Background

Today the lecture focused on collaborative consumption as a phenomenon that represents a specific manifestation of smart cities and smart living. While sharing and bartering goes back to the earliest days of human interaction, today’s mobile technologies make sharing possible in new ways and at new scales.

The presentation was very interactive and got us all thinking about how we collaboratively consume in our lives.  How many of us have used a public library in the past month?  Bought or sold something from CraigsList? Used a carshare service like Zipcar or a peer-to-peer car service? Located a tool or object to borrow from our neighbors?

After these probing questions, the presentation was divided into two sections. The first part focused on collaborative consumption concept and trends. The second focused on the “so what?,” examining the implications for community-building and social impact and resource efficiency and environmental impact.

Rachel Bottsman and Lisa Gatsby are two women who are at the forefront of the movement, writing books and articles, hosting websites, and speaking internationally on the notion of collaborative consumption.  Their websites (collaborativeconsumption.com and http://meshing.it/) serve as clearinghouses for what’s happening in this movement.

Collaborative consumption describes the rapid explosion in systems for sharing, bartering, lending, trading, renting, gifting, and swapping reinvented through network technologies on a scale never possible before. The key idea is that access to goods and spaces is more important than ownership of them. The 20th century (and current model) is “hyperconsumption” – driven by a combination of available credit, aggressive advertising, and a desire for individual ownership. The 21st century model, however, is emerging as one of collaborative consumption – driven rather by reputation, community, and shared access.  This changes the relationship from one of consumer to manufacturer to a whole community sharing.

There are three types of collaborative consumption: product service systems, redistribution markets, and collaborative lifestyles; each of these categories certainly overlap. Product service systems are a product that can be shared or rented by multiple people. You can pay a single company that owns all the resources like Zipcar, or it could be a peer to peer system. Examples include Zipcar, Relay Rides, Zimride, Zilok.  Redistribution markets such as craigslist, ebay, hey neighbor, swap style, book mooch, and thread up are emerging as ways to sell things across the community.  Finally, collaborative lifestyles includes the sharing of lots of things including space.  Examples include CouchSurfing, air bnb, loosecubes, Landshare – (offering yard space for others to grow vegetables), kickstarter, and skillshare.

The group discussed the ways in which some of these monetized “shares” are also not just about making money, but also about building community. For example, couchsurfing is not merely about finding a couch to sleep on, but has become a way that individuals can share their community with travelers, providing a place to sleep but also tips on where to go and what to see in their hometowns.

There are four main components that make collaborative consumption work.

  • Trust between strangers
  • Belief in the commons, a notion that we should take care of things that are shared
  • Idling capacity, the recognition that we have space and objects that are underused
  • Critical mass, a lot of people in a network for you to find what you need when you need it

Again, sharing and bartering are age-old, so what’s different now?  First, technology allows people to add and access content to/from the web easily. Some have said that there is a resurgence of “community” – are we recreating community? Tapping it in a new way? Today has also seen an increase in the public’s concern of the environment and a greater attention to the ways our consumption patterns impact the environment. Finally, some are concerned about cost consciousness.

 

How is collaborative consumption working for Community Building and Social Impact?

One example is HUB Bay Area, which is a non-profit community organization that serves as a  “place for purpose-driven people to connect based on membership.” They provide a curated workspace, community events, and accelerator tools that build community, focused on mentors, funding, and other resources for small business development. Tangibly, HUB provides workspace for small businesses interested in creating social change, and intangibly they provide a space to harness the potential requires the strength and participation of the community.


A second example is the New York based Breakout! Festival which was an experiment in 2009 that explored new and productive ways for people to work together, but creating an “anywhere, anytime office” through utilization of ICT support. The goal was to liberate knowledge-based workers from traditional office spaces, and move their work space to outdoor offices. While high rise office buildings used to be best solution of workers to be close to each other and their paper files, today new modes and spaces of working may make more sense as documentation and paperwork are all digital and telecommunications and formerly fixed office tools are now distributed and portable. Certainly, traditional office buildings will not completely disappear, but the idea is that there is the promise for a new vision of office work and on flexible work schedule and new urban patterns that allow people to divide time between traditional office setting and new spaces.

 

How is collaborative consumption working for improving resource efficiency and environmental impact?

Each of the categories of collaborative consumption offers something to using resources more efficiently and improving environmental outcomes. 

Product service systems address issues of problems of products that we own but only use for small fraction of shelf life . These can now be shared over a number of households. Likewise, Redistribution Markets allow us to access things for the short term but pass them to others for the long term. For example, when we need cardboard boxes for moving, we don’t need to buy them we can trade them on sites that allow us to recycle to others moving after us. Collaborative lifestyles allow us to minimize the “idle” spaces in communities such as office space.

Given these opportunities, does collaborative consumption offer an alternative to “hyperconsumption”? Can it help reduce the rate at which we consume natural resources? And if sharing increases, what does that mean for our communities and how will they grow and change?

