Why own it? Share it!

The so called sharing economy is said to be one of the 10 Ideas that will change the world according to Time Magazine. Rachel Botsman, one of the thought leaders of this concept, expects that collective consumption transforms the way we live, work and consume. Besides that the world’s largest computer expo ‘CeBIT’ in March 2013 has selected ‘Shareconomy’ as keynote theme.

But what is really innovative or even revolutionary about this upcoming trend?

First it should be mentioned that the idea of sharing itself is not new at all. Probably it exists as long as human beings have social interactions with each other. So before the Internet got invented there were already neighbors sharing their lawn mowers, travelers sharing a car and students sharing a flat. What distinguishes these older forms of collective consumption from the new-emerged culture of sharing is that it is online-based. The Internet functions as a platform that enables people to organize their deals easier and cheaper than ever before. It brings together owners and borrowers even if they never met before and puts the relationship between demand and supply on a new groundwork. The emergence of social networks (especially facebook) and the mobile Internet promoted the development of the sharing economy. The rise of social media got people used to share experiences, thoughts, pictures or videos online with friends, followers or even strangers. By this people became more comfortable with the concept of meeting new people and sharing content with them using technology. Smartphones on the other hand flexibilize and mobilize the act of sharing. To illustrate how the ‘shareconomy’ works, there should be given some examples:

One of the most prominent sharing services is Airbnb. It is a marketplace, where people can rent their accommodation to travelers – from a spare bed to an entire mansion. Anyone looking for a place to stay can enter their dates and destination and browse matching offers. The advantages for the owner are quite obvious: He receives a rental fee. So he can make money with his accommodation even when he is not using it himself, for example when he is out of town. The motivations of the renters are more diverse: On the one hand they can save money, because in most cases a stay in a private offered place might be cheaper than one night in a hotel. On the other hand it may also be part of the lifestyle of young, urban hipsters who prefer paying money to online-peers rather than to a big hotel company.

The case of Airbnb not only shows, how the concept of sharing on the Internet works, but also that companies can make a lot of money by applying it as a business idea. Since the establishment of Airbnb in 2008 about 4 Million People found places to stay – 2.5 Million alone in 2012. With every rent the company receives 9-15% of the rental fee. Forbes Magazine calculates that this produced revenue of estimated 150 Million US Dollar in the last year. Besides that other big business players discovered the economic potential of ‘shareconomy’ and try to participate. For instance Daimler offers Smarts in big cities in Germany and North America for sharing. The conventional car-rental firm Avis recently acquired the American carsharing-company ZipCar for more than 500 Million US Dollar. Forbes Magazine estimates 3.5 Billion US Dollar will flow through the sharing economy this year. All this illustrates that ‘shareconomy’ already has become and will increasingly be a relevant economic factor.

The sharing economy is not only restricted on the share of material objects. The Internet also provides a marketplace for people to offer their manpower to anybody who needs it. This is what the online platform TaskRabbit is dealing with. Busy people that are short on time or just not talented enough can post their tasks that need to be done. Others can offer their special abilities and take care for these jobs by earning some money the same time. The tasks can vary from pet sitting or house cleaning to the assembly of IKEA furniture. 

Airbnb, Carsharing and TasRabbit are only three examples for a bigger development in general. Especially after the start of the global financial crisis in 2008 there seems to be a new Zeitgeist evolving that promotes the business model of the sharing economy. Consumers no longer want to stay in their passive role and get exploited by the big players in global economy. This development gave rise to a big number of start-ups in the last few years. Nowadays it seems like there is a platform on the Internet for simply all kind of things that can be shared, swapped or lend:

“We are sharing our cars on WhipCar, our bikes on Spinlister, our offices on Loosecubes, our gardens on Landshare. We are lending and borrowing money from strangers on Zopa and Lending Club. We are trading lessons on everything, from sushi-making to coding on Skillshare, and we are even sharing our pets on DogVacay” (Rachel Botsman)

However Rachel Botsman, co-author of the book “What'sMine Is Yours: The Rise of Collaborative Consumption”, claims that the biggest impact of ‘shareconomy’ on society is a social one. By sharing things people get in contact and build up trust in each other. According to this Botsman prognosticates that reputation will be a more powerful currency than our credit history in the 21^st century. This is the case because all sharing platforms are based on the idea that their participants trust each other. If you want to share your flat on Airbnb for instance, you want to make sure that it does not look like a Rock ’n’ Roll-band was partying in there. And your IKEA-shelf should not break down after it got assembled by a TaskRabbit. So reviews made by other users are important and reflect the trustworthiness of owners or borrowers.

 Conclusion 

Sharing assets seems to be one of the biggest recent trends on the Internet. Especially in the United States it already has become a big deal and the sharing economy is a profitable business for many innovative start-ups. Still the question remains, if ‘shareconomy’ leads to a higher degree of sustainability. This is empirically not validated and maybe the rise of the sharing economy also motivates people to consume even more. This can be the case if people invest money in things which they expect to be highly valuable on the sharing market. Platforms like RabbitTask carry the risk that people in need for the money undercut themselves and so a modern form of slavery emerges. To avoid this there needs to be some regulation by the platform or even the state to protect the "rabbits" from getting exploited.

In general I presume the positive aspects of collective consumption outweigh the potential disadvantages. So start becoming a part of the online sharing society: "Stop owning, start sharing!"