COMPASS MAGAZINE #10
COMPASS MAGAZINE #10

HAND TO HAND Sharing movement gains popularity among consumers

Internet technologies have enabled the widespread sharing of digital products such as films and music. But that trend has also extended to physical items, with people choosing to share goods that include food, cars, and even real estate. Is it good for the community or a detriment to our personal space?

Social innovator Lauren Anderson describes society’s emerging propensity to share goods and services as “Collaborative Consumption.” Others call it the sharing economy, or the peer-to-peer marketplace. It is underpinned by a new generation of services like Cambridge, Massachusettsbased Zipcar (car sharing) and San Francisco, California-based Airbnb (property sharing) in the US that connect people, usually via the Internet, who are willing to share goods they traditionally have purchased outright.

“We describe Collaborative Consumption as the reinvention of the traditional business models through technology,” said Anderson, chief knowledge officer and co-founder of collaborativeconsumption.com, an online resource for the sharing community. “It enables trade and exchange on a scale and in ways that would have never been possible ten years ago. We’re really looking at how technology enables us to connect and collaborate with each other, increasing the efficiency of our consumption patterns.”

Anderson believes the key factors leading people to share rather than own include the prolonged economic downturn, increased environmental concerns, the surge in social media and mobile technologies, and a change in human attitudes: many people have become more committed to simplifying their lives by owning – and being owned by – fewer “things.”

Sharing has gained so much momentum, in fact, that it was recently highlighted in Time magazine’s feature on ten ideas that will change the world. Despite its popularity, however, critics are concerned that the movement’s personal risks may outweigh its communal benefits.

A MODERN MARKET

“Many sharing activities started as a reaction to the global financial crisis, with people all around the world realizing they couldn’t spend money the way they always have done,” Anderson said. “We lost trust in big institutions that effectively lost our money, and we came to realize that we couldn’t rely on these hierarchies to keep us afloat. We needed to return to more careful and shrewd values toward spending and saving.”

From this frugality, a thriving new industry has blossomed. Forbes reported in 2013 that “the revenue flowing through the sharing economy directly into people’s wallets will surpass US$3.5 billion this year, with growth exceeding 25%.” Rachel Botsman, the author of What’s Mine is Yours: How Collaborative Consumption is Changing the Way We Live, estimates the sharing economy may actually be worth up to US$26 billion. With such exponential economic growth, she said, the lines between ethical sharing practices and traditional business infrastructure have become increasingly blurred.

THE BIG PLAYERS

Arguably the most established niche in the sharing space is car sharing, which allows users to capitalize on the benefits of car travel without the complications and expense of ownership. Global market research and consulting firm Navigant Research predicted in a 2013 survey that the revenues of global car-sharing services approached US$1 billion in 2013 and grow to US$6.2 billion by 2020.

Sharing works differently where property is involved. Houses and apartments, whether rented or owned, tend to require an arrangement that is more permanent. But property can be shared on a short-term basis (in most cities), providing an alternative to hotels.

In 2008, San Francisco roommates decided to rent their apartment to design conference attendees. It was the beginning of Airbnb, “a trusted community marketplace for people to list, discover and book unique accommodations around the world.” Airbnb today has more than 500,000 listings across 192 countries.

Like many other online services that connect people – most notably eBay – success commonly relies on users’ inclination to be honest and trustworthy. “This new economy is going to be driven entirely by reputation, which is part of a new cultural shift – seeing how our behavior in one community affects what we can access in another,” Botsman said in a New York Times article.

Airbnb realized the hard way that trust is not always a given. In 2011, after a San Francisco resident rented her apartment out for a week and returned to find a number of her possessions destroyed or stolen, the company launched a “Trust & Safety Center” and issued a US$1 million retroactive insurance guarantee.

A FLAWED CONCEPT?

Over the past year, sharing economy companies have come under scrutiny for failure to comply with insurance regulations, licenses, and abide by taxation laws. After resisting for some time, Airbnb began collecting rental taxes in September 2013, and has recently committed to working with governments around the world “to clarify or even change” the laws that apply to its hosts.

“The maturity of the space means we’re seeing governments start to take note of this new kind of behavior,” Anderson said. “It’s really about our regulations and our legal structures catching up with these 21st-century technological advancements. The sharing economy space will have to work through certain challenges, but these are to be expected and are certainly solvable.”

Others have raised concerns about the ethical complications of the sharing movement. Among them is Milo Yiannopoulos, founder and editor-inchief of online technology, politics and media magazine The Kernel, and a specialist in the fields of privacy, piracy, technology start-ups, Internet culture and the media.

“Private spaces extend to the things we own, and it is important to have a sense of ownership, as well as a stillness of mind,” Yiannopoulos said. “There are plenty of people out there who would admit to not having the stillest mind, but they can be grounded by both interior and external space. But the sharing movement involves the last private spaces being encroached on.

“The modern world encourages individuals to welcome everybody in and tell everybody everything, which preys on insecurity and egoism,” he continued. “It has proliferated to such an extent that it is in every conceivable aspect of life, and the final indignity is to take our stuff, too.”

THE KEY TO COMMUNALITY

Davie Philip, a founding member of the Cloughjordan Ecovillage project in Count Tipperary, Ireland, thinks differently. Philip describes the ecovillage as “a green neighborhood experimenting with good practice in community regeneration,” and said he believes that the sharing movement can be mentally and socially beneficial. “The biggest social challenge in Ireland is related to mental health issues caused by isolation and the limited means people have to engage with each other,” Philip said. “People are locked in their homes with no connection to each other, and it’s causing social problems.”

Participants in the ecovillage, many of whom relocated to relatively isolated Cloughjordan from Irish cities, are committed to an ethos of sharing and sustainability. Informal carpooling, tool sharing, and food exchanges are part of daily life in the ecovillage, which was founded in 1999. Fourteen years later, the ecovillage includes 53 households, varying from young families who want a safe environment for their children to retired people who want a community around them.

“Sharing facilitates community relations,” Philip said. “There is a very deep sense of community and pride. We share tools, land; every week there is an option of a shared community meal. The Cloughjordan Community Farm is the community-supported agriculture project based in the ecovillage, and members engage in many aspects of running the farm.”

Philip believes Cloughjordan’s model can be replicated on a wider scale. “Healthy cities are made of neighborhoods,” he said. “A city can be viewed as a collection of villages. I’m surprised there are not more initiatives such as this. The economic downturn has presented an opportunity to work together; I think this will become a necessity in the local climate.”

BEING PREPARED

As tornadoes, hurricanes and floods prove every year, Mother Nature already knows how “to take our stuff.” San Francisco-based BayShare, a network of sharing organizations, is focused on collaborating to help those who have lost everything to disaster.

“Sharing-economy companies naturally produce indices of assets of all kinds: cars, sleeping bags, services like car rides or task fulfillment, social and professional connections and skills,” said Jesse Biroscak, co-founder of BayShare.

“Airbnb helped after Hurricane Sandy to house people who had lost their homes,” Biroscak said. “Users offered their homes for free rather than charging the normal fee. That example can be extended and integrated into any city’s emergency response system, and hyper-localized for quick and responsive action.”

Building a site that facilitates sharing isn’t easy, but it is worthwhile, proponents say. “Whether it’s a personal tax or regulation within existing incumbent industries or insurance issues, there are a range of challenges that companies and start-ups in this space have to face,” Anderson said. “This movement is empowering for the community. When it’s viewed from that perspective, it opens up a lot more opportunities than problems.”

http://www.ted.com/talks/lang/en/rachel_botsman_the_currency_of_the_new_economy_is_trust.html

by Sean Dudley Back to top