If you have ever used the resources of a library, a local gym, Amazon.com, or even a taxi cab then you have participated in the sharing economy. The sharing economy is a growing phenomenon based around the concept of using something temporarily before sharing or renting it out to another person.
The sharing economy operates on the principle that the cost of using of a good, service, or space is less than the cost of the item in its entirety. Forbes magazine estimated that total revenues for the sharing sector could exceed $3.5 billion in 2013, with growth topping twenty-five percent. Individuals have the opportunity to collaborate, give, buy, barter, and swap things with each other in a potentially symbiotic community.
As stated by Young & Rubicam’s Brand Asset Valuator in the wake of the Great Recession, consumers have undergone what is known as the “Spend Shift;” they now place less significance on the status symbols like BMWs, and more on cooperative behaviors and attitudes. Brand attributes like “exclusive,” “arrogant,” “sensuous” and “daring,” have declined in desirability whereas “kindness,” “empathy,” “friendliness” and “socially responsible” grew in popularity as consumers began to feel the effects of the recession. In the wake of such economic downturn, consumers are moving to mindfulness in their spending behaviors, and largely living (or at least owning) less.
According to Forbes, sixty-five percent of Americans concur with the statement, “Since the recession I am interested in learning new skills so I can do more myself and rely less on others.” Families and groups in-source, barter and network to evade the traditional marketplace. Many new businesses engage their aspiring DIY customers with training and support, and will sell them the supplies for projects.
One of the primary reasons that people utilize the sharing economy is that it is less expensive. Many companies operating through the collaborative economy were formed on the basis of cutting cost. For example, Rent the Runway is based upon the idea of sharing haute couture style at a reasonable price.
“We pay so much money to get [books] from the bookstore, and then we sell them back and get nothing.”
The sharing economy touches the Claremont Colleges, especially through groups like the 5C Book Exchange. This collection which started in private student-to-student exchanges attempts to keep textbooks free of markups one would receive from traditional vendors. The creator, Amanda Carter SC ‘13, stated the importance of a low cost option: “We pay so much money to get [books] from the bookstore, and then we sell them back and get nothing.” She believes in having a moderate option, where “students work together” to get a “middle price.” Eventually the idea spread to Facebook, and subsequently more than 1,000 Claremont students have joined the group, feeling the lure of cheap books.
In Carter’s opinion, used books are often preferable, because there is no obligation to keep them unmarked. And, since, as Carter says, “We’re all using the same books,” what’s the point in not collaborating?
As our own 5C Book Exchange demonstrates, the Internet is a rapid and non-intrusive way to get in contact and collaborate with a wide range of people. Additionally, formal peer-to-peer sites, like eBay and Craigslist, have the added benefit of offering users security through background checks and an established code of conduct.
Another motivator for the collaborative economy is ecological awareness. As people become concerned with how much of the planet’s resources humans consume, they feel the desire to pull back and reduce their environmental footprint. The sharing economy provides an easy means to prevent wasting resources through accessible collaborative programs.
The Claremont Colleges’ Green Bikes Program was founded in 2001 on this principle. The two students who began the organization, Joey Haber PZ ‘05 and Gus Porter PZ ‘05, were motivated by the desire to “do something useful.” They were concerned about US oil dependence, in addition to the amount of traffic congestion around the colleges.
While initially the GBP was an informal project that simply fixed broken bicycles, “it became a program that actually provided [and] repaired vehicles for people, and it was a very positive thing,” said Albert Wachtel, Pitzer Professor of English and Creative Studies. The program also helps students and faculty to get in better shape and improve their health.
Perhaps the most deep-seated reason why the sharing economy has taken hold and been sustainable is the broad sense of community that it fosters. People are sharing their homes, their cars, and their time with strangers through organizations such as Airbnb, Lyft, and Taskrabbit. Essentially, the collaborative economy brings people together.
Essentially, the collaborative economy brings people together.
While there are many sharing economies throughout the 5Cs, one of them is especially homey. Originally built during the Arts and Crafts Movement, in 1902, the Grove House was picked up and moved to its current location in 1972, and has become a popular place for students to hold meetings, have lunch or just enjoy each other’s company.
Of Pitzer’s 69 registered clubs, the Grove House is a “middle-ground meeting area” for over two-dozen, and “it’s constantly growing,” said Zenia Gutiérrez, the Manager of the Grove House Kitchen. In true collaborative consumption, the space belongs to no one and everyone at once.
“This is a safe space for everyone. It should feel like a home,” said Gutiérrez. The 111 year old home includes numerous spaces to be shared, such as the Ecology Center, the Bert Meyers Poetry Room, the Hinshaw Art Gallery, a Women’s Center, a guest room, a meeting room, groves, an outdoor classroom, and a garden.
According to Gutiérrez, the Grove House Garden is especially representative of the sharing economy concept. “Usually in the past it was considered a community garden and people could take,” she said, “but our issue with that was that is that people who weren’t part of the community were taking, or that weren’t giving back to the community were taking.”
“Usually in the past it was considered a community garden and people could take, but our issue with that was that is that people who weren’t part of the community were taking, or that weren’t giving back to the community were taking.”
This issue highlights a common consequence of the sharing economy. While the idea of collaborative consumption is that it is of equal benefit to the creator, the provider, and the consumer, that tenet does not always hold.
As with the Grove House Garden, and other national sharing platforms like Napster, there is often a question of who should be able to use what and how certain services and resources should be repaid. This problem has gotten many collaborative companies into legal trouble, as governments and large corporations accuse peer-to-peer networks of infringing upon their products.
Additional issues can come into play when sharing. As many small business owners and collaborative economy users have discovered, it can be difficult to navigate regulations surrounding taxation, consumer safeguards, established markets, and copyrights.
Take the popular home sharing company, Airbnb; which allows people to rent out unoccupied space to guests. On the one hand, studies have shown that Airbnb and other home sharing programs improve local tourism traffic and expand visitor demographics. On the other hand, Airbnb hosts can potentially run afoul of zoning regulations, landlords, and the IRS. In fact, in Amsterdam, the government actually uses the Airbnb site to track down illicit renters.
Overall, the sharing economy has the ability to do both terrible and wonderful things. No longer just the tool of small start-ups and neighborhood exchanges, large companies and the government have taken notice of the power of sharing. And as the sharing economy expands, the engine of the machine, the sharers themselves, gain even more power to alter the world around them.