The presentation then briefly mentioned a couple of other issues that this movement raises. The first is a question of corporations vs. the people. In what ways is collaborative consumption a democratizing force that enables regular people to save money and reduce dependence and earn income? Or is this just business-as-usual for big corporations? Second, is a question of inclusivity. Who can benefit from collaborative consumption and how does this match up with who is currently using collaborative consumption technology? What culture is reflected in collaborative consumption marketing and branding?

These issues led to lively discussion among our diverse classmates. Some offered that the take-away from a business perspective is that this presents new opportunities for new business models. The example of the recording industry and their slow response to changing demand for listening to music was raised.  Really the question for businesses is how can they innovate to make shared products? And the divide between corporations and people is not a fair one.

Others suggested that while the dichotomy between corporations and people is arguably reductive, it remains true that in the last several decades hyperconsumption funded by debt has meant that consumers generally lost out. The fix that was offered was to keep buying more stuff to great detriment to environment and consumers. Corporations found ways to reinvent themselves but not in a way that was balanced and supported consumers. Perhaps collaborative consumption can bring corporate and consumer interests closer, but at the same time it raises some serious questions about whether production will have to be restructured as demand gets more efficient. If that does occur, what will happen to people making living in the production facilities?

Further, others suggested that the leading edge of this kind of paradigm is in fact coming out of an anti-corporate perspective, and that this ethos is important part of origins of movement. Discussion then moved towards big picture questions of macroeconomics and are these models that can fit into traditional capitalistic growth, will they kill or industries, and what does this all mean? Will the collaborative consumption efforts remain the purview of informal cash exchange or incorporated into more formal parts of economic growth models?

The group also discussed how collaborative consumption was the norm before hyperconsumption and in fact resource sharing is still the norm in many parts of the world and lower income communities in the United States.  Trust and social bonds is the only way to live in poor communities in the developing world. Corporations developing “products for the poor” are actually aiming to break these communal bonds. So while this movement is talking about how to move our economy to a more collaborative model, there is a question of if we are going to force economies to go through the same cycle of individual hyperconsumption first, or can developing countries leapfrog to new economy that is grounded in collaborative consumption and builds on their current mode of consumption?

This example of collaborative consumption in India spurred additional conversations about who is using these models? Is it only people on the internet? Is this phenomenon just going to be affluent creative class? What is the opportunity to use collaborative consumption as a way to rethink redistributive potential of the economy? How do we account for less demand? Does this decrease production? How do countries deal with the prospect of 20% permanent unemployment rates? What is the role of the government in regulating production to ensure that we have equitable distribution of the profits from selling less goods?

While these big questions are exciting, we also are reminded that this movement is happening gradually and probably will be adaptation in the long term, but for now, among more affluent people, it remains a nascent process in the United States, Europe and Australia.

Finally, additional questions were raised about how to tax income, the impacts on municipal finance of lost tax revenue (e.g. with tourists staying at airbnb instead of traditional hotels that charge a hotel tax), and issues of trust and liability (in the case of peer-to-peer carsharing). To what extent does anonymous lending make a difference in issues of trust and liability? To what extent does peer-lending and social pressure and bonds encourage positive social behavior and cultivate trust?

 

Will others follow car insurance companies in threatening to strip insurance from car sharers?

According to a New York Times article, “Share a Car, Risk Your Insurance,” some car insurance companies including USAA, Allstate, and the Insurance Information Institute are reportedly considering stripping coverage from car owners if they even hear that owners are participating in car sharing. While car sharing company Relay Rides provides $1 million of liability coverage in the event that someone is killed or seriously maimed by a driver of the owner’s vehicle such that the owner isn’t in a bad position if their car insurer refuses to cover such an incident, car insurers still stated that the owner may not be renewed or may even lose their coverage after an accident.

In addition to car sharing companies, will other sharing companies’ participants such as couchsurfing, air bnb, and landshare that share property find themselves subject to scrutiny over insurance coverage issues by property and home insurance companies? Three states, California, Oregon, and Washington have passed laws that keep car insurance companies from stripping car coverage from car sharing owners. Can they do the same for home/land hosts if home and property insurance companies follow the path of car insurance companies?

After two users of air bnb were victims of vandalism and theft the company announced a $50,000 insurance policy but this would in no way cover total property or home destruction. A possible solution to concerns with insurers may be the development of a new insurance profile that includes sharing that will still allow sharing to be feasible for owners. Currently, owners have no choice but to deceive insurers in the event that their insurance companies state that sharing of their property, home, or cars will lead to rescinding of their coverage. If not, owners will have to find other companies that are accepting of sharing or go without coverage at all. It would seem that the best solution to these concerns would be for insurance companies and sharing companies to increase the dialogue on the topic and collaborate. Eventually details will have to be hashed out as the sharing community continues to increase in size.

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