The social networking era brought about a sharing economy. We share not only our lives, but also everything from cars to clothes to chickens, yes chickens (more on this in a minute). Services like Uber and Airbnb have ushered in a new era, and industries rapidly have been embracing the change to determine how to benefit from the shift in terms of future revenue.
So, will we buy things in the future and just share them with others, or will industries take over with a subscription, or pay-as-you-go, business model?
It is amazing what people are sharing today. You can rent your house or apartment to travelers through sites like Airbnb, FlipKey, HomeAway and HomeToGo. You can rent it by the hour through sites like HourlySpaces.
You can rent your car using Turo. You also can rent camera equipment, camping gear, or just about anything you currently might own through sites like Loanables, Gear Share and ShareGrid.
It is not only easy to share your stuff to creat an alternative revenue stream, but also relatively easy to launch a sharing service through the use of “shared” servers in the cloud, which may account for the number of new sites that seem to be popping up all the time.
With so much invested in high-ticket items that rarely are used — like second homes, boats, RVs, and even specialized tools and equipment, it’s no wonder consumers have been jumping into the sharing economy.
The sharing economy is not necessarily good news for companies that make or sell things to consumers. Companies would prefer to sell stuff to each consumer. However, in light of the economic shift, businesses have been jumping on board with subscription and pay-as-you-go (essentially rental) business models.
You now can choose subscription or rental for anything from basic necessities — like transportation, shelter, clothing and even food — to entertainment, equipment, and other consumer or luxury items.
For example, Toyota has been experimenting with subscription models for vehicles similar to ZipCar with a service called “Kinto,” based in Japan, and “Hui” in Hawaii.
For more urban environments, there is a rapidly increasing list of companies — like Lime, Bird and Spin — that rent or offer subscriptions to manual or electric bikes, scooters and skateboards.
For clothing, companies like Stitch Fix, Le Tote, and Showdazzle rent the latest in women’s fashion for a fixed monthly fee. And yes, there are companies like The Mr. & Ms. Collection and ThreadThread that rent men’s clothing too.
When it comes to entertainment, just about everything, from movies to gaming, seems to be moving to a subscription model.
It doesn’t stop there. Sharing companies have been renting much more than camping gear, cameras and sporting equipment. The business model extends to food. You now can rent everything from gardening equipment to garden plots and chickens (for their eggs) from Rent The Chicken.
You can even rent a casket for a funeral. According to Everplans, “the body is placed in a simple wooden box and the box is placed inside the casket, giving the appearance that the body is actually in the casket. In fact, the body never touches the casket, and the wooden box is easily removed after the service. The body can then be buried or cremated in the simple wooden box, and the funeral home can re-use the rental casket.” This made me realize just how far this sharing economy could go.
Businesses Fade Into Oblivion
This brings up the question: Is it worth buying anything anymore, or are we better off just divvying up our monthly income to rent the products and services we wish to use?
There are a few things to consider. First, consider how much you plan to use something, such as a car, and for how long. The average car easily will last 200,000 miles with proper maintenance. However, it may be cheaper — and less hassle — to use a ride-sharing or vehicle subscription service than to pay for the vehicle itself, plus maintenance, parking and insurance.
The same has been true for housing in modernized countries for a long time. The sharing mentality offers a sense of freedom from the responsibility of paying for, storing, and maintaining these things, especially for members of younger or older generations who are not concerned about schools and other activities for children.
Even staying on cruise ships has become an alternative for older generations looking to remain on the move, see the world, and enjoy life.
Unfortunately, history has shown that the cost of products and services often can rise faster than incomes, and if you share or rent everything, you have no vested interest that can be bought or sold. As a result, the change does come with some risk — but sharing, subscribing or renting has been changing our economy.
There probably will be many circumstances in which people choose not to purchase some items in the future. As the automotive industry moves toward autonomous vehicles, the business model will change toward a subscription or renting model for a variety or reasons. The vehicles are going to be very complex and more challenging to maintain, for starters, and the experience or driving and owning will be less personal.
In this case, the corner gas station, local mechanic, insurance agent, and even the dealership will be replaced by the third-party auto service provider or vehicle OEM.
Likewise, it seems ridiculous to purchase a bike or scooter if they are readily available on almost every street corner.
When it comes to entertainment, purchasing a physical copy of a game or movie will go the way of the video and music stores of the past. Yes, this means big box retailers will have to fill the physical void, and specialty retailers like Game Stop will follow Blockbuster into obscurity.
As a result, the movement to a shared economy will be accompanied with significant societal changes. Whether this is good or bad is difficult to determine, but it is occurring. Are you ready for the shift?