar=False):
             logger.exception(msg.format(from_info, to_info))
             return 1  # 1 fail
 
-        move(tmp_file, fspath_py35(to_info))
+        move(tmp_file, to_info, mode=file_mode)
 
         if not no_progress_bar:
             progress.finish_target(name)
@@ -756,7 +773,7 @@ def checkout(
         msg = "Checking out '{}' with cache '{}'."
         logger.debug(msg.format(str(path_info), checksum))
 
-        return self._checkout(path_info, checksum, force, progress_callback)
+        self._checkout(path_info, checksum, force, progress_callback)
 
     def _checkout(
         self, path_info, checksum, force=False, progress_callback=None
@@ -786,5 +803,5 @@ def extract_used_local_checksums(self, cinfos):
     def _changed_unpacked_dir(self, checksum):
         return True
 
-    def _update_unpacked_dir(self, checksum, progress_callback=None):
+    def _update_unpacked_dir(self, checksum):
         pass
diff --git a/dvc/remote/local/__init__.py b/dvc/remote/local/__init__.py
--- a/dvc/remote/local/__init__.py
+++ b/dvc/remote/local/__init__.py
@@ -4,13 +4,15 @@
 
 from dvc.scheme import Schemes
 from dvc.remote.local.slow_link_detection import slow_link_guard
-from dvc.utils.compat import str, makedirs, fspath_py35
+from dvc.utils.compat import str, fspath_py35
 
 import os
 import stat
+import errno
 from shortuuid import uuid
 import shutil
 import logging
+from functools import partial
 
 from dvc.system import System
 from dvc.remote.base import (
@@ -29,6 +31,7 @@
     walk_files,
     relpath,
     dvc_walk,
+    makedirs,
 )
 from dvc.config import Config
 from dvc.exceptions import DvcException
@@ -56,10 +59,19 @@ class RemoteLOCAL(RemoteBASE):
         "reflink": System.reflink,
     }
 
+    SHARED_MODE_MAP = {None: (0o644, 0o755), "group": (0o664, 0o775)}
+
     def __init__(self, repo, config):
         super(RemoteLOCAL, self).__init__(repo, config)
         self.protected = config.get(Config.SECTION_CACHE_PROTECTED, False)
 
+        shared = config.get(Config.SECTION_CACHE_SHARED)
+        self._file_mode, self._dir_mode = self.SHARED_MODE_MAP[shared]
+
+        if self.protected:
+            # cache files are set to be read-only for everyone
+            self._file_mode = stat.S_IREAD | stat.S_IRGRP | stat.S_IROTH
+
         types = config.get(Config.SECTION_CACHE_TYPE, None)
         if types:
             if isinstance(types, str):
@@ -119,10 +131,12 @@ def exists(self, path_info):
         return os.path.lexists(fspath_py35(path_info))
 
     def makedirs(self, path_info):
-        if not self.exists(path_info):
-            os.makedirs(fspath_py35(path_info))
+        makedirs(path_info, exist_ok=True, mode=self._dir_mode)
 
-    def link(self, from_info, to_info, link_type=None):
+    def link(self, from_info, to_info):
+        self._link(from_info, to_info, self.cache_types)
+
+    def _link(self, from_info, to_info, link_types):
         from_path = from_info.fspath
         to_path = to_info.fspath
 
@@ -140,11 +154,6 @@ def link(self, from_info, to_info, link_type=None):
             logger.debug(msg)
             return
 
-        if not link_type:
-            link_types = self.cache_types
-        else:
-            link_types = [link_type]
-
         self._try_links(from_info, to_info, link_types)
 
     @classmethod
@@ -156,7 +165,7 @@ def _get_link_method(cls, link_type):
                 "Cache type: '{}' not supported!".format(link_type)
             )
 
-    def _link(self, from_info, to_info, link_method):
+    def _do_link(self, from_info, to_info, link_method):
         if self.exists(to_info):
             raise DvcException("Link '{}' already exists!".format(to_info))
         else:
@@ -179,7 +188,7 @@ def _try_links(self, from_info, to_info, link_types):
         while i > 0:
             link_method = self._get_link_method(link_types[0])
             try:
-                self._link(from_info, to_info, link_method)
+                self._do_link(from_info, to_info, link_method)
                 return
 
             except DvcException as exc:
@@ -234,20 +243,17 @@ def move(self, from_info, to_info):
         if from_info.scheme != "local" or to_info.scheme != "local":
             raise NotImplementedError
 
-        inp = from_info.fspath
-        outp = to_info.fspath
+        if self.isfile(from_info):
+            mode = self._file_mode
+        else:
+            mode = self._dir_mode
 
