Collaborative Consumption

= when a community gets together “through organized sharing, swapping, bartering, trading, gifting and renting to get the same pleasures of ownership with reduced personal cost and burden, and lower environmental impact [1]

URL = http://www.collaborativeconsumption.com

Definition

From the Wikipedia:

"The term collaborative consumption is used to describe the cultural and economic force away from 'hyper-consumption' to re-invented economic models of sharing, swapping, bartering, trading or renting that have been enabled by advances in social media and peer-to-peer online platforms." (http://en.wikipedia.org/wiki/Collaborative_consumption)

Typology

According to Rachel Botsman et al:

Product Service Systems

"Initiatives based on a 'usage mindset' where people pay for the benefit of having access to product as opposed paying more to own it outright. Examples include: Carsharing (Zipcar), Bikesharing (Velib), toy rental (www.mybabyplays.com, www.rentatoy.com), movie rental (Netflix), tools (TechShop), luxury goods (www.borrowedbling.com).

Product service systems have existed for years (e.g. Libraries and laundromats) but they are gaining new relevance and appeal because technology is enabling them to provide choice and convenience.

There is also a growing interest in Peer-to-Peer Rental and Neighbourhood Product Service Systems: rather than consumers renting services from businesses, platforms are emerging to facilitate shared usage with each other.

Examples include: P2P Carsharing: http://www.drivemycarrentals.com.au, www.relayrides.com, www.whipcar.com P2P Goods Rental: www.zilok.com, www.rentoid.com, www.hirethings.co.nz, Neighbourhood sharing: http://www.beta.neighborrow.com, www.wecommune.com, www.sharesomesugar.com, www.neighborgoods.net ." (http://en.wikipedia.org/wiki/Collaborative_consumption)

Redistribution Markets

"This system is based on used or pre-owned goods being passed on from someone who does not want them to someone who does want them. This is another alternative to the more common 'reduce, reuse, recycle, repair' methods of dealing with waste.

Examples include: Clothes swapping (ThredUp, Craigslist, eBay), Swap trading (Swaptree.com, Freecycle), Book swapping (BookMooch, ReaditSwapit)." (http://en.wikipedia.org/wiki/Collaborative_consumption)

Collaborative Lifestyles

"This system is based on the sharing and exchange of resources and assets such as space, skills, time and money.

Examples include: Peer-to-peer lending (Zopa), Coworking (HubCulture), Time banks, LETS, Couchsurfing, Garden sharing (www.landshare.com, www.sharedearth.com), Co-housing, peer-to-peer room rental (www.airbnb.com, www.roomorama.com), skill-sharing (www.tradeschool.com), bartering (ITEX, Bartercard, http://ourgoods.org)" (http://en.wikipedia.org/wiki/Collaborative_consumption)

Discussion

Guidelines for collaborative consumption

Simon Smith:

"Seeing all this happening, and experiencing the benefits first-hand, I’ve become somewhat of a transumerist evangelist. (I also keep pondering entrepreneurial opportunities in this emerging space—what’s next to move from ownership to sharing?) While there are no hard and fast rules for the emerging transumerist worldview, I wanted to capture some of my own changes in mindset:

• Ownership is a last resort. The question used to be, “Why rent when you can own?” This most often applied to homes, but people would often apply it to other possessions as well. I would now ask the opposite question. Why own when you can rent or share? The primary reasons to own, in my opinion, are appreciation in value (if that appreciation offsets negative implications of ownership) and high frequency of use. Most other benefits usually aren’t worth the tradeoff. Which brings me to the next point.

• Ownership is a tradeoff. One of my favorite lines from the movie Fight Club is this: “The things you own end up owning you.” (Followed by: “It’s only after you lose everything that you’re free to do anything.”) We’re saturated in marketing messages (and I’m a marketer, so am partly responsible) that describe the benefits of ownership. Why own a car? Well, freedom, of course—freedom to go where you want, when you want, while attracting the hottest members of the opposite sex. No successful marketing campaign will promote the risks,side-effects and negative repercussions of ownership (except, perhaps, when compelled by law, such as with medications). But they’re always there. With cars, for example, there are things like maintenance costs, depreciation and, of course, worrying about things like theft. Because of these concerns, the car you own, which promises freedom, will always own you and, in some way, restrain your actions.

• Ownership always looks better in hindsight. One interesting finding from research in behavioral economics, and documented in Dan Ariely‘s excellent book Predictably Irrational, is that we overvalue things we own. This includes material possessions, as well as our ideas (admittedly including my ideas in this post). Why, when selling something, do you usually think it’s worth more than when you’re buying something? Because we become quite irrational about things we own.

• Experiences provide more lasting happiness than material possessions. Research on well-being has long attempted to correlate material wealth with happiness. And findings consistently show that money only makes us happy to a point (about $60,000 per year, according to some research). What’s more, purchasing experiences make us happier than purchasing material stuff. One of the reasons is that our nervous system becomes accustomed to our stuff, the way drug addicts become accustomed to their drugs and must increasingly up the dose to get high. A Porsche in the driveway will make you happy today, perhaps, but one year out you’ll be pining for a Ferrari. But you’re just treading water; you have to keep upping the ante just to maintain the initial high. Experiences, like travel (and, say, having access to, but not ownership of, cool cars), are different. They appear to provide lasting value, in part because they give us stories to tell repeatedly, and because they often form the foundation for happy memories."

(http://shareable.net/blog/a-transumer-manifesto)

Key Book to Read

• Rachel Botsman et al: The Rise of Collaborative Consumption

"Collaborative consumption is the subject of the book, "What's Mine is Yours: The Rise of Collaborative Consumption," (ISBN 0061963542) co-authored by Rachel Botsman and Roo Rogers, published by HarperBusiness (release date September 28, 2010) [3]. Botsman and Rogers identify the changes in our economy that have led to the resurgence of bartering, lending, trading, sharing, renting and swapping, demonstrating the potential of collaborative consumption to disrupt the business world and reinvent "not only what we consume but how we consume"[4].

The authors emphasise the importance of technology, in particular social networks, in enabling this 'big shift' towards collaborative consumption, as these real time technologies allow people to develop new ways to share with others, regardless of geographical boundaries, whilst still achieving the satisfaction that comes with 'consumption' in general [5]. Botsman featured as a speaker at the independently organised TED event, TEDx Sydney in May 2010 [6].

The book outlines three major categories of collaborative consumption ventures, demonstrating an explosion in sharing, swapping, trading, renting and lending across a range of areas from transportation to fashion to swapping books, movies and music." (http://en.wikipedia.org/wiki/Collaborative_consumption)

Examples

1. Car Sharing