In the bold words of poet and author Mark LeVine, sharing is clean, crisp, urbane, postmodern; owning is dull, selfish, timid, backward. In the future, possessing goods will be less important than access to them, according to Jeremy Rifkin, the famous American economist.  The sharing economy or collaborative economy –some call it platform economy- is sure to have an impact on consumer life, that’s for sure. Some people believe it will incite a social revolution of sorts, not least due to the boost it can give local relationships between people and businesses. Others can barely suppress their skepticism towards the impact of the sharing economy. They question its business model and its true potential for making money.

The best way to describe the sharing economy is as a (not-so-new) socio-economic system. It can effect all aspects of our lives: ranging from order a meal from your foodie neighbor, to lending someone your car when you’re not using it or exchanging homes with a foreign family for your holiday. The principles of this system are tried and true. Governments were early adopters of sharing, they constructed railroads or set up bus services and national energy suppliers, for all their citizens. Businesses like hotels, bath houses, laundromats and dry cleaners are all-in the ‘sharing business’, too. In the past century, the sharing economy was fueled by the scarcity of goods. Clothes were worn and mended over and over, people went to watch TV at their neighbors, and so on. People simply helped each other out, a concept we’re happily embracing once more.

New generations of today’s consumers are re-evaluating their lifestyles and the value of their possessions, not least in the wake of the financial crisis. Consumers, young and old, feel invested in creating a new and timely kind of community spirit, a return to human dimensions. Incorporating sustainable choices to protect the environment is another side to the sharing economy. Authors Rachel Botsman and Roo Rogers describe this kind of economy as cooperative consumption, in their groundbreaking book What’s Mine Is Yours. The rise of the sharing economy does actually change the behavior of consumers. After all, who could have imagine ten years ago that we could get into a car with a perfect stranger (Uber, Lyft, BlaBlaCar)? Or rent out an attic or spare room to people we’ve never met (Airbnb)? We advertise our own service as handyman (TaskRabbit, Helpling), but are equally prepared to rent our boats (Boatbound), homes (HomeAway, Flipkey), cars (Car2Go, Zipcar) or drill hammer (Peerby). Our most prized possesions, our personal experiences and our very lives: we trust people we have never met with all of it.

Social Revolution

The online reputation of the players in this economy is key. Reviews, screening and verification protocols all add up to make the behavior of all relevant parties in the sharing economy clear and transparent. They ensure a mutual sense of trust. Some people who engage in sharing expect something in return immediately. Asynchronous reciprocity is equally common, where someone receives something and is then inclined to help others at a later time. Our very real longing for human contact means we crave a sense of belonging and of doing good for others. Peer-to-peer marketplaces, sharing platforms and social networks all fulfil those needs. The sharing economy, then, is not merely an economic breakthrough; it also causes social change.

Skepticism

Skeptics are not so sure about all of this. A growing number of people state that the self-professed proponents of the sharing economy – Airbnb, TaskRabbit, Uber and the like — are in fact not in the sharing business. They collect houses, vacant rooms, empty cars, idle handymen and all sorts of goods and exploit the data generated. They do everything but share the money they make from their activities, though. This can be seen as a problem in society: the fact that a small elite owns the generated data, the power they derive from them and the profits that are made.

Another reason for critics to question the sharing economy as a force of good, is that they say it in fact does little more than facilitate badly-paid freelance work. Following the economic crisis, many people turned to the sharing economy as a way to supplement their income. Sheer financial necessity is certainly not as ‘cool’ as being part of social change does. Some consumers then are deeply reluctant to share their possessions. The effort involved in sharing something must be outweighed by a saving in cost, or some other benefit, otherwise the average consumer could easily say it’s too much bother. For businesses and retailers operating in the sharing or collaborative economy need to realize they must provide added value, or else!

Local connections

Often overlooked as a driver of the sharing economy is the social aspect of it all. Our very real longing for human contact makes us feel good about joining the sharing economy. People want a sense of belonging, of doing good for others, and of being part of a community brimming with social interaction. The literally thousands of peer-to-peer marketplaces that have popped up, the sharing platforms and the social networks are all ways of fulfilling that very need of community. Sharing, exchanging and reusing goods, services and talent –sometimes for free, sometimes for money- are the foundation for new connections among people and between people and businesses.

This is blog 14, based on my book ‘The end of online shopping. The future of retail in an always connected world’.

The book is published by Business Contact (5th Dutch 2nd Flemish print), Nubiz (2nd English / American print), Post & Telecom Publishers, Beijing (1st Chinese edition, as of May 25), Hoepli (1st Italian edition, as of May 31) and World Scientific WSPC (1st English editions for China, Philippines, Malaysia and Singapore in fall of 2018).

Danish, German, Korean and Portuguese editions are in preparation for fall of 2018 and for 2019.