-        # moving in two stages to make the whole operation atomic in
-        # case inp and outp are in different filesystems and actual
-        # physical copying of data is happening
-        tmp = "{}.{}".format(outp, str(uuid()))
-        move(inp, tmp)
-        move(tmp, outp)
+        move(from_info, to_info, mode=mode)
 
-    def cache_exists(self, md5s, jobs=None):
+    def cache_exists(self, checksums, jobs=None):
         return [
             checksum
-            for checksum in progress(md5s)
+            for checksum in progress(checksums)
             if not self.changed_cache_file(checksum)
         ]
 
@@ -373,7 +379,11 @@ def _process(
         )
 
         if download:
-            func = remote.download
+            func = partial(
+                remote.download,
+                dir_mode=self._dir_mode,
+                file_mode=self._file_mode,
+            )
             status = STATUS_DELETED
         else:
             func = remote.upload
@@ -487,9 +497,20 @@ def unprotect(self, path_info):
 
     @staticmethod
     def protect(path_info):
-        os.chmod(
-            fspath_py35(path_info), stat.S_IREAD | stat.S_IRGRP | stat.S_IROTH
-        )
+        path = fspath_py35(path_info)
+        mode = stat.S_IREAD | stat.S_IRGRP | stat.S_IROTH
+
+        try:
+            os.chmod(path, mode)
+        except OSError as exc:
+            # In share cache scenario, we might not own the cache file, so we
+            # need to check if cache file is already protected.
+            if exc.errno not in [errno.EPERM, errno.EACCES]:
+                raise
+
+            actual = os.stat(path).st_mode
+            if actual & mode != mode:
+                raise
 
     def _get_unpacked_dir_path_info(self, checksum):
         info = self.checksum_to_path_info(checksum)
@@ -524,8 +545,13 @@ def _create_unpacked_dir(self, checksum, dir_info, unpacked_dir_info):
                 entry[self.PARAM_CHECKSUM]
             )
             relative_path = entry[self.PARAM_RELPATH]
-            self.link(
-                entry_cache_info, unpacked_dir_info / relative_path, "hardlink"
+            # In shared cache mode some cache files might not be owned by the
+            # user, so we need to use symlinks because, unless
+            # /proc/sys/fs/protected_hardlinks is disabled, the user is not
+            # allowed to create hardlinks to files that he doesn't own.
+            link_types = ["hardlink", "symlink"]
+            self._link(
+                entry_cache_info, unpacked_dir_info / relative_path, link_types
             )
 
         self.state.save(unpacked_dir_info, checksum)
diff --git a/dvc/utils/__init__.py b/dvc/utils/__init__.py
--- a/dvc/utils/__init__.py
+++ b/dvc/utils/__init__.py
@@ -9,8 +9,9 @@
     cast_bytes_py2,
     StringIO,
     fspath_py35,
+    fspath,
+    makedirs as _makedirs,
 )
-from dvc.utils.compat import fspath
 
 import os
 import sys
@@ -26,6 +27,7 @@
 import re
 import logging
 
+from shortuuid import uuid
 from ruamel.yaml import YAML
 
 
@@ -78,8 +80,8 @@ def file_md5(fname):
             progress.finish_target(name)
 
         return (hash_md5.hexdigest(), hash_md5.digest())
-    else:
-        return (None, None)
+
+    return (None, None)
 
 
 def bytes_md5(byts):
@@ -99,14 +101,13 @@ def fix_key(k):
     if isinstance(d, list):
         return [dict_filter(e, exclude) for e in d]
 
-    elif isinstance(d, dict):
+    if isinstance(d, dict):
         items = ((fix_key(k), v) for k, v in d.items())
         return {
             k: dict_filter(v, exclude) for k, v in items if k not in exclude
         }
 
-    else:
-        return d
+    return d
 
 
 def dict_md5(d, exclude=()):
@@ -145,18 +146,44 @@ def copyfile(src, dest, no_progress_bar=False, name=None):
         progress.finish_target(name)
 
