Making money from sharing our everyday household items sounds amazing, but in reality so many factors have to align to make it work.
Rachel Botsman, author of What’s Mine Is Yours: The Rise of Collaborative Consumption puts the combination of the 2008 recession and the ubiquity of the smartphone app as the cause of the “sharing economy revolution” (1). This desire to look for creative new ways to make money with the support of ef cient peer-to-peer exchanges created an unbounded marketplace between producer and consumer, seller and buyer, lender and borrower, and neighbour and neighbour.
The potential positive impact of a fully proliferated sharing consumption system are huge, Botsman believing
that “these systems provide signi cant environmental benefits with increasing efficiency, reducing waste, encouraging the development of better designed products, and mopping up the surplus created by over-production and -consumption” (1). On top of this, she also believes that these exchanges can be the foundation to save money, space and time, make new friends and become active citizens within our communities. While all of this would be fantastic, is it an idealistic fallacy to believe that these financial, social and environmental motives could spell the end of our individualistic buying habits and make us have a completely different idea of ownership?
To truly change our deeply engrained consumption habits sharing services would need to be seamlessly utilised in all walks of our lives. Currently, a whole crop of companies are attempting to do this by building off the hugely successful model of Airbnb and Uber and allow us to share in a plethora of different ways, from renting dresses on Rent the Runway, learning new skills with Skillshare and even share your pets with DogVacay. The key though lies beyond niche areas and is to conquer the sharing of everyday household consumer products, the largest group of products owned in our lives.
The flagship example of a consumer product suitable for renting, that repeatedly comes up in publications about the sharing economy, is the power drill. Airbnb co-founder Brian Chesky cites that “there are 80 million power drills in America that are used an average of 13 minutes in their lifetime, does everyone really need their own drill?” (2). Seems ideal: the lender gets money for renting a drill they already own and the borrower doesn’t have to buy a new drill for one task — job done, everybody happy right?
A whole host of start-ups such as; Crowd Rent, Share Some Sugar, Ecomodo, SnapGoods, Thingloop etc. have tried but failed to successfully facilitate this hyper-local exchange of household goods. Founder of Neighborrow Adam Berk explains that “Everything made sense except that nobody gives a shit. They go buy a drill. Or they just bang a screwdriver through the wall” (3).
So why did an idea that seemed so useful and straight forward fail? Despite being enthusiastic about the idea, people did not really partake in the process because the sharing platforms did not understand the customer’s true desires in a service like this. Cost and convenience rule all, as soon as something does not have a competitive cost and is not easy enough to do, they won’t do it. Why travel to pick-up the rental drill, pay for it, use it, travel to take it back to the owner, when for around £25 you can just buy your own drill from Amazon and have it delivered the next day. Meeting people and being good to the environment are happy additions to the sharing process but are unlikely to beat cost and convenience for the average user. Another major issue that would concern many potential users is trust, how would it work if your item was returned damaged or broken? When speaking to the NY Times Simon Rothman a partner at Greylock Partners, whose rm were early investors in Airbnb and Facebook believes “If it isn’t a trust issue to have a stranger spend the night in your house, then it won’t be a trust issue to have a stranger rent your lawn mower” (4). This may not actually be true for many people, there is a definite difference in the way these assets are used, consumer products crucially being mostly hands on. Using the power drill example, it is not hard to imagine that someone may misuse the product and may even care less about being careful with it as it’s ‘just a rental’.
When discussing with Richard Green a Senior Consultant at Plan, a product strategy consultancy, the potential of the sharing economy model becoming prevalent with consumer goods, he believed that “it’s a niche and it shall remain a niche”. He thought that too many factors have to align for it to be convenient enough for the average person to want to partake. He thought it was important also to look deeper at the individual systems involved, for example, the much-lauded bike and car sharing schemes that are increasingly popping up in our cities are seen to be the solution to reducing emissions and getting cars off the road. The reality for car shares schemes such as Zipcar is that even if we are selling our cars to move to renting, the company still puts a fleet of new cars onto the road to fuel the service and is only making relatively slight profits doing it. Bike shares are a positive thing in many many ways but they don’t even get close to making a pro t and are only possible due to government legislation, and therefore would not work for private companies. To ensure profitability companies end up having to negate the purity of the ‘sharing’ element; if you were to rent a dress using Rent the Runway you’re more likely to be getting it from their warehouse instead of a trendy neighbour. Despite the challenges to make a profit and engage users there are still some companies traversing over the carcasses of the previously failed platforms that tried to get us to share our possessions with those around us. The forerunner being Peerby, a company founded in Amsterdam in 2012 has processed more than 100,000 transactions and has more than $1 billion worth of items in its database (3). Who knows, if they manage to tick all the boxes by creating a the ultra-efficient, safe and easy to use platform that empowers us to be micro-entrepreneurs, as Airbnb and Uber did, then it may be able to topple our environmentally crippling consumption habits. It’s a tall order, only time will tell.
(1) Botsman. R, Rogers. R (2011). What’s Mine is Yours. London: HarperCollins.
(2) Friedman. T (2013). Welcome to the ‘Sharing Economy’. Available: http://www.nytimes. com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing-economy.html?_r=0.
(3) Kessler. S (2015). e “Sharing Economy” Is Dead, And We Killed It. Available: http://www.fastcompany. com/3050775/the-sharing-economy-is-dead-and-we-killed-it/6.
(4) Morrissey. J. (2015). Sharing Economy Goes Hyperlocal With a Growing Market for Household Items. Available: http://www.nytimes.com/2015/09/03/business/smallbusiness/sharing-economy-goes-hyperlocal- with-a-growing-market-for-household-items.html.
IMAGE: Debarshi Roy. (2015). 7 ings an Entrepreneur should learn from Sharing Economy. Available: http://blog.sharingdais.com/.