“Younger people don’t look forward to buying a car. The cost of ownership of a car is really expensive, so a lot of people are veering away from owning a vehicle and moving towards ridesharing services and public transportation.” Daniel Kim, CEO of Lit Motors (TheAtlantic.com, January 10, 2013)


Description

Since its launch in 2008, more than 4 million people have used Airbnb as hosts or guests—2.5 million of them in 2012 alone, said The Economist, while the 3-year-old ride-sharing service Uber charted an eye-popping valuation of up to $18.2 billion, after closing a venture capital round that raised $1.2 billion. By Forbes’ numbers, Uber is now worth more than Avis and Hyatt combined. This is reflective of a spectacular momentum around the “sharing economy”, according to which people rent beds, cars, boats and other assets directly from and to each other, with co-ordination handled through online platforms.

Since its launch in 2008, more than 4 million people have used Airbnb as hosts or guests—2.5 million of them in 2012 alone, said The Economist, while the 3-year-old ride-sharing service Uber charted an eye-popping valuation of up to $18.2 billion, after closing a venture capital round that raised $1.2 billion.

New sharing sites let individuals act as an ad hoc taxi service, car-hire firm or boutique hotel in the way, place and time that suit them. Access to things is replacing ownership as consumers favor the satisfaction of an immediate need and thus reduce waste of time and money. Consumers now also offer something that they own in exchange for a nominal rent with the aim of maximizing the life of an object. After the go has been given by online peer-to-peer services such as Airbnb, SnapGoods, Getaround in the U.S. or Blablacar and Travelcar in France, a myriad of other similar marketplaces have followed the path. Rachel Botsman, the author of book What’s Mine Is Yours: The Rise of Collaborative Consumption (HarperCollins Business, 2011), says the consumer peer-to-peer rental market alone is worth $26 billion. Consumers are strongly disrupting their habits in giving birth to a new economic model of collaborative consumption, which is even becoming a new consumer mindset. And this mindset has touched almost every category, including transportation, fashion, retail and travel, and is spreading its wings wider.

Factors

The global economic crisis has forced consumers to consider smarter ways to spend their money, and meanwhile people are increasingly showing distance from ownership. The big change is the availability of more data about people and things, which allows physical assets to be disaggregated and consumed as services. Virtualization and cloud services have reduced transaction costs, making sharing assets cheaper and easier than ever—and therefore possible on a much larger scale.

The phenomenon is more popular among Millennials, according to the Nielsen 2013 Global Survey of Shared Communities – 18% of young adults in North America, 28% in Latin America and 17% in Europe, against the global average of 35%, were willing to participate.

Value is now found in redundancy, and efficiency of a single asset has multiplied massively. More than that, consumers can access these resources when they need them, and pay only for what they use. In doing so, they avoid heavy upfront investments as well as asset underutilization. The phenomenon is more popular among Millennials, according to the Nielsen 2013 Global Survey of Shared Communities – 18% of young adults in North America, 28% in Latin America and 17% in Europe, against the global average of 35%, were willing to participate. But mid-life -consumers aged 35 to 64 years are not completely cold to the idea, with global averages of 17% for 35- to 49-year-olds and 7% for 50- to 64-year-olds. Latin America has the highest percentage (22%) of 35- to 49-year-olds who are willing to participate in a sharing community. Sharing platforms help people create wealth from underused and excess assets —such as cars, houses and their own spare time — and in the process provide great customer experiences that are antithetical to the ‘traditional’ big corporate model, embracing the personal and social to the point where trust, not size, is the underlying measure of quality.

Drivers

What drives people to adopt such “sharing “ or “collaborative” consumption mainly comes from the need to save money in these tough economic times. One the one hand, owners make money from underused assets: Airbnb says hosts in San Francisco who rent out their homes do so for an average of 58 nights a year, making $9,300; car owners who rent their vehicles to others using RelayRides make an average of $250 a month; some make more than $1,000. On the other hand, renters pay less than they would if they bought the item themselves, or turned to a traditional provider such as a hotel or car-hire firm. Almost half of young adults in Asia-Pacific (49%) and Middle East/Africa (45%) expressed willingness to participate in a sharing economy. Large percentages of global young adults are more likely to use or rent products and services from a sharing community to save money and curb wastage, according to the Nielsen 2013 Global Survey of Shared Communities, while 68% of global respondents said they were willing to share their personal assets for financial gain. This includes sharing or renting household power tools, sports equipment or any electronics that are used only occasionally. Second, there are environmental benefits: renting a car when you need it, rather than owning one, means fewer cars are required and fewer resources must be devoted to making them. Third, staying at someone’s place or sharing a ride in someone else’s car is also a good way to meet new people and socialize. Furthermore, dealing with peers brings transparency and fosters trust between people in both directions.

Large percentages of global young adults are more likely to use or rent products and services from a sharing community to save money and curb wastage, according to the Nielsen 2013 Global Survey of Shared Communities while 68% of global respondents said they were willing to share their personal assets for financial gain.

On top of the background checks carried out by platform owners, online reviews and ratings are usually posted by both parties to each transaction, and social networks’ intermediation allows participants to check each other out and identify friends in common.

