We were promised an "ownership society."* It was President George W. Bush's campaign slogan when he ran for reelection in 2004. The comforting term invoked responsibility and stability. It connoted a patchwork of plots, homes, and fences extending into the horizon of every city suburb.
So much for campaign promises. Today, we're suffering a crisis of ownership, and Bush's slogan reads like an epitaph to an era of hyperconsumption. Housing, the global mascot of the ownership society, is now the weakest market in the country, and sales haven't looked this meager since the middle of the 20th century. High gas prices and congested suburbs have put wind behind car- and bike-sharing companies. And it's not just homes and vehicles that are feeling disturbed. As Danielle Sacks explains in this superb Fast Company feature story, we are witnessing the triumph of a sharing economy.
"Spawned by a confluence of the economic crisis, environmental concerns,
and the maturation of the social web, an entirely new generation of
businesses is popping up" enabling the sharing of DVDs, cars, clothes, and skills, she writes. Think of eBay's ability to instantly match buyers and sellers across the country online. Now imagine an eBay for renting: your couch, your car, your furniture, your baby clothes, your yacht, your Cuisinart. That's the promise of a post-ownership society. Do more, own less, rent the rest.
Do more, own less, rent the rest.
Sacks provides much more than an inventory of the sharing economy (at a glimpse: THREDUP.COM shares used kids clothes and toys, LIQUIDSPACE.COM helps you find rentable work spaces; NEIGHBORGOODS.NET helps neighbors share appliances and tools). She asks tough questions like: Why on earth would you trust somebody you don't know with your car, couch or Cuisinart?
One new start-up that meets this need to verify trust in a renting economy is TrustCloud, which has built an algorithm to collect and analyze your Internet-wide "data exhaust." It's like a credit rating for your online identity and activity, scraping your community ratings from Yelp and TripAdvisor to provide a broader portfolio for each renter's trustworthiness.
Let's assume that the sharing economy isn't a fad, but rather a foreshadowing. Is it good for the United States?
In a triumphant sharing economy, one economist tells Sacks, consumers would buy 10% less and "share" 10% more. The benefits from higher savings among American consumers are plain as day: more investment, greater retirement security, a thicker buffer against the risk of economic shock, and even higher exports, as companies look overseas to supplement sales.
This also ties into Paul Saffo's exciting idea that we're moving past the producer-economy (the Industrial Revolution) and the consumer-economy (most of the 20th century) into a producer-consumer economy. Saffo's vision of the producer-consumer (or "creator") economy is a network of users constantly producing valuable information as they consume products. For example, our very use of Google search and Mint.com create valuable information for the proprietors.
The sharing economy offers a new lens for the producer-consumer. In a peer-to-peer sharing system, every owner would also be a potential renter seeking income from his car, couch and Cuisinart, should he decide to share them. Pottery Barn and Home Depot and Target would suddenly have new competition: Your neighbor.
Corporations are already responding. Daimler has introduced a Car2Go service, its answer to Zipcar, which allows you to locate a nearby car for rent and drive it anywhere. New online-banking technology looks to cut out the banks from direct lending. It's foolish at the larvae stage of this movement to extrapolate wildly, but suffice it to say that the if ownership is not dead, it is currently in decline. The Web has built windows into millions of families' homes and garages and let rent-happy customers ask, "Hey, can I use that for a second?" If those millions of families keep responding yes, we're on the verge of an exciting new chapter in American consumerism.
*It is perhaps a sign of things that Bush didn't really "own" the phrase "ownership society." He borrowed it from British PM Margaret Thatcher, who promised "a property-owning democracy," which was later updated and expanded by Gordon Brown's promise of a "homeowning, asset-owning, wealth-owning democracy."