An important book that came out that was written by Rachel Botsman and Roo Rogers laid out
the concept of collaborative consumption in a pretty authoritative way.
They book was called "What's Mine Is Yours."
It put the whole vision of collaborative consumption into perspective.
The authors assert in this book that the trends that gave rise to collaborative consumption
were basically fourfold.
The first was a recognition of the importance of community, community being something that
people began to value, started to recognize as something that didn't come for free, and
that it was something that people wanted to achieve.
The second trend was the availability of peer-to-peer social networks that could update and communicate
in realtime, Facebook being an example of one that enables the sharing of information
and pictures and links, but peer-to-peer social networking that exchanges information in realtime
aren't just limited to Facebook that can be used to support collaborative consumption.
The third trend is growing environmental concerns and the recognition that there are other ways
of consuming and managing inventory that have less impact on the environment.
The fourth trend was the global recession that happened in the 2008 time period into
the early 2010s.
This caused people to think about ways of living their life that would require less
money and possibly involve more sharing.
So, those are the basic four trends that were laid out in the book as far as the things
that gave rise to collaborative consumption, the importance of community, peer-to-peer
realtime social networks, environmental concerns and the global recession.
In addition to these trends, there are three categories that businesses that do collaborative
consumption can be put into.
The first one is redistribution markets.
This is the idea of not just reduce, reuse, recycle, but also adding onto those three
is the idea of repair and redistribution.
Redistribution markets are those kinds of collaborative consumption markets that involve
sending used and unneeded items to those that want them.
That's one way in which collaborative consumption happens, redistribution.
Another way that collaborative consumption happens is through collaborative lifestyles.
This focuses more on the community aspect of the trends that were identified in "What's
Mine Is Yours."
Collaborative lifestyles include things like coworking, people who only need an office
space for a short amount of time but would like to be around people, time banking in
which people exchange services not for money but in exchange for I'll spend an hour doing
what I'm good at if you'll spend an hour doing what you're good at in exchange for each other.
Couch surfing would be an example of a collaborative lifestyle.
This is an exchange of a place to live, but it also is a community living kind of arrangement
because there is someone sleeping on your couch.
Another example of this would be land share were you have a backyard that you would like
to offer to someone else to farm.
This is as much about utilizing the backyard as it is about meeting new people and living
in community together.
The last category for collaborative consumption would be product service systems.
This is for example fashion collaborative consumption where we trade fashion items for
short periods of time, we trade tools on a sharing basis, Netflix, examples of product
service systems that use collaborative consumption.
Now, as you might imagine and as you can tell, as you've seen probably just in popular media
Silicon Valley and venture capitalists are all over this because for the most part they
are low investment business opportunities in which marketplaces are central and the
ability to connect consumers with producers to provide services in the middle and to facilitate
those monetary transactions is a potentially lucrative market.
A very, very popular idea in Silicon Valley.
Because of that we have people like Kevin Kelly who are extolling the idea that access
is better than ownership.
This is the idea that ownership actually comes with hidden costs of maintenance, storage
and depreciation, excess capacity, and actually it might be better if you just had access
to these services and these items and these tools and these entertainment venues rather
than having to own them yourself.
Of course, there are TED Talks that gasp breathlessly about how the future of business is sharing
and all the different ways in which this is going to revolutionize everything we're doing.
There are MIT Entrepreneurship experts that are saying things like the following.
One of the best ways to return to a sustainable way of life is to maximize asset use through
collaborative consumption marketplaces.
By providing economic incentives to maximize efficiency, binding large communities to shared
causes, and decreasing total consumption, collaborative consumption will become a cornerstone,
a keystone, of a sustainable American society.
In some ways these people are absolutely right.
There are vast amounts of latent value in the things that we own and being able to use
them more efficiently can be the cornerstone of new business models and the sustainable
future.
However, it's important not to get too excited out of perspective of what's happening here
because let's not forget that people have been sharing things for a long time.
You can compare a laundromat to Zipcar.
Laundromats have been around for quite a while, and a laundromat is a way of sharing a washer
and dryer in the way that Zipcar is a way of sharing cars.
Rather than owning your own washer and dryer you go to a central location and use a centrally-managed
inventory of washers and dryers.
This is the sharing economy without calling it the sharing economy.
Libraries.
Libraries are just like Netflix but for books.
Libraries have been around for thousands of years and are an example of a sharing or a
collaborative consumption environment, economy if you will, that have been around for a long
time that we haven't been calling that.
Bed and Breakfasts have been around for 10s of years, probably longer than that if you
consider them boarding houses, and these are places where people own houses that have excess
capacity, they buy houses that have excess capacity so that they can act as a landlord,
as a host, as hospitality to travelers who are coming through.
This is just like Airbnb perhaps without the scale and without the reputation management
that was associated.
But, it was a sharing economy and it's been around for quite a while.
So, that gets to the point of what is different here.
What is different about collaborative consumption in the way that we're talking about it today?
Well, one thing that is different is scale.
The number of customers, the number of goods, the number of locations, and the speed of
information transmission is all higher than it has ever been before.
It's completely feasible right now to have a directory, a database that lists every single
person in the world.
It might be difficult to make that happen socially, but from a technical standpoint
scaling a database to 7 billion entries is not difficult.
