Is the Sharing Economy Dead?

Excuse me, may I borrow your drill? . (Photo: Scott Vincent/flickr)

There are really two kinds of "sharing economies" — the big, corporate Uber and AirBnB kind that has been called "disaster capitalism" and doesn't have a whole lot to do with real sharing, and what Rachel Botsman called "collaborative consumption." In an interview with Jaymi Heimbuch in 2011, she explained:

There are examples like peer-to-peer rental, where people are using platforms such as Neighborgoods or Snapgoods. 'Owners' are realizing they can make money from renting out their assets peer-to-peer and 'renters' are experiencing the benefits of not needing to own. Finally, you have examples like 'swap trading' where people suddenly realize they are surrounded by assets they can swap to get what they want versus buying new stuff. The behavior becomes addictive.

It all made so much sense. Before it was called the sharing economy or collaborative consumption, it was known as a PSS, a product service system.

Basically it is about providing the service of the product — what it does for you — without requiring the individual ownership.... Because we, in essence, share such human resources, instead of each of us all owning one apiece, the demand on natural resources is massively reduced.

A library was a public PSS; a laundromat a private one. They were shared, but in a fixed location because people had to know where to find it. The Internet, computer and smartphone changed all that; suddenly it was easy to set up systems to share everything. And it seemed to make sense to share instead of own. As Botsman pointed out in a TED talk about owning a power drill:

That power drill will be used around 12 to 15 minutes in its entire lifetime. It’s kind of ridiculous, isn’t it? Because what you need is the hole, not the drill.

Or not. On Fast Company, Sarah Kessler writes that The sharing economy is dead, and we killed it. She notes that everybody jumped on the drill analogy; I thought Alex Steffen actually came up with it. The CEO of AirBnB used it. The New York Times covered it. Except it turned out not to be true; drills are cheap now, under $30, and nobody bothered. As the founder of the now defunct Snapgoods tells Kessler:

For a drill, which by the way now costs $30, and you can get it on Amazon Now and have this thing delivered to you in an hour if you live in New York City — for something worth $30, is it really worth your time to trek potentially 25 minutes to go get something that you spent $15 to use for the day, and then have to trek back?"

And then there's the question of whether the person is there at the time you arrange, whether the drill bits are sharp, whether there are any missing and the owner complains that you lost it. That doesn't happen with Home Depot tool rentals, but you get the idea. Sharing can be real work. I personally have wasted a lot of time Freecycling stuff I didn't need, waiting for people who never showed up.

There have been so many attempts at this. Matt has covered a few of them, from Peerby for tools to AirPnP for toilets to Parkatmyhouse for driveways. Most never got off the ground, have been challenged as illegal, folded quickly or died slowly, but the track record is terrible. Every one wanted to be the Uber of this or the AirBnB of that. So what really happened?

Kitchen Library
Stuff you can get at the Kitchen Library. (Photo: Kitchen Library)

Adam Berk, who tried to start a program called Neighborrow, believes that "the core problem with the idea was not trust, insurance, funding, interface, or anything other than human apathy." I'm not so sure. I suspect that people are fundamentally nervous about other people coming into their houses to borrow something. I've had some very creepy people show up to see my Freecycling. That's why I think libraries work, whether for books, tools or kitchen accessories. The stuff is in a fixed location that is separate from people's homes. There is an intermediary. But to bang on the door of someone I don't know to borrow a drill? Really, it's easier, and less threatening, just to buy one.

In Matt's coverage of Peerby, he writes:

Peerby brings the suburban/small town tradition of knocking on a neighbor's door and asking to borrow something — Marilyn, mind if I borrow your hand mixer, telescope and electronic foot file for the night? And while I'm here, think I could get my overhead projector and ouija board back? — into a 21st century urban context. Many city-dwellers don’t even know their immediate neighbors’ names, so why in the world would they ask the guy who lives down the hall to borrow his power drill for a couple of hours?

He says that an app makes a difference in connecting people, but times have changed and people don't often borrow cups of sugar anymore. Even when they know their neighbors, they go to the store and buy it. People often don't want to know their neighbors. Robert Putman, in "Bowling Alone," notes that "changes in work, family structure, age, suburban life, television, computers, women’s roles and other factors" have all driven us apart.

I suspect that there are worries about trust and privacy that outweigh people's willingness to share stuff. But then I'm always surprised that AirBnB took off, that people would be willing to sleep in someone else's bedroom or to have someone out of the blue sleep in their spare room. Perhaps the economic incentive is there in a way it isn't with a $30 drill.

I'm not sure that Kessler is right in saying that the sharing economy is dead; I'm not certain that it was ever really alive in the first place. I would love to hear in comments from others about whether it has worked for them.