Economic downturns provide a massive incentive to utilise the existing capital stock more efficiently. The creative destruction of retail is revealing new ways to optimise floor space and new business models to utilise buildings more efficiently. In downturns households will also consolidate to better utilise their available space. But this wave of innovation is not limited to buildings but applies to capital in its most broad sense.
The revolution in capital efficiency is coming to households across the world via web-based sharing. Vehicles, driveways, books, tools, bikes, even clothes – if the good is durable it can be shared at minimal cost there is a website that will allow you to participate in the new economy of collaborative consumption.
Put simply, collaborative consumption is either old-fashioned sharing facilitated by a central hub (with a fee), or a club, where members share costs and use of capital goods. It is a modern take on optimising the use of capital (a good overview is here).
Here are a few examples –
- Park at my house is a UK website provides a central hub for people to rent driveway and garage space from each other.
- Zimride is a formalised hitch-hiking hub where people can post their drives on-line and find paying passengers.
- Thredup provides a service for passing on hand-me-down clothes, and Swap Kids Clothes is an Australian version.
- Zilok is a European central hub for renting any household good from others close by – cameras, televisions and projectors, sports equipment, and so on.
- Flexicar is a car sharing club in Melbourne and Sydney
- House swapping sites allow you to holiday at someone else’s home while they stay in yours (eg here and here). And there is always the favourite couchsurfing site to find a place to rest your head in a new city.
The central hub for all things collaborative is, unsurprisingly, collaborativeconsumption.com, but Shareable is also a great resource.
What most astounds me is how quickly web-based sharing hubs have taken off, given the limited barriers to sharing with friends and neighbours, who often have the things you are looking for. I guess we wouldn’t waste time calling all our friends before a road trip on the off chance they were heading the same way, but it might be worth quickly posting your trip on a car-pooling site on the chance of getting a small fee from a passenger.
One of the main dilemmas facing these schemes is the assignment of risk should things go wrong. If I arrange a lift to Byron Bay (a common route I am sure) through one of these websites, and the driver of the car crashes, how is liability handled? It appears from my brief reading of the collaborative tea-leaves that insurance and risk assignment is the main role of these central hubs. Indeed the very premise of their success is the trust they can develop between their members to ensure ‘product’ quality. Ebay and Paypal have provided valuable lessons in this regard.
It also seems that mastering trust and risk assignment is critical to the success of collaborative consumption over old-fashioned sharing. I could lend my boat to a friend of a friend, but if things go wrong it could get messy. If the central hub takes on these risks for a fee (shall we call it insured sharing?), the barrier to entry for ‘sharers’ and ‘sharees’ is greatly reduced.
I see massive innovations continuing in the collaborative consumption market place for a few years yet, and I expect a few leaders to emerge (as they do in all infant markets) to become household names. Australia is a little late to the party on some innovations so expect us to play a bit of catch up, meaning we will see a wave new sharing schemes over the next few years. Melbourne and Brisbane have already brought the sharing idea into the Australian mainstream with their, so far unpopular, bicycle sharing scheme.
Finally, the image below is from this presentation. The presenation provides a good overview of the state of collaborative consumption offerings, and a glimpse into some of the challenges and benefits it provides to users.
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