World changing pundits struggle with naming a concept that creates economic growth, increases access to goods and services, yet reduces consumption.
By now you’ve likely heard hype about the so-called “sharing economy.” But does that name really capture what it’s really about?
To explain it with somewhat wonky language, the Sharing Economy is an economic model based on providing access to goods and services rather than their outright ownership – often through peer-to-peer networks. Put more philosophically, it’s an attempt to decouple consumption from economic growth. Put more practically, it’s a hot new business model exciting consumers looking for convenience, savings, and connection to community. It’s huge and it’s important, but it can be hard to explain to a mainstream market.
Consider the archetypal example: Airbnb. On Airbnb, a vast peer-to-peer network allows people to rent out spare rooms in their homes (or their entire home itself) to anyone they deem trustworthy. The results are multi-faceted and overwhelmingly positive. Homeowners get some extra spending cash, travelers get a radical increase the variety and price of lodging options, and money gets spent in local neighborhood economies – Airbnb claims they contribute $56 million annually to the San Francisco economy alone.
Another example, more literally tied to sharing, is the newly launched yerdle. The yerdle platform makes it extremely simple to share, barter, or give away things you don’t want to your existing network of peers. The result is the satisfaction of getting rid of excess things without the guilt of throwing them away or the hassle of trucking them down to the local thrift shop, not to mention the positive relationship building that takes place when one friend helps out another.
Just about every imaginable good or service now has at least one startup company building a business around sharing or renting it. Sharing economy startups run the gamut from peer-to-peer car sharing like Wheelz, Getaround and RelayRides, to errand running services like TaskRabbit, high-end clothing rentals like Rent-the-Runway, and even a service that lets you rent out your parking space when you’re not using it (Park at My House).
On a macro level, the phenomena above should manifest positively for people, planet & profit:
1) Connecting neighbors and peer networks means stronger relationships and deeper community ties. That almost always translates into happier people and less dysfunction in a society.
2) The sharing or renting of goods means a net reduction in the amount of “stuff” that needs to be produced – this has positive environmental benefits – less waste, less energy used, less carbon emitted.
3) More money in people’s pockets means more money spent to stimulate the local economy.
So what do we call all of this? Does it even need a name?
Naming a trend is never easy. I’m using the term “sharing economy” largely because it’s the most popular term currently being applied to what I’m describing, and most of the people in the space seem to know what I mean. But “sharing” has the downside of seeming soft, a bit “San Francisco,” which might turn off some potential enthusiasts.
I’m quite fond of the term “Access Economy” as a substitute since it casts a wider net – this is really about creating access to goods and services without ownership. But it seems to be even more obtuse to the wider audience. Others have used the term “Collaborative Consumption” which works, but perhaps puts too much emphasis on consumption.
Whatever the name, the concept is undergoing rapid maturation and all the trials and tribulations that entails. Neal Gorenflo of Sharable.net offered an urgent vision recently which suggests the real potential of this movement is “nothing less than a radical democratization of the economy.”
Assuming we’re really on track to meet such a potential, what would you call it? Is “Sharing Economy” all encompassing enough? Or does it really matter?
Image credit: Carlos Maya