‘Sharing’ takes on new meaning in changing economy

Listening to business news lately, it would appear the American economy is on a roll. Corporate profits are up, the stock markets have had a great year, and it even seems as though consumers are spending again. But many Americans are still not reaping the benefits of this recent growth and unemployment remains stubbornly high.

Frustrated with the perceived lack of opportunity, and also looking for a different way to get things done, many people are turning to an emerging peer-to-peer network, euphemistically called the sharing economy or collaborative consumption.

It works like this: people who own homes, cars, tools, bicycles and other assets rent them directly to users via a host of new websites and apps that facilitate the transaction for a fee.

The phenomenon began in 2008 with the launch of Airbedandbreakfast.com, which sought to rent airbeds in San Francisco apartments to people visiting the area. The idea grew, with the assistance of significant investment capital, and now the renamed Airbnb offers accommodations from a single room to an entire castle in 192 countries with over 300,000 listings in 33,000 cities, according to the firm’s website.

Today there are dozens of start-ups that use a similar concept to rent users’ assets or time. Popular sites include: Lyft for ride sharing; TaskRabbit for small jobs around the house; RelayRides to rent personal vehicles; and SnapGoods to rent or lend household goods.

It may be tempting to dismiss these businesses as just another type of Internet-based retailing. However, just as eBay revolutionized the collectibles market 18 years ago by providing a platform for sellers to connect directly with buyers, the sharing economy is similarly upsetting current business models by eliminating retailers.

An article in Forbes Magazine published in January estimated that revenue flowing through the sharing economy will surpass $3.5 billion this year and will have a growth rate of 25 percent. At that pace, “peer-to-peer sharing is moving from an income boost in a stagnant economy into a disruptive economic force,” according to the magazine.

As the sharing economy grows, it’s still concentrated in large metropolitan areas, even passing by the suburbs of these big cities. For instance, there are only 5 listings on Airbnb in Claremont, one of which appears to be spam. Car sharing website RelayRides lists 3 vehicles in Claremont and shows a total of only 5 rental transactions.

But the effects are beginning to be felt.

Recent Claremont expatriate Jess Block Nerren uses the task-sharing site Fancy Hands to help with her business Felton Media Services.

“Over the past month it gave me back 5 hours of billable time, it’s hard to calculate just how valuable that is,” said Ms. Block Nerren.

The site charges a $25 flat fee for the first 5 tasks and then $5 for each additional job. They will do just about anything that can be done remotely. She had them coordinate a conference call, research airport lounge availability in Seattle, and book her son’s birthday party. “It’s so cool that they’ll do anything,” she said.

Claremont businesswoman Becky Kachlik has recently stared using Airbnb to find tenants for her vacation rental in South Lake Tahoe. She largely manages the property herself, however she has used Tripadvisor and Flipkey as marketing tools. Ms. Kachlik says that the process Airbnb, used to review potential renters, is a little more thorough than that of other sites and that she gets a better feel for the person. As a result, she feels more comfortable with the renters that come through Airbnb. She says, “it’s a lot more personal, you can see the person’s likes and dislikes.”

If Claremont seems off the grid in terms of the sharing economy, that doesn’t mean people here are not taking advantage of these sites when looking for travel deals.

Claremont resident Jason Cruz travels frequently teaching the Filipino martial arts discipline the Kali method. He has used Airbnb to find nice and affordable accommodations in England, Ireland, and France. “It’s awesome to connect with people from other places (plus) it costs less and you get treated very well.”

Of course, huge problems remain. There’s the creepy factor some have described at the prospect of having a stranger in one’s house or the potential liability if someone is killed by one’s car with a RelayRides driver at the wheel. Every new peer-to-peer business clearly addresses the safety and security issues, and RelayRides has a $1 million insurance policy, yet it remains largely unknown who is deemed liable if tragedy occurs and the damages exceed a company’s insurance coverage.

In May, the New York State Department of Financial Services issued a public warning about RelayRides and other car-sharing programs. “Beware that you will likely be responsible for damages and injuries stemming from accidents during the rental period, and in violation of your auto insurance policy.” The agency went a step further issuing a cease and desist order to the company.

In response, RelayRides ceased operations in the state.

Another obstacle for the peer-to-peer rental of real property is the presence of local zoning laws that regulate how homeowners use their properties.

According to Brian Desatnick, director of community development for the city of Claremont, it is legal for a homeowner to rent a room in their home on a monthly basis, but not on a nightly basis. Chapter 16 of the municipal code section about the rental of rooms in single family homes states that rooms shall not have kitchens and not be rented for periods shorter that 30 days. He also noted that the city probably would not crack down on the practice unless there was a complaint.

It remains to be seen whether this will be a revolution of the economic model or simply another way for a handful of clever individuals to get rich via the Internet. Still, in 2011 Time magazine included the sharing economy on its list of “10 Ideas that will Change the World.” The magazine noted that the 20th century was all about accumulating stuff, but that the next generation seemed more inclined to share.

“There’s a green element here, of course: sharing and renting more stuff means producing and wasting less stuff, which is good for the planet and even better for one’s self-image,” according to the magazine.

In the meantime, this new economic venue will undoubtedly change how we look at the things we own and the goods and services we need.

—Steven Felschundneff

steven@claremont-courier.com