Featured examples

Warm Showers

Credit: Warmshowers.org

Credit: Warmshowers.org

Think Couchsurfing for cyclists. The Warm Showers Community is a free worldwide hospitality exchange for touring cyclists. People who are willing to host touring cyclists sign up and provide their contact information, and may occasionally have someone stay with them and share great stories and a drink. The community is aptly named, seeing as warm showers are exactly what most cyclists long for after hours of biking on the road.
United-Kingdom United Kingdom, August 2013

Homejoy & Handybook

Credit: Handybook.com

Credit: Handybook.com

Consumers are getting more convenient options from the sharing economy with Homejoy and Handybook. These companies offer on-demand home cleaning services from prescreened independent providers. Customers use their smartphones to book and manage short-notice and recurring appointments, and they make payments the same way. San Francisco-based firm Homejoy has grown to more than 30 cities in the US, Canada and the UK. Cleaners are interviewed, certified and insured by the company, and receive $15 per hour from the $20-an-hour flat-rate cleaning charge. Handybook is based in New York and offers home cleaning and basic handyman services at varying rates. Customers can request a specific cleaner if they’re impressed with that person’s work.
Global, June 2014

Office Riders

Credit: OfficeRiders’ Facebook Page

Credit: OfficeRiders’ Facebook Page

OfficeRiders rethinks working spaces and introduces an economically meaningful way to optimize the use of resources. Their goals is ensuring an inspiring and convenient working style while enabling peers to benefit from each other through sharing. Based on the idea that many people are struggling to find a convenient and affordable space to work in and the notion that leaving your flat empty while not using it is a waste of space and money, the France-based platform lets you rent your private space to workers and businesses, whenever you don’t use it.
France France, June 2014

Bliive

Credit: Bliive.com

Credit: Bliive.com

Exchanging experiences is the basis of Bliive (pronounced “believe”), a social network with more than 14,000 listed users. Bartering on Bliive is done through TimeMoney, the website’s virtual currency. One coin in this currency equals one hour of the volunteer’s time. If a volunteer offers one hour of guitar lessons on the website, he can exchange this one hour for a service of his choice. The list ranges from quantum mechanics lessons and biking lessons to keeping company at parties, attending political rallies and playing board games.
Brazil Brazil, March 2014

Exchange skills online

Credit: 58.com

Credit: 58.com

In China, with JNJHW.com, and well-known information-providing websites such as Ganji.com and 58.com, more and more young Chinese white-collar professionals and college students in their 20s and 30s enjoy exchanging skills online for various benefits such as quick learning, saving money and making like-minded friends.
China China, July 2013

Bannerman

Credit: Getbannerman.com

Credit: Getbannerman.com

Bannerman is an online platform that connects people that need to book security personnel. This on-demand service aims to fix the painful process of booking security by streamlining it into a process that takes only a few minutes. The San Francisco based company has provided top of the line security for art galleries, offices, bars, nightclubs and breweries. They’ve handled all different types of events, including fashion shows, birthday parties, launch parties, block parties and festivals. Clients can book security online at a flat rate; the platform ensures the highest quality of hassle-free service since all of the guards have valid guard cards and have passed background checks by the FBI and the Department of Justice.
United States of America United States, June 2014

Cohealo

Credit: Cohealo.com

Credit: Cohealo.com

US software platform Cohealo isn’t a traditional medical device company: billed as the “Uber for medical devices”, they enable unparalleled levels of collaboration in health systems, dramatically increasing equipment utilization to improve revenue, profit and patient care. After having identified the use of non-emergency medical equipment as a largely inefficient and wasteful area, the team has developed a set of technology tools aiming to help hospitals fully utilize their medical equipment. For instance, tools inform hospitals when it’s the right time to move expensive medical technology between locations.
United States of America United States, October 2013

Business & Marketing guidelines

1

Consider how you can partner with a sharing-based business in your industry to reach new audiences – or how you can enable the sharing of your product or service on your own terms.

2

Build meaningful product stories along with peer-to-peer systems, such as denim brand APC, in order to gain consumer loyalty.

3

Register the new cultural platforms grabbing consumers’ imaginations, and appropriate the best bits.

4

Use trade-ins and up initiatives to deal directly with the customer, helping to build trust and keep resale revenues within brands’ own reach.

Summary

  • There is spectacular momentum around the “sharing economy”. Access to things is replacing ownership as consumers favor the satisfaction of an immediate need.
  • Virtualization and cloud services have reduced transaction costs, making sharing assets cheaper and easier than ever—and therefore possible on a much larger scale.
  • Value is now found in redundancy, and efficiency of a single asset has multiplied massively. More than that, consumers can access these resources when they need them, and pay only for what they use.What drives people to adopt such “sharing “ or “collaborative” consumption mainly comes from the need to save money, curb wastage, promote environmental benefits, and the will to meet new people and socialize.
  • Large percentages of global young adults are more likely to use or rent products and services from a sharing community to save money and curb wastage, according to Nielsen 2013 Global Survey of Shared Communities, while 68% of global respondents said they were willing to share their personal assets for financial gain.

Experts that we recommend

anne-sophie-novel Anne-Sophie Novel
French journalist, social collaborative economy specialist & founder of blog De moins en mieux
nicolas-bard Nicolas Bard
French founder of coworking & comaking space Ici Montreuil
jacques-attali Jacques Attali
French economist, philoshoper & author of book Pour une économie positive (Fayard, 2013)
rachel-botsman Rachel Botsman
American author of book What’s Mine Is Yours: The Rise of Collaborative Consumption (HarperCollins Business, 2011)
jeremiah-owyang Jeremiah Owyang
Chief catalyst & founder of Crowd Companies, which focuses on how large companies tap the collaborative economy, maker movement, and customer collaboration.