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The rise of the 'sharing economy'

Published: Tuesday, Oct. 16 2012 12:04 p.m. MDT

SALT LAKE CITY — Sharing. It's a simple idea, something we all learn in kindergarten. While the notion is nothing new, a slew of social startups are applying the concept in ways that just might change the very nature of business. Collaborative consumption, access over ownership, peer-to-peer — regardless of the nomenclature, an economy of sharing is spreading fast.

By now, most people are familiar with Craigslist, a classified advertisements website serving more than 700 cities in 70 countries. Take the Craigslist model of providing an online space for people to post items or services they want to buy, sell or give away. Then customize that model to specific industries, add some mobile apps and the result is companies such as Airbnb, RelayRides and Threadflip, which facilitate peer-to-peer markets for accommodations, car rentals and the resale of high-end fashion products.

A recent article in the Christian Science Monitor highlights three general business models used in the "sharing economy." The first is similar to a traditional corporate rental model in which a company, such as Zipcar, owns assets (e.g., cars) and rents them out to customers who value access to experiences over ownership of things. The second model involves peer-to-peer exchanges where an individual, rather than a corporation, owns an asset (say, a boat) and rents it out to another individual, usually for a relatively limited period of time. In the third model, no exchange of money takes place. A service or asset, such as a couch to sleep on, is offered free of charge.

As a story in Fast Company points out, the “access over ownership” model has always had a place within the larger economy. Laundromats and video rental stores are two examples. The peer-to-peer model has existed in such forms as bake sales and ski swaps, and the free-exchange model has been around as long as neighbors have been lending each other cups of sugar. The difference now is that technology has enabled the exchanges to take place on a much broader scale and in a de-institutionalized and individualized manner, most often between perfect strangers.

David Ward is a writer living in Salt Lake City. Contact him at davidbward@gmail.com

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