Today, rather than shelling out for high worth and of-the-moment convenience products, consumers are favouring sharing and renting everything on an ad-hoc basis – from homes, cars and land to umbrellas, clothes and washing machines.
The consumer peer-to-peer rental market alone is worth $26 billion (Economist). But the collaborative economy isn’t just about individuals – many companies are renting space and idle machines too.
The fundamental consumer group driving forth and utilising the sharing economy is the young, with 48% between the ages of 18 and 34 (Vision Critical).
Despite the advantages of money saving, flexibility, reduced responsibility, increased accessibility and increased convenience, what’s key about this new sharing economy and its millennial driving group is collaboration.
A central characteristic to this consumer group is their entrepreneurialism. Economic downturn has resulted in boosted levels of self-employment. As a result, the line between office and home has blurred and consumers are looking for additional streams of income.
The sharing economy has brought a lot of new enterprise opportunity. Many consumers have purchased property and cars for the sole purpose of renting via sharing economy networks, for either extra income or sole source of income. Car owners who rent their vehicles using RelayRides make an average of $250 a month; whilst some make more than $1000 (Economist).
Airbnb is the most primary and prominent example of this huge new sharing economy, which, now many entrepreneurs have piled in, has developed and spread across a variety of sectors and categories.
Rentez-Vous is an online service that allows fashionistas to list and rent fashion items in London and Paris with ease and convenience.
The network allows fashion hungry users that quickly get bored of expensive pieces to avoid having high worth pieces hanging in their wardrobe for evermore, to keep their wardrobes fresh, save money and avoid wasting resources.
Similarly, SnapGoods is a sharing platform for high-end household items such as cameras, kitchenware, and musical instruments that are little used by one owner.
Umbrella Here is a Hong Kong based group that’s encouraging users to ‘light up their umbrella for sharing’ using an LED signaling device placed on the top of their umbrella. The smart device controlled by iPhone signals to nearby people that an umbrella is available for sharing (just like a taxi). The initiative is on a mission to spark a change in communities – pushing the notion that people from all walks of life should be connected to help each other in simple ways in an otherwise lonely world.
The key aspect about Umbrella Here is connectivity – the sharing platform allows people to track down friends made using the time and location they shared an enjoyable walk and a chat via the website.
Along with GPS tracking and online payment systems, the big opportunity is the increased availability of data on consumers the Internet brought. Before the web, renting a power tool from a stranger was feasible, but usually more trouble than it was worth. Online reviews, ratings and reputation systems have created ways to establish and communicate standards of trust, reputation and privacy, paving the way for new sectors to join the sharing economy.
Truster.org is one of many new free online reputation-monitoring systems. It utilises the latest identification technology to identify Internet users and publishes those users’ ratings and feedback worldwide.
DogVacancy is a good example of how web monitored reputation is key to the success of sharing platforms. Dogvacancy allows dog owners to select well rated ‘dog sitters’, to whose houses they can take their dogs to be taken care of. The service is cheaper than kennels, not to mention much more homely, comfortable and accommodating.
Breather allows people to find unused urban spaces to rent for as little as 30 minutes to recharge or work in, whilst Fon enables them to connect to the Internet in order to do so. Subscribers to Fon share some of their home WiFi in return for getting free Wi-Fi from anyone of the 13 million people in the network.
Services such as RelayRides, which enables pre-screened users to list and rent idle vehicles are partially driven by financial and environmental pressures – sharing services like these mean less congestion, less pollution and fewer resources used to make vehicles.
Many large companies are now experimenting with service-based models not just to guard against risk, but because they’re coming to realise that service innovation is a strong differentiator in the market place.
BMW has tapped into the sharing economy trend, teamed up with car rental firm Sixt and created a new revenue stream with its DriveNow car sharing service. Users can locate the latest BMWs through a sophisticated smartphone app, pay for the time used and return the car to any parking space. As in the past, these new procedures of consumption will not banish old economic models entirely – but they will certainly change them. We’re seeing a big shake up in the industries of transport, tourism, and equipment-hire among many more. The consumer need has shifted from ownership to experience and access to the end result.
This consumer trend was explored by, Sarah Robinson.
Subscribe to Mapº to receive issue 20, covering our Single Living trend, and also to gain access to our previous issues.