Collaborative Consumption: Join The New It Biz

Increasingly, economists and social scientists are paying serious attention to the collaborative economy

March 26, 2013 | By: High50

Forget the conspicuous consumption of the ’80s—from Air BnB to Zip Car, in the digital age it’s all about collaborative consumption. What’s mine is also yours! By Andrew Belonsky

Who could forget the neon-colored ’80s? It was a me decade of conspicuous consumption and all matters of greed were good. And the ’90s! There were a few hiccups, but ultimately they ended up being even more over-the-top and gratuitous. Credit was king and we were all on top of the world!

Until we weren’t. The 21st century, seemingly so bright at its dawn, crashed into a recession, bringing old certainties down with it.

In the wake of the collapse of a traditional commercial system, and on the swell of technological advances, a new shopping trend is challenging stodgy old attitudes about ownership and materialism. The trend has been nicknamed collaborative consumption. It’s an old-new way of thinking about community. Covetous hoarding has been replaced by recirculation and reuse.

Collaborative consumption is “based on a culture of access, use, and recirculation of goods and services as alternatives to private ownership,” says Connor Fitzmaurice, a Boston University graduate student working on The Connected Consumption Project.


Online outposts like Craigslist, Swap.com, ZipCar and AirBnB, a site dedicated to linking up travelers with like-minded hosts, led the way in reshaping how people spend and make money, moving the dollars and cents from big business back toward small communities.

And as time passes, economists and social scientists have been taking a closer look at this collaborative, trade-oriented economy. Just look at Rachel Botsman and Roo Rogers. The authors worked together on a 2010 book called What’s Mine Is Yours: The Rise of Collaborative Consumption that says technology allows the return of seemingly outdated trade routes, ones that place less emphasis on personal ownership.

“Technology has allowed us to virtually shrink our communities again into a more manageable form, whilst also giving us the personal checks and balances we lost as our society grew,” says Lauren Anderson, Community Director for CollaborativeConsumption.com, the virtual spin-off of Botsman and Rogers’ book.

Par Andler, Chief Marketing Officer at Netcycler, the Finnish company that bought Swap.com, agrees, saying that prior to the Internet  “there really weren’t very practical alternatives to buying and owning physical goods… The Web makes it practical and easy to use these alternatives today”.

“Sharing is something that people have always done, and even though we typically think about consumption as an individual behavior it really is a social process,” says Fitzmaurice. “In that sense, consumption has always involved connection.”

So technology alone can’t explain the rise of collaborative consumption. Obviously the economy had a role to play. With little cash and a surplus of time and talent, the 99 percent are taking up bartering or time banking, an economy in which all services are given the same value, or time, and exchanged for one another.

And environmental concerns too are pushing people toward dividing ownership among fellow locals. Why buy a car when you can share one with neighbors?

Some collaborative consumption gurus are confident we’re experiencing an economic sea change, the revival of old trade practices thought lost in the blur of mass production. “The shift towards Collaborative Consumption is only just beginning, but it will be a major trend going forward,” says Andler.

And Anderson from CollaborativeConsumption.com says, “For the next few decades, we believe collaborative consumption will sit alongside the traditional capital-based market, but over time as technology becomes even more efficient and our products start to be designed with sharing in mind, we will see an increase in the access-based economy of collaborative consumption.”

But not everyone’s so cheery about collaborative consumption’s impact and influence. “While the values and practices of connected consumption are often deliberately crafted to build ‘social capital’—an individual’s connections across social networks—this isn’t always achieved in practice,” explains Fitzmaurice.

As an example, he points to time banking. In time banking, people’s time is traded equally. A plumber and a banker are, in theory, equal, “but few individuals are willing to devalue their own skills—effectively limiting their potential for social connection to similarly skilled individuals.”

Fitzmaurice says he “absolutely” believes what he calls connected consumption, particularly peer-to-peer outlets like the personal shopping site TaskRabbit, Artsicle, which lets users rent fine art, and ThredUp, a virtual outpost where used children’s clothes are swapped and RentTheRunway, could have enormous impact on our culture.

Though these exchanges are completely minute when compared to the economy as a whole, they “represent a significantly greater degree of social interaction than is experienced in many traditional market exchanges,” says Fitzmaurice. The name of the game is no longer ownership; renting is fine, and actually preferable for this downsized world.

But will this economy leave a lasting mark on the business world at large? Business leaders “are probably not very clued in on this whole thing so far,” says Andler. “That will come later when the scale of collaborative consumption becomes significant enough to impact traditional manufacturing businesses.”

In fact, he says, by downsizing the assembly line, “we can bring high-quality manufacturing back to the Western World.”

Yet already we’re seeing large companies get in on the sharing action: EMI, Sony, and Warner Music have gone in together on song-streaming service Spotify, which had about $500 million revenue in 2012. Sharing is caring indeed.

These sites dedicated to collaborative consumption may be the wave of the future, or at least save your future bank account:

Air BnB Traveling or looking to host? Either way, AirBnB’s network of trusted, well-reviewed members can help with affordable, friendly and hopefully memorable accommodations in 192 countries.

Craigslist The original peer-to-peer site is the go-to outpost for everything from apartments to bikes to jobs to, well, almost anything you can image.

Park at My House The name says it all: you can rent out your driveway for visitors or, if you’re traveling, find someone willing to save you an affordable space for your ride.

Pandora Another trendsetter: Pandora radio streams music, with a few commercial interruptions, based on your pre-programmed tastes. There’s no need to buy an album and you get to hear new music you may like. A perfect collaboration.

Rent The Runway This self-explanatory, members-only site is the go-to for ladies looking for designer dresses, bags or shoes on a short budget.

Relay Rides One of the up-and-coming car sharing sites, RelayRides, available nationwide, lets you rent your neighbors’ cars or rent your own to those in need.

Spotify The music streaming site supported by major record labels is changing the way people listen to music, one play at a time.

Swap.com This virtual spin on the traditional swap meet enables buyers and sellers to negotiate the perfect trade.

Task Rabbit Have a dirty job you don’t want to do? Negotiate with TaskRabbit’s arsenal of helpers, most of which are in major U.S. cities, including Austin, Boston and Portland, to get it done fast, reliably and within almost anyone’s budget.

ThredUp Up to 350,000 families the world over have used ThredUp, a children’s clothing swap, to save much-needed dollars when trying to keep rapidly growing tots well-dressed for a steal.

ZipCar A true original in the carsharing community, ZipCar lets you rent cars for a few hours or a few days, and can be found in almost all major American cities.