The Sharing Economy


Today, there is a steady, inevitable growth of what many commentators refer to the “sharing economy.” The most wellknown example of replacing sharing for ownership of a vital asset is the Zipcar business (recently acquired by Avis-Budget). Zipcar is based on the principle that many individuals need automobiles relatively infrequently and for relatively short periods of time, so that neither ownership, nor leasing, nor even daily rentals are the most cost-efficient solutions for them. They become a Zipcar member, rent a car for an hour at a time, pick it up at one Zipcar lot, drive it and drop it off at any Zipcar lot.

However, the sharing economy is progressing beyond the temporary use of automobiles. Airbnb is an example of a service which facilitates a process by which people may share all or part of their residences with others for a fee that, for the person needing accommodations, is lower than the cost of a hotel, and more readily available. This service has the advantage of not only being more flexible, but enabling the use of rental property that is more conveniently located than a traditional hotel, which typically has to be in a commercially zoned part of a community.

Similarly, there are many businesses in which individuals can rent the use of a room or a suite for a meeting for an hour at a time. Companies like Regus have a large supply of available offices for temporary use of facilities. In my case, I have a network of friends or service providers that let me use vacant offices or conference rooms for meetings, so that I do not have to rent a very expensive hotel conference room. The informal version of this is the use of coffee shops and restaurant spaces for regular meetings. For example, the local coffee shops in Darien, Connecticut, where I live, are regular venues for morning and afternoon meetings, in one case, for men’s prayer groups. These groups do not rent a space, but simply reserve a large table and preorder breakfast or coffee for a group of 12 people.

New York City has a wonderful set of public spaces in Midtown buildings like the Park Avenue Plaza, the Sony building and the IBM building that have open lobby areas that have been converted into meeting places or even spaces where individuals can sit at a table at no cost for hours at a time. The Park Avenue Plaza between 52nd and 53rd Streets between Park and Madison Avenues has gone one step further in converting a portion of its space to a group of tables for individuals to use for chess games.

A variant of this temporary use of assets is the penetration of extremely short-term rentals of equipment needed for one-time tasks often of such short duration that a purchase or even a fixed term rental is not a viable option. My wife and I rented a dehumidifier some years ago for a period of 3-4 days when our basement had been flooded and we needed to get moisture removed from our carpet.

For communities, the use of shared services is a great alternative to having each resident separately contract for services. My wife and I have lived in such an association for almost 20 years. We have 19 homes, a clubhouse, two tennis courts, and significant open spaces for play areas for children. Our lawn management, tree trimming and removal, snow removal, road maintenance, and refuse collection services are shared across the 19 residences, and, as a result, we pay far less than we would pay if each of us contracted separately for these services.

Another form of facilitated shared services is the facilitation of peer-to-peer selling of books, music, DVDs, and other tangible assets by one individual to another through sites like Amazon.com, not to mention that Amazon.com is also a major provider of shared cloud computing services. My son James made significant money during his senior year of high school and the summer after high school collecting salable items people we knew no longer needed and selling them online to others. He particularly helped the local Boy Scout operation sell the items that remained unsold after the annual spring tag sale.

Still another formed of shared service, which has been around for several decades, but is getting renewed life, is the use of ride-sharing for trips to and from work, and to and from places like airports and train stations. Back in the 1980’s, when I was a reverse commuter from New York to Stamford at Pitney Bowes, the Company had no shuttle service between the train station and the Company headquarters. While I enjoyed walking between the station and my office, there were times when walking was not a practical option, typically at night when I needed to get to the station quickly to catch a train back to New York. Many people picked up and drove me to the station. I developed some great short and long term relationships with those who regularly helped me.

What has given the sharing economy new life is the Internet, which enables those doing the sharing to have three capabilities they never previously had:

  • The use of online matching between those with assets to share and those needing the use of the assets;
  • An ability to get a high degree of advanced knowledge about the person providing the asset to be shared and the asset itself; and
  • The ability of prior users to rate the experience and give feedback available to all future users of that asset.

For the sharing of automobiles and rides, the increased availability of insurance against both liability and damage is another factor that has enabled the sharing economy to grow, since many people are deterred by the financial risk they would appear to be taking.

I am excited about the prospect of this economy continuing to grow. We waste and consume too much, and, by buying items, we also end up with all the burdens of ownership.

Historically, shared assets and services often got damaged more easily and got excessively intensive use, which meant that their value to others was diminished. Cooperative associations were valued less than pure ownership situations, and the ownership of assets was associated with status, power, and freedom.

Today, the world is different. We have virtual offices, which are enabled by our ability to stay in touch with the world via our smart phones, Ipads, and laptops. We have more ubiquitous cloud computing, which obviates the need for us to own servers. We also have more online networks that are changing how we share information with one another across organizational and community boundaries. The concept of sharing space and other assets is not as strange as it once seemed.

I have learned how to do more of this with the need to manage a start-up business, Dossia, and to manage our film project. It is a wonderful trend that, over time, is making our quality of life far better than it once was.