Collaborative consumption on the rise around the world as experts debate how large the practice will grow
SALT LAKE CITY – With three children under the age of 4, Lindsay Evans of Milwaukee has her hands full, oftentimes in the most literal sense. Just keeping her kids clothed is nothing short of a production, both logistically and financially.
“Kids grow fast,” says Evans, who quit work to stay at home with her children. “With three, I can’t afford to buy all of them brand-new clothes that they’re going to outgrow in six months.”
So when a friend introduced Evans to thredUP six months ago, it sounded like a godsend. ThredUP, an online consignment store, enables families to buy and sell secondhand children’s clothing without having to click kids into car seats or push doublewide strollers past thrift-store racks. It’s also part of a growing movement called collaborative consumption, sometimes also referred to as the sharing economy.
Last year, Time Magazine named collaborative consumption one of the 10 ideas that will change the world. Rachel Botsman, whom the Wall Street Journal has called “the doyenne of the movement,” is on the record saying, “I really believe the Collaborative Revolution could be as big as the Industrial Revolution.” She predicts the sharing economy will grow to more than $100 billion.
With no shortage of promoters, some are wondering what lies behind, and beyond, the hype.
Collaborative consumption is nothing new, of course. From ski swaps to laundromats, Americans have been sharing, bartering, renting and trading since John Hancock signed the Declaration of Independence with a borrowed pen. However, technology has enabled peer-to-peer exchanges to take place on a much broader scale. Think of that American institution, the garage sale. Ten or 15 years ago, it occurred outside with perhaps 50 neighbors in a front yard on a sunny Saturday morning. Thanks to Craigslist, Ebay and other similar websites, garage sales now occur everyday, rain or shine, with potentially thousands of people from all over a city, or even country, viewing pictures and descriptions of secondhand goods online.
Other shared-access applications abound. Want to rent out your car or borrow someone else’s? For that, there’s RelayRides. Going on vacation and want to stay among locals? How about Airbnb (as in, “air bed and breakfast”)? In fact, you can also use the website to rent out your own house while you’re gone. A new sharing model seems to sprout up each week, whether it’s for crowd funding startups, sharing workspace or splitting garden plots.
The mother of (re-)invention
Some argue the increase in sharing is due mostly to the poor economy. Scarred credit histories, unemployment and the rising costs of food, education, cell phones and transportation are forcing some to put off ownership of items they might otherwise have purchased by now.
Fleura Bardhi, associate professor of marketing at Northeastern University, believes that participation in the sharing economy “is basically a temporary stage in people’s lives.” Bardhi studies collaborative consumption and recently completed a study on the users of Zipcar, a national car-sharing company based in Cambridge, Mass.
“The metaphor a lot of these people use for ownership is marriage,” she says, "while the metaphor they use for sharing is dating. They’re at a stage in their lives where they don’t have to commit. They all said, ‘Once I settle down then I’m buying my own car. There’s nothing like having your own car.’”
However, the real motivation goes beyond thrift, in Bardhi’s opinion. The marketing of shared-access as “cool” (Rachel Botsman has called it “more hip than hippie”) enables young people to use it as an “identity play” within the context of the consumer society.
Traditionally, sharing has been stigmatized in the U.S., but since it's now seen as fashionable, people can self-identify as collaborative consumers without losing status in the marketplace. “Being frugal is not necessarily an end itself,” Bardhi says, “but rather a mechanism in this identity play. It's more about the mode of consumption than careful management of resources."
Bardhi has seen this behavior among thrift shoppers she’s studied. “I had consumers who would spend $300 on one thrift shopping trip. This was basically a way for them to indulge their desires. People go thrift shopping not necessarily because they want to save money but because they want to spend money.”
Sharing is caring
Chelsea Rustrum of San Francisco is writing a book about the sharing economy titled "It’s a Shareable Life." On her website, the book is billed as a “practical guide on how to use and benefit from sharing your car, home, skills and resources.” Naturally, it’s a collaborative effort between multiple authors.
Rustrum, a marketing and community strategist, believes that collaborative consumption can help stem the tide of hyper-consumption. She emphasizes the movement’s social benefits over its economic ones. “My opinion is that people will start sharing to save or make money,” she says, “but they’ll come back to it and be excited about it because it feels good. They’ll think about other ways they can tap into it.”
For Rustrum, sustainability and a sense of community are at the heart of collaborative consumption. “I really like the idea of utilizing spare capacity. And the sense that we’re all in it together is really powerful. It has the potential to change the way we do business and the way we respond to each other and trust each other.”
For her part, Bardhi isn’t sold on the community pitch. “You have a lot of media generating a lot of buzz for this practice, promoting it in terms of moral and social considerations, and that’s been great for the adoption of the practice itself. But in the case of Zipcar, at least, this is pretty much a market system. It’s not driven by environmental concerns. Users’ motivations are primarily utilitarian and have more to do with one-to-one reciprocity. The market logic dominates.”
At least one commentator has referred to collaborative consumption as the occupation of big business. However, some shared-access companies are beginning to look more and more like big businesses themselves. Airbnb is in discussions to take on an additional $150 million in venture capital, which would place its value near $2.5 billion, and it recently hired a former senior member of Yahoo’s legal team. The company takes roughly 10 percent of each transaction, yet Airbnb users do most of the work, providing both the supply of and demand for rooms. Users booked 10 million nights in June alone.
“Suddenly there’s a profit involved,” Bardhi says. “You have the market entering a sphere which wasn’t market-mediated before.”
Further undercutting the idea of community is the rise of “reputation capital,” the social version of a credit score. It has developed out of the need to address the misgivings inherent in a situation where strangers are doing business with one another.
The old model of sharing typically involved face-to-face interaction, often between friends or neighbors. For example, when you needed a drill to put up a towel rack, you walked around the corner and talked to Ralph, who had a garage full of power tools. Borrowing was merely one part of a larger relationship that existed before and continued beyond the act of sharing.
Many of the new sharing applications, contrary to creating community, actually reinforce a type of “lonely consumption” in which transactions take place between two avatars in cyberspace.
Keith Harper, a graphic designer and product developer, helps run a collaborative workspace in Seattle. He’s used various shared-access services, including Zipcar, Airbnb and Kickstarter, and recognizes the potential of collaborative consumption while also acknowledging that the element of community is sometimes missing.
“I love the idea of collaborative consumption,” Harper says. “If you have 10 people who all share one product, then that’s huge. It contributes less to landfills, regardless of who owns it. If you can integrate more human interaction somehow, then it will be all the better. It will enrich people’s lives.”
David Ward is a writer living in Salt Lake City. Contact him at email@example.com.
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