 
-def move(src, dst):
+def makedirs(path, exist_ok=False, mode=None):
+    path = fspath_py35(path)
+
+    if mode is None:
+        _makedirs(path, exist_ok=exist_ok)
+        return
+
+    umask = os.umask(0)
+    try:
+        _makedirs(path, exist_ok=exist_ok, mode=mode)
+    finally:
+        os.umask(umask)
+
+
+def move(src, dst, mode=None):
+    """Atomically move src to dst and chmod it with mode.
+
+    Moving is performed in two stages to make the whole operation atomic in
+    case src and dst are on different filesystems and actual physical copying
+    of data is happening.
+    """
+
+    src = fspath_py35(src)
+    dst = fspath_py35(dst)
+
     dst = os.path.abspath(dst)
-    dname = os.path.dirname(dst)
-    if not os.path.exists(dname):
-        os.makedirs(dname)
+    tmp = "{}.{}".format(dst, str(uuid()))
 
     if os.path.islink(src):
-        shutil.copy(os.readlink(src), dst)
+        shutil.copy(os.readlink(src), tmp)
         os.unlink(src)
-        return
+    else:
+        shutil.move(src, tmp)
+
+    if mode is not None:
+        os.chmod(tmp, mode)
 
-    shutil.move(src, dst)
+    shutil.move(tmp, dst)
 
 
 def _chmod(func, p, excinfo):
@@ -244,18 +271,15 @@ def fix_env(env=None):
 def convert_to_unicode(data):
     if isinstance(data, builtin_str):
         return str(data)
-    elif isinstance(data, dict):
+    if isinstance(data, dict):
         return dict(map(convert_to_unicode, data.items()))
-    elif isinstance(data, list) or isinstance(data, tuple):
+    if isinstance(data, (list, tuple)):
         return type(data)(map(convert_to_unicode, data))
-    else:
-        return data
+    return data
 
 
 def tmp_fname(fname):
     """ Temporary name for a partial download """
-    from shortuuid import uuid
-
     return fspath(fname) + "." + str(uuid()) + ".tmp"
 
 

diff --git a/tests/func/test_cache.py b/tests/func/test_cache.py
--- a/tests/func/test_cache.py
+++ b/tests/func/test_cache.py
@@ -1,4 +1,6 @@
 import os
+import stat
+import pytest
 import shutil
 import configobj
 
@@ -175,3 +177,27 @@ def test_relative_path(self):
 class TestShouldCacheBeReflinkOrCopyByDefault(TestDvc):
     def test(self):
         self.assertEqual(self.dvc.cache.local.cache_types, ["reflink", "copy"])
+
+
+@pytest.mark.skipif(os.name == "nt", reason="Not supported for Windows.")
+@pytest.mark.parametrize(
+    "protected,dir_mode,file_mode",
+    [(False, 0o775, 0o664), (True, 0o775, 0o444)],
+)
+def test_shared_cache(repo_dir, dvc_repo, protected, dir_mode, file_mode):
+    assert main(["config", "cache.shared", "group"]) == 0
+
+    if protected:
+        assert main(["config", "cache.protected", "true"]) == 0
+
+    assert main(["add", repo_dir.FOO]) == 0
+    assert main(["add", repo_dir.DATA_DIR]) == 0
+
+    for root, dnames, fnames in os.walk(dvc_repo.cache.local.cache_dir):
+        for dname in dnames:
+            path = os.path.join(root, dname)
+            assert stat.S_IMODE(os.stat(path).st_mode) == dir_mode
+
+        for fname in fnames:
+            path = os.path.join(root, fname)
+            assert stat.S_IMODE(os.stat(path).st_mode) == file_mode

Set correct permissions for users in a group automatically
In a shared cache directory set up, dvc fails to set the correct permissions for the folders in the cache directory. For instance,  a user X executes a dvc command - e.g `dvc pull` which sets the permission of a directory to `rwxr-xr-x`. A different user Y who is in the same group and is working with the same cache directory, is not able to delete files in this specific directory as the permission forbids it. Therefore, the user Y gets a `Operation is not permitted` error. 

With this context, a additional parameter in the the cache config like `git config core.sharedRepository group` (https://git-scm.com/docs/git-config) which addresses this problem, may a suitable solution for a working shared cache directory set up.

For a more detailed overview see the conversation in the discord channel: https://discordapp.com/channels/485586884165107732/485596304961962003

tests/func/test_cache.py::test_shared_cache[False-509-436] tests/func/test_cache.py::test_shared_cache[True-509-292]
tests/func/test_cache.py::TestCache::test_all tests/func/test_cache.py::TestCache::test_get tests/func/test_cache.py::TestCacheLoadBadDirCache::test tests/func/test_cache.py::TestExternalCacheDir::test tests/func/test_cache.py::TestExternalCacheDir::test_remote_references tests/func/test_cache.py::TestSharedCacheDir::test tests/func/test_cache.py::TestCacheLinkType::test tests/func/test_cache.py::TestCmdCacheDir::test tests/func/test_cache.py::TestCmdCacheDir::test_abs_path tests/func/test_cache.py::TestCmdCacheDir::test_relative_path tests/func/test_cache.py::TestShouldCacheBeReflinkOrCopyByDefault::test