Collaborative Consumption

A new economic model has arrived and it’s revolutionising society.

Named by TIME as one of the “10 Ideas That Will Change the World”, collaborative consumption describes the shift in consumer values from ownership to access.

Also known as the sharing economy, it is the general concept that people and businesses share the resources they have, reducing consumption and waste and alleviating the pressure on our already tightened purse strings.

The essence of what collaborative consumption is about could have a profound impact on our society. As Rachel Botsman, the pioneer in collaborative consumption predicts in her thought-provoking TEDx talk.

“The way we think about supply and demand will change; the relationship between buyers and sellers will be disrupted; and the person formerly known as the ‘consumer’ will now get what they need from each other, taking control and value away from big centralised companies.”

– Rachael Botsman, Pioneer of Collaborative consumption.

Many of the collaborative consumption models are peer-to-peer transactions, in which strangers rent, loan or give each other items or services. You’ll probably be familiar with online platforms such as Gumtree or AirBnB. These sites have been around for some time now and have enabled millions of people to make money from underused assets by either selling or renting them. Essentially, the sharing concept has created markets out of things that wouldn’t have been considered monetisable assets before.

Furthermore, we are seeing a shift towards community collaboration projects, where individuals are coming together to share resources without financial gain. This includes the sharing of space and food as seen with Mama Bake where Mums get together regularly to “big batch bake”. Each brings one big meal, they divide it up amongst them and go home with a number of meals cooked for the week, saving time and resources. What’s also interesting is the development of shared distribution networks such as community solar schemes where people are financially collaborating, taking the power away from the centralised institutions and gaining ownership as a community.

Sharing means we are easily able to put idle assets to productive use – take a power drill for example, on average it will be used for around 12 minutes in its entire life span yet costs upwards of $200. It doesn’t really sound like such a great investment when considered that way. So what if you could find people in your area who need one and hire it to your neighbors for $10 a day? With sites like www.openshed.com.au it’s possible to find or rent your tools, sports or camping gear. You get to make some cash, your neighbor saves money on buying a new tool and collectively, we reduce the amount of household items we consume, thus reducing our environmental footprint.

Rachel Botsman clarifies the types of sharing we are starting to see develop and how they differ from one another.

Collaborative Economy – An economy built on distribution networks of connected individuals and communities versus centralised institutions, transforming how we produce, consume, finance and learn.

Collaborative Consumption – An economic model based on sharing, swapping, trading or renting products and services enabling access over ownership. It’s reinventing not just what we consume but how we consume.

Sharing Economy – An economic model based on sharing underutilized assets from spaces to skills, to stuff for non monetary benefits.

Peer Economy – Person to person marketplaces that facilitate the sharing and direct trade of products and services built on peer trust.

As an economic movement, collaborative consumption is currently valued at around $26 billion and at the beginning of 2013, Forbes predicted the sharing economy would be a “disruptive economic force.” Venture capitalists and corporations are paying attention as well. Earlier this year, Avis Budget Group paid about $500 million for Zipcar, a car-sharing site. AirBnB, has an estimated worth of as much as $2.5 billion and we are starting to see crowd funded start-ups gain significant investment from corporations as well as individuals.

Why Now?

The concept is not new. Essentially, it’s an ancient practice that technology, particularly the rise of social media is reinvigorating.

There are a number of contributing factors that have sparked the growth in this movement. The global economic crisis is undeniably a driving factor. Many are living in an age of austerity either unable to afford to purchase items themselves or, forced to sell or rent to generate income.

At its core however, is the meteoric growth in technology, which has enabled the movement to take place on such a huge scale and gain traction so rapidly. Websites, apps and social media all facilitate the global sharing of information that have enabled a societal shift to take place, empowering us as consumers and allowing us to become peer-to-peer collaborators on a global scale.

Finally, a focus on environmental issues and an increase in the number of people with a desire to reduce their carbon footprint by consuming less has led to the movement being supported by a passionate environmental community.

An example of a rapid cultural shift towards collaborative consumption comes from the Greeks who, tired of inflated prices and devalued money, have begun to resurrect an alternative economy. In the years since Greece’s economy has collapsed, more than a hundred networks, which deal in non-currency transactions, have sprung up across the country. At the center of this movement is Timebank, a sharing concept based on time where Greeks are able to trade personal skills such as plumbing or hairdressing with each other to allow them to access basic services they can no longer afford. An English lesson can be traded for a car service or a hair cut.

The rise of the community

More than just a solution for overconsumption or a money saving ploy, collaborative consumption is reliant on the concept of community. It encourages people, who might not otherwise meet, to connect. In order for the sharing economy to work, the systems require a certain level of trust among complete strangers, enabling major cultural and behavioral shifts. What’s so great about collaborative consumption is that it is helping people to meet their neighbours, often for the first time and forge long lasting community ties.

The unstoppable rise of sharing

2014 is on track to become the year collaborative consumption hits the mainstream. FORBES estimates the revenue flowing through the share economy directly into people’s wallets will surpass $3.5 billion this year, with growth exceeding 25%. At that rate peer-to-peer sharing is moving from an income boost into a disruptive economic force.

As Rachel Botsman reiterates; “We are taking a leap to create a more sustainable system built to serve our innate needs for community and individual identity. When society faced with great challenges, made a seismic shift, from individual getting and spending towards a rediscovery of collective good.”

So what can you share?

It’s not just personal household items that people are sharing but also time, skills and space.

Sharing is also not exclusively for those without the money to buy, the super rich have been known to share their boats and yachts and it’s starting to attract the interest of a number of Fortune 500 companies.

Some of our favourites include:

Solar sharing
Community renewable energy schemes, including community solar power, are catching on worldwide and Australia is no exception to this growing trend. A new initiative in New South Wales, Farming the Sun, is Australia’s largest community solar energy initiative to date. Community solar projects allow local people from local communities to pool together small investments in order to build and buy a solar farm.

Car Sharing
Car next door is another new site that allows you to find and rent cars from people in your neighbourhood. This fantastic concept enables people to make money to cover the cost of the car which is often sitting idle in a driveway. It also reduces the number of cars on the road by providing an affordable alternative to buying your own – they currently rent at around $25 a day which is far cheaper than most hire companies. Although based on trust to an extent, the company provides comprehensive insurance & borrowers receive feedback and can be banned if they don’t play by the rules.

Land sharing
Landshare Australia brings together people who have a passion for home-grown food, connecting those who have land to share with those who need land for cultivating food. Community gardens are also on the rise, providing spaces where people can come together to grow fresh food, learn and make new friends. The Australian City Farms and Community Gardens Network connects community gardeners around Australia.

Food Swapping
Swaps are generally money free and run on an honesty system. Swappers bring their produce and then ‘shop’ from the table of goods left by others. Local Harvest and GrowitLocal connect growers with people in their local area. They also provide information on organic farming and agriculture.

Bike Sharing
Now a staple in many international cities such as London and Melbourne, Government owned bike sharing schemes are effectively taking cars off the roads and making it easier than ever for people to access efficient transport.

Crowdfunding
This is essentially sharing your money to invest in something you believe in. StartSomeGood is a crowdfunding platform for non-profits, social entrepreneurs and changemakers to raise funds and grow a community of supporters.

Lift sharing
Lift sharing or car-pooling is not a new concept but has definitely picked up momentum in recent times. Sites such as CoSeats allow drivers to find passengers who can contribute to the cost of a long journey – particularly useful when on long journeys across Australia.
For a comprehensive list of sharing sites in Australia visit the collaborative consumption website.

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