Sex and the City 3 may be dead, but the ever-hungry craving for beautiful clothes that the HBO franchise embraced is not. Just like how (anti-)heroine Carrie Bradshaw revels in owning Manolo Blahniks and Prada, I enjoy an endless, rotating closet of designer clothes and accessories. But unlike Carrie, I don’t own any of those items – I pay for an “unlimited subscription” to Rent the Runway, which allows me to rent any four items at a time.
Viva la Fashion Revolución
The sharing economy is challenging the way we see ownership.
Rent the Runway is part of the sharing economy, which allows businesses and individuals to share underutilized physical assets as services, in this case, the underutilized assets are gorgeous designer garments and accessories. Driven by the effects of the economic recession that forced people to find new and creative ways to make and save money, the sharing economy is challenging the way we see ownership.
Changing values and priorities have led us from hyper-consumption in the 20th century to collaborative consumption in the 21st century. While some companies like Rent the Runway temporarily lend their goods to customers, others create a platform to facilitate “peer-to-peer” rentals where private individuals share property amongst themselves in exchange for money.
Getaround, an online car-sharing service, allows owners to generate a profit by renting out their idle property that, studies show, sits unused 95 percent of its lifetime. On the flip side, consumers get to enjoy the benefits of owning a car, without having to sink big bucks into it. Getaround allows technology to enable trust between two people through a mutually beneficial transaction that solves the “coincidence of wants” problem – when person X who has a car wants Y’s money and vice versa.
Sharing resources is not a new concept, but big data and technology have revolutionized and simplified the process. By directly connecting consumers and service providers, technology reduces transaction costs, making it cheaper than ever to share goods and makes sharing on a larger scale more possible. By connecting consumers to private owners, technology eliminates overhead costs of running a business, like retail stores and warehouses.
The prices of these services will only become more affordable.
The sharing economy is estimated to grow from $14 billion in 2016 to $335 billion in 2025. As it becomes more and more attractive to businesses, innovators, and entrepreneurs, and as competition grows, the prices of these services will only become more affordable.
Whereas property is christened right next to life and liberty, with the rise of the sharing economy, we are starting to rethink the importance and value that we place on ownership. Adults in the United States who are familiar with the sharing economy are already changing their perception of ownership: 81 percent think that it’s less expensive to share than own things, 43 percent think that ownership is a burden, and 57 percent agree that access is the new ownership.
As people continue to cram into already heavily populated cities, globalization continues to make the world a smaller place, and startups based on trust produce economic value from underutilized assets, we will see a fundamental shift towards a society that is less and less defined by the distinction between the haves and the have-nots.
Ownership Is Evolving
This doesn’t mean ownership is dead, but that it is evolving, much like our lifestyles and choices. The sharing economy is reshaping the conventional conception of ownership, which is limited to the lawful claim or title to a certain item of property. As private individuals are presented with opportunities to make money from things that they already own, we are forced to think differently about ownership.
Ownership is no longer simply a title that allows you to lay claim to your assets, it is a means of profit – a much more realistic venture today than ever before. Anyone can provide a service in the sharing economy, as long as you have ownership of an asset in demand, and an internet connection.
We may even start measuring human well-being and prosperity through access to experiences. The popularity of services in the sharing economy means that owning things is no longer a good indication of relative wealth. Through Airbnb, an online marketplace for leasing or renting short-term lodging, one can rent a castle in Scotland or a shared room for the span of an internship. You get to pick and choose the experiences that you are willing to splurge on, without making a long-term, funds-draining commitment, at rates 30 to 60 percent cheaper than hotels. In a world where experiences are prioritized over possessions, we may even start measuring human well-being and prosperity through access to experiences.
Carrie Bradshaw once said, “I like my money right where I can see it: hanging in my closet.” Turns out I like it better spent on a variety of things – most of which I can access as experiences through the sharing economy instead of buying one thing – a sentiment shared by a growing population of mostly millennials. I don’t want to own a car to run errands, and I can’t afford to own designer dresses for every occasion, but some savvy entrepreneurs in the sharing economy have solved these dilemmas.
The sharing economy is not all about unapologetically relishing in access to luxury. As the sharing economy experiments with different types of assets and entrepreneurs emerge to solve local problems, the benefits generated by the sharing economy will continue to defy geographic and socioeconomic boundaries. In short, the sharing economy is growing the pie for those of us who participate in it.