Rent or own? The new sharing economy values access over ownership
To rent or own, that is the question posed by the burgeoning sharing economy. For a growing population engaged in this high-tech, low-cost 'collaborative economy,' access to cars, clothes, cuisine – or even a cat – is better than ownership.
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Julie Sue Auslander, who lives in Montvale, N.J., says she's a "big believer in this sort of thing," but when she tried to use SpareRoom (based in London), Airbnb, and RelayRides on several occasions, she was disappointed by the lack of participants.Skip to next paragraph
In Pictures The Sharing Economy
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"There were no takers for my apartment on SpareRoom, and I couldn't find the car I needed on RelayRides," she says. Airbnb didn't "feel as safe to use as I would like. And there wasn't inventory where I needed it," she adds. But Ms. Auslander also believes that as the market matures and awareness increases, there will be plenty of good matches made.
Last July, a home rented through Airbnb was ransacked; the owner, who went by the initials EJ, blogged about it and was critical of Airbnb's response. Later, another Airbnb client told the website TechCrunch his house had been burglarized and damaged by a renter. Airbnb now covers loss or damage from theft or vandalizing for up to $1 million. And it doesn't seem to have been hurt by the isolated incidents. In the past five months alone, the company has booked 5 million guest nights and has 230,000 available properties, most of them someone's primary residence. Airbnb makes money by taking 10 percent of every transaction. Cofounder and chief technology officer Nathan Blecharczyk says, "A couple of weeks ago, we had 60,000 people staying on the service. And that's just a single night."
On the whole, experiences gained through these sharing-economy companies are positive. And although this is an economy, and as such, is often focused on cash changing hands, just as often it's not. The experience is also important – the ethnic food tour with a group of people you just met, the stay in an Airbnb treehouse, the coffee you had with the owner of that flat in Edinburgh, the friends you made and the things you learned about people from halfway across the world or just down the street.
The more often people take advantage of sharing-economy companies, the more likely they are to continue to do so, according to a 2010 study by International research firm Latitude and Shareable Magazine. The study surveyed 537 sharing-economy participants and found 78 percent of them felt their online interactions with people had made them more open to the idea of sharing with strangers.
Christopher Kieran, cofounder and chief executive officer of Zokos, which enables friends to fund parties together, says sharing is all about building community. The idea for Zokos, for example, came out of a vegetarian dinner club Mr. Kieran participated in as a graduate student at Yale.
"While the gatherings were centered around food, the real benefit came from the friendships formed within the community," he says.
On Zokos, friends essentially pool money to create and share an experience they couldn't otherwise afford. Although some might say asking your friends to pay for the party you want to throw is a faux pas, Kieran says Zokos users don't see it that way. Instead, the 29-year-old senses they are fighting a profound loneliness – because with all their social networking, they often lack real-life connections.
Sharing, if nothing else, is about community and connection.
"I think what we are doing is building a whole new social infrastructure that radically enhances the amount of connectivity we have," he says, "and promotes wealth and happiness for all of us."