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New frontiers

We’re about to approach the next tipping point towards a future of collaborative consumption. Some very important players are now needed to make that transition work.

Less than four years ago, the idea of opening up your home to a stranger on vacation was a fringe trend to say the least. Once the realm of adventurous travelers, young professionals and tech-savvy individuals, it was hard to imagine that by 2014, hosts on the peer-to-peer accommodation marketplace Airbnb would be welcoming millions of travelers of all ages in 192 countries around the world. Similarly, the proliferation of carsharing and bikesharing schemes in cities everywhere, ridesharing communities growing across Europe and the U.S., and thousands of rental or exchange platforms for all kinds of assets suggests that we truly are in an age of access over ownership; a consumer movement we call collaborative consumption.

Defined as the reinvention of old market behaviors – like renting, bartering, and swapping – through technology, collaborative consumption is enabling us to share, trade, and exchange all kinds of assets on an unprecedented scale. Following the global financial crisis of 2008, people all around the world began questioning not just the money they spent, but also how they were spending it. Coupled with the worsening environmental situation and impending resource shortages, we have begun to look for ways to save or make more income, reduce the waste we are contributing to the planet, and increase the efficiency of the possessions we own. A raft of new technologies, mobile, social, and location-based, are enabling us to reconnect with those around us, albeit in new ways, making the emergence of this new type of economy even more frictionless and fun.

Demand for regulation

Over the last five years, collaborative consumption models have emerged in almost every sector and industry. We can now take an online class on anything through Skilio, share a ride between cities on’s platform, rent our neighbor’s car on SocialCar, borrow a drill or ladder on Streetbank, make a loan to someone needing funds on peer-to-peer lending platform Zopa, and even rent a pet on DogVacay! But is this enough to permanently change our consumption behaviors and shift this movement into the mainstream? Or have we reached the limits of what we’re prepared to share? At Collaborative Lab, we believe we are about to approach the next tipping point towards a future of collaborative consumption, but there are some very important players needed at the table if we are to achieve this: governments and big business.

As the startups in the space have matured over the last few years, so too have expectations of their professionalization and compliance. This has come in the form of increased regulation, lobbying efforts from incumbents, and governments questioning how to deal with these new kinds of businesses and their disruptive effect on the local economy. From Airbnb’s challenges in New York State regarding existing tenancy laws to ridesharing organizations in California demanding more appropriate regulation with the California Public Utility Corporation’s introduction of specific ridesharing legislation, the role for government is becoming increasingly clear. If an enabling environment is to be created for these more disruptive business models, councils and local governments will need to learn how to balance existing stakeholder needs with the opportunity for new market creation and increased economic empowerment of its constituents.

Changing attitudes towards ownership

We are already seeing councils around the world making inroads, with Seoul Municipal Government in South Korea declaring itself a ‘Sharing City’ and 15 U.S. mayors signing the Shareable Cities Resolution in 2013. These efforts are commendable, but to ensure the rapid adoption of collaborative consumption, we will need commitments from local governments around the world to incorporate the principles of the movement, in the same way sustainability has become an integral part of planning and strategy.

But local governments aren’t the only ones struggling to comprehend this new kind of business activity – existing businesses and incumbent industries are starting to feel these startups snapping at their heels, representing a changing attitude towards ownership and a shifting consumer demographic. But rather than feeling threatened, there is a huge opportunity for big business to explore models of collaborative consumption and integrate them into their own products and services to stay relevant and keep customers engaged.

As an example, while car manufacturers have a lot at stake with shifting ideals around car ownership, instead of trying to stamp out this new behavior, they are actually joining the game. Auto companies from BMW to Daimler to Ford to Volkswagen are all now experimenting with their own carsharing companies, or entering into partnerships with existing players, as a way of attracting a new generation of customers and adding a new revenue stream. As a sign of the potential of these new models, after only two years in operation, BMW’s DriveNow scheme expected to reach profitability at the end of 2013. Over the next two to three years, we will start to see big players in many different industries dipping their toes in the water to launch their own collaborative consumption business areas.

Collaborative consumption is not just a trend

As collaborative consumption opens up new and more efficient ways of gaining access to the things we need and reconnecting us with each other, it will become an increasingly ubiquitous part of our lives. To help propel this movement into the mainstream, with as few teething issues as possible, we need the support of local governments to create an enabling environment that brings all stakeholders together.

Similarly, the only way to achieve critical mass in user adoption will be to transition traditional companies towards models that embrace shared ownership, redistribution and service-, not product-, based relationships. Collaborative consumption is not just a consumer trend, but a necessary shift away from decades of hyper-consumption to a more efficient, sustainable and community-focused way of living – a shift that involves players at every level of society.


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