Collaborative consumption: the end of ownership?

The market in sharing goods is now estimated to be worth US$785bn, with everything from cars, homes, fashion, skills and information up for grabs. Vision explores the new sharing economy and why, far from being just a fad, this could be the business model of the future

On 14 November 2012, the world’s first Global Sharing Day celebrated collaborative consumption. Listed by TIME Magazine as “One of the 10 ideas that will change the world,” collaborative consumption is a fast-growing social and economic movement, which aims to unlock the idle or spare capacity of under-used assets, skills, time or space.

This new culture of sharing has developed fast since the financial crisis erupted in 2007, fuelled by the rise of community networks and the environmental urgency to consume in a more sustainable fashion. The credit crunch has forced consumers to reflect upon their buying habits and realise that ownership can actually be a burden. Collaborative technology – such as social networks (which now have 1.5 billion people registered globally) – has made sharing easy by providing a medium through which people can find interested parties and exchange things.

Sharing society

Today, people trade space, time, skills and share assets. In What’s Mine is Yours: The Rise of Collaborative Consumption social innovators Rachel Botsman and Roo Rogers identify three different types of collaborative consumption. In the first, “redistribution markets”, people move their unwanted goods to other individuals and places that need them through online swap sites and gift exchanges or through neighbourhood marketplaces.

In the second, “collaborative lifestyles”, people share intangible assets, such as time, space or skills, or money – through co-working spaces, social lending, crowdfunding and food-sharing networks.

Lastly, in “product service systems” people or organisations can pay for the benefit of using a product instead of owning the product outright – thus disrupting traditional industries based on models of individual private ownership. Hiring items may not be new, but there is a greater diversity of things on offer than ever before, including goods, toys, fashion and movie rentals.

Likewise car sharing (or carpooling and lift sharing, as it is also known) is not new. In 1942 gas was rationed in the US and carpooling was encouraged in what is one of the first modern collaboration networks. The car sharing movement faded after the end of the second world war but then re-emerged as oil crises in the seventies caused energy prices to rise and forced people to travel together to reduce costs. It has enjoyed a renaissance in the past decade due to the high price of oil and increasing concerns about climate change.

Instead of driving an empty car people can share their journey with others, which results in multiple financial, environmental and social benefits. Europe’s largest carpooling network, carpooling.com, says that approximately 3.5 million people are currently registered for carpooling in 5,000 cities across 45 countries. Since the site was created by three German students in 2001, the company estimates that it has helped save one million tons of carbon emissions, saved its users over US$2bn, as well as created thousands of friendships – and more than 16 marriages.

“You always meet people with great stories,” says Pawel Adamczyk, a Carpooling.com user. “Before you realise it, you’ve arrived at your destination and a six-hour drive seems like only an hour. By the time I got from Munich to Budapest (a seven-hour ride) I knew all the best places to visit and eat in town.”

Collaborative economy

Car sharing is enjoying such success that in early January this year, Avis Budget, the world’s number three car-hire company, agreed to buy car sharing club Zipcar for US$500m, paying a 50 per cent premium. Was Avis succumbing to the fad, or was the transaction a visionary move? Probably the latter if forecasts about the growth of the collaborative economy are to be believed. The figures are staggering.

“The sharing economy is estimated to be worth around US$500bn globally. Just in the UK alone, the sharing economy currently represents 1.3 per cent of GDP, and is predicted to rise to 15 per cent of GDP within five years. It’s an early-stage market but with huge growth potential,” says Benita Matofska, founder of The People Who Share.

The not-for-private-profits social enterprise was founded in the UK in January 2011. It orchestrates large-scale communication campaigns to raise awareness about sharing. The organisation introduced the first National Sharing Day in Britain in June last year, followed by the first Global Sharing Day on 14 November 2012. With the help of 161 partners, the campaign reached over 60 million people in 147 countries.

“I’ve had people calling from as far as the Philippines asking us how to organise a local sharing day,” Matofska proudly says. For the next edition of Global Sharing Day on 2 June 2013, the People Who Share plan to reach a world-record for the largest number of people sharing food. “The Big Lunch in the UK will see around 8.5 million people have lunch with their neighbours,” Matofska explains.

The social entrepreneur and self-styled sharing evangelist says she is passionate about social business. “We know that the world has an increasing population – another three billion will be joining us by 2050 – and we have finite resources, so we are going to need to share to survive,” she warns. From a corporate perspective, the same applies: “The businesses of the future will be those that build their business around the sharing of resources and that are sharing in every respect: to their supply chains, to their manufacturing, to their distribution. A sustainable brand is a sharing brand.”