If you get in line early enough at 99 Cents Only on a day when it’s celebrating a new store opening or some other special occasion, you can get a new Philips flat-screen TV for a buck and change. During the holiday season last year, Volkswagen sold three factory-fresh Jettas for just $5,995 each on Gilt.com, the Web’s leading site for deeply discounted designer goods. In the age of Groupon, everything’s always at least 50 percent off. It’s never been easier to own stuff, and yet for millions of consumers, ownership is becoming as obsolete as newspapers. The costs are too high, the benefits too negligible.
Zipcar, the urban car-share pioneer, tripled membership numbers in 2009. But as fast as car-sharing is growing, it’s failing to keep pace with bike-sharing, which is reportedly the fastest growing form of transportation in the world. New Yorkers renting out spare space in their homes are making upwards of $1,600 a month. These factoids come from the 2010 book What’s Mine Is Yours, in which business consultant Rachel Botsman and serial entrepreneur Roo Rogers rebrand “renting” and “sharing” as “collaborative consumption” and position it as the cure for “outdated modes of hyper-consumption” that have left America with seven times more personal storage facilities than Starbucks outlets.
Just a few years ago, President George W. Bush was still touting “the ownership society” as the surest path to prosperity and personal autonomy. But that was before we could easily search our cellphones for the nearest power drills, sedans, and spacious Manhattan closets for rent. What we really want, sharing evangelists suggest, is access, not ownership. And when we can use the mobile Web to pinpoint sharable goods, the burdens of ownership—which include maintenance, storage, and eventual disposal—begin to outweigh the benefits in many cases.
Sensing a sea change in which people abandon their cars and turn their garages into DIY Holiday Inns, several venture capital firms, among them Google Ventures and Sequoia Capital, are pouring money into start-ups that specialize in what a May Fast Company article described as “underused asset utilization.” Similarly, Web-based peer-to-peer rental platforms are inspiring a new wave of micro-entrepreneurship among people with underused assets of their own. At Relay Rides, a car-sharing service that helps individual car owners rent their vehicles to others, some owners are making upwards of $600 a month. At Airbnb.com, which allows homeowners to rent space to travelers, a guy who lives across the street from a busy park in San Francisco is renting access to his bathroom for $10 a day.
In What’s Mine is Yours and The Mesh, a 2010 book by the online commerce pioneer Lisa Gansky, Web-facilitated renting is presented in utopian terms. It will use resources more effectively and thus produce less waste. It will lead to more durable products and more responsive companies that specialize in long-term customer relationships rather than one-time flings that end at the cash register. It will lead to greater social connectivity—as we develop deeper relationships with our neighbors’ Jetskis, we’ll also develop deeper relationships with our neighbors. It will end our mindless, unsatisfying overconsumption.
In both books, the material life is generally presented in negative terms. We fill our lives with “stuff” rather than “the things we really care about.” We suffer from “insatiable consumerism” and “mall-fueled conformity.”
But luckily for those of us who find great pleasure and meaning in what What’s Mine is Yours dubs the “frenetic quest for personality identity through brands, products, and services,” collaborative consumption may turn out to be a somewhat greater agent for hyperconsumption than its evangelists imagine. Think about San Francisco’s bathroom entrepreneur. Before he started renting out his toilet, park visitors could either wait in line at the park’s public toilets or perhaps pee on someone’s garage door. Neither of these options has an explicit fee attached to it. The entrepreneur is creating new opportunities to consume services.
Meanwhile, as Ben Franklin might have said, a penny saved on car payments is a penny spent at Etsy. This is the real opportunity collaborative consumption presents: It gives consumers the opportunity to more efficiently allocate their resources and thus free up money to make additional purchases.
Much of the prosperity we enjoyed throughout the 20th century occurred because the cost of food dropped enormously. In 1874 the average family spent more than half its budget on food. Today food takes up only around 10 percent of the average family bill. When butter and eggs got cheaper, people could suddenly spend their bread elsewhere, and their increased buying power led to new products, new industries, and cheaper prices for everything as demand for all these new goods increased.
Yet as the price we pay for food was dropping, the price we pay for our cars and our houses was on the rise. “From 1950 to the mid-1980s, the amount allotted for housing and cars doubled from 22 percent to 44 percent of [the average American family’s] budget,” the urban studies maven Richard Florida writes in his 2010 book The Great Reset.
To a certain extent, the drop in food prices was catalyzed by people divesting themselves of ownership: They sold their farms and moved to the cities. Now collaborative consumption platforms such as Zipcar and Airbnb can reduce the cost of our cars and shelter by allowing us to rent when we might otherwise purchase or make the assets we do own less costly by renting them out to others.
While cars and shelter may qualify as utilitarian necessities, many of the categories suited to collaborative consumption are best described as luxuries. There isn’t much reason to rent anything you use often or that costs less than a couple hundred dollars. But designer shoes that go for $1,000, high-end sporting equipment, a condo in the Dominican Republic?
Not many people can shell out $80,000 for a vintage Hermes crocodile handbag on eBay. But at Avelle.com, you can secure one for a month for $1,950. While this figure hardly conjures visions of responsible consumerism or even conspicuous thrift, it does represent a step forward in the democratization of luxury. Similarly, platforms like Airbnb are an excellent inducement to live beyond one’s means. If you’re in the market for a new apartment and you really love the one with an extra big living room and a view of the ocean even though it’s about $500 a month out of your price range, well, those features will also make it more attractive to potential lodgers.
The emergence of new rental markets is also likely to exert a downward pressure on existing products and services. If the Web has taught us anything, it’s that consumers are quite generous in what they will tolerate if the price is right. The thousands of amateur hoteliers now offering couches and air mattresses in New York City and Paris for as low as $20 a night have the potential to undermine the prices that hotels charge in the same way that people who create content for free have changed the business model of Hollywood and the news industry. A space on the floor in someone’s living room flop house may not have all the amenities of Motel 6, but if it’s clean enough and safe enough and reliable enough to attract consumers on an ongoing basis, it will create competition for legacy hoteliers that will in turn create new waves of innovation and price reduction.
How is the Four Seasons going to compete with the ever-enterprising Kardashian clan when they start offering package deals—a night in their pool cabana, plus access to their jewelry and SUV collections—in an effort to generate revenue after Hollywood collapses entirely? Conscientious, environmentally correct consumption never sounded so frivolous, or so fun.
Contributing Editor Greg Beato writes from San Francisco.