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The Real Sharing Economy Is Booming (And It's Not the One Venture Capitalists Are Cashing In On)

The peer-to-peer rental economy has gotten a high-tech makeover.
 
 
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Photo Credit: Shutterstock.com/ Ivelin Radkov

 
 
 
 

After picking more limes than I’ll ever eat from the tree near my apartment, I log onto Facebook and post about them on the Backyard Fruit Swap group I belong to. Someone offers me passion fruits for the limes, and someone else offers guavas. “What kind of guavas?” I reply. I don’t like pineapple guavas.

Compared to the rest of the U.S., my home of San Diego can grow some strange types of fruit. Aside from that, my online exchange is not so odd. Sharing is now in vogue—or perhaps it always was.

In human history, the so-called sharing economy is older than money and capitalism. Before anyone came up with the clever idea of giving set values to bits of metal and paper, people figured out that everyone could benefit by bartering and sharing. Sometimes this took the form of barter. You give me some of the fish you caught and I give you some of my crops. You help me harvest my field and I help you harvest yours. Sometimes it takes the form of gifts, seemingly given altruistically, but almost always returned at some point by a reciprocal gift or favor.

Other times, it could be codified by cultural traditions, as in the case of a dowry given at the time of marriage. Or, a group of people might collaborate on a hunt and share the meat based on a specific protocol: the person who made the kill gets certain cuts of meat, the person whose arrow was used gets other cuts, and others who participated in the hunt might get other portions of the animal.

Today, this age-old system is getting a high-tech makeover, and a lot of media attention from BBC, Marketplace, NPR, the Guardian, and Fast Company. But are the sites and apps getting the attention actually sharing, or just a new way to rent or sell goods and services?

One of the most common items “shared” are cars. Think about your car. Does it spend more time sitting in your garage or on the road? If the former, you might be one of the people who could profit by listing your car on sites like FlightCar, GetAround, Car2Go, RelayRides, or BuzzCar and renting it out to strangers. Or perhaps you could ditch your car altogether and rely on public transportation, biking, walking, and occasional rentals from neighbors who list their cars on those sites.

Obviously, once you add money into the mix, you’re no longer talking about sharing. Perhaps that’s why venture capitalists are getting excited about the sharing economy. In the US, the sharing economy (more accurately known as the “peer-to-peer rental economy” or “underused asset utilization”) is estimated at $3 to $4 billion and growing.

As noted on All Things Considered, “We’re not really talking about sharing, but selling.” And selling everything from stays in your house or office and meeting space rental to dog boarding, handmade goods, used clothing, and parking spots. Or, if you don’t feel like doing small tasks like putting together your IKEA furniture or weeding your garden, you can pay someone to do it on Taskrabbit.

It makes sense that someone wouldn’t want strangers to use their car for free (or without insurance), but there is a real sharing economy worthy of media attention, and it’s one that wouldn’t interest venture capitalists because it’s based on actual sharing.

As noted, sharing is not a new idea. Perhaps you remember reading in Little House on the Prairie how Pa traded work with the Ingalls’ neighbor, Mr. Edwards, or swapped furs for a plow and seeds? But Pa certainly did not log onto Carpooling.com or Zimride to find a ride out to Indian Territory. Laura’s family was stuck driving there in their covered wagon.

 
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