That also means that the number of places that Airbnb or Zipcar can handle is much higher
than it was when the directories had to be paper or when they had to be updated every
six months rather than every minute.
Another difference as I mentioned a moment ago is reputation management.
One of the things that these services provide that is quite valuable is a way to know whether
or not the person that you're connecting with can be trusted.
If you would like to offer a room in your house to someone as rent you would like to
have some assurance that they are a responsible, safe, reliable renter before you open up your
home to that person.
Before you hire someone like in the service Lyft to drive you around in their car you
might like to know a little bit about that person and what they do and what other people
have said about them.
Before you let someone farm your backyard, before you let them come through your home
and take over your backyard for gardening you might like to know a little bit about
them.
So, a lot of these services offer reputation management through reviews and stars and various
reliability indicators that have not been available before.
So, that is different about the current sharing economy than what we saw in the libraries,
in the laundromats in the past.
Well, although there is a lot of potential with collaborative economies and many people
are very excited about the way in which they are supporting new ways of interacting with
each other and possibly a sustainable future, not everyone agrees that collaborative consumption
is a wonderful future.
Recently there have been a lot of critiques that have pointed out that these collaborative
consumption services are monetizing things that used to be supported through public programs,
through collective political action and through collective governance.
A lot of these services are making their money off of things that used to be public goods,
that used to be public infrastructure and in the process of doing that they are also
bypassing many of the regulations that have been designed over time in order to support
the kind of community goals that we have and to support all the interests of various stakeholders
that are involved in these sharing economies.
What the heck am I talking about?
Let me give you a couple of grounded examples.
We talked earlier about the example of Car2Go.
Car2Go is like Zipcar but there is not a particular parking space where Car2Go cars stay.
When you are done with Car2Go cars you leave them wherever they happen to be if they are
in a legal parking spot, and the tracking technology in it will let the Car2Go company
know where they are and let people who would like to rent the cars next know where they
are.
Well, that's fine, but what Car2Go is doing then is they're using public parking spaces
that used to be available to everyone as a place to store their inventory or cars.
Rather than having to buy a parking garage or a lot where they store all the cars and
they're not being used, this public good which used to be the free parking spot has now been
co-opted by Car2Go who is making money off it while they are storing their cars there.
Netflix is another example.
There the post office is the largest commercial mail client, and by virtue of being such a
large commercial mail client Netflix was able to negotiate aggressive rates for their ubiquitous
red mailers.
Their DVD delivery business couldn't have existed if the post office which was started
as a public entity and as a public good and in many ways is still regulated by public
and collective governance, Netflix benefits from that tremendously.
They don't have their own delivery mechanism for getting their physical DVDs to you.
A final example relates to the regulations that are being bypassed by these services.
There are laws and regulations that prevent hotels from doing things that we collectively
think are bad.
For example, hotels cannot discriminate against different types of customers.
There are regulations in place that prevent that from happening.
Well, peer-to-peer hospitality services like Airbnb don't have any regulations that prevent
someone from not allowing a person whom they would like to discriminate against from staying
in their home.
If you have a room in our home you can discriminate against the people that stay there any way
that you like, and the regulations aren't in place to prevent that and they would be
difficult to enforce in any regard.
So, there are some things that we have built in for safety and collective moral imperatives
that are bypassed by some of these services.
Another big critique is that of the labor commissions that are associated in collaborative
consumption.
There is a lot of wage compression and decline in working conditions for the people that
decide that they are going to offer their services through these collaborative consumption
environments.
Many of the people who drive for Uber and Lyft for example are otherwise unemployed,
or they don't have or can't find jobs that have a living wage.
There have been various sort of gaffes from the executives in these companies where they
suggest that elementary school teachers can pick up a job at night driving for Uber or
Lyft so that they can pull in a few extra dollars so that they can have a living wage.
This is a way of compressing wages rather than trying to find a way that our teachers
can be paid a living wage.
Some of these drivers are vulnerable, sometimes they are very desperate, and the companies
that run these services, they don't pay benefits that a traditional corporation would pay.
They don't provide disability insurance, they generally don't contribute to health insurance,
and across the board venture capitalists love low-cost labor and this is a way of getting
low-cost labor and bypassing regulations that have been put in place to protect workers.
These arrangements tend to drive down the standard of living of many workers along the
way.
Uber and Lyft are causing seismic shifts in the taxi industry.
They put much of the risk that used to be borne by corporate customers onto the workers.
While the workers are buying and maintaining the means of production, for example they're
buying and maintaining the cars for Lyft and Uber, they don't have the same access to resources
to write off these assets in depreciation on their taxes the way companies do because
that requires expensive lawyers and accountants in order to help you do those sorts of things
that most of these drivers don't have access to.
So, it's important to realize that with all the potential of collaborative consumptive
there are also some bad things that come with it as well that need to be carefully monitored
if we want to have a just and sustainable future.
In summary, collaborative consumption is the ability for individuals and businesses to
monetize excess capacity in the goods that they own or control and the time that they
have.
You have excess capacity, you can make money off of it.
It occurs in a wide swap of demands.
All kinds of industries are doing this recognizing that there is excess capacity and trying to
monetize that by sharing and trading and renting out these excess capacities.
It's enabled through modern information technology because that modern information technology
is what enables us to manage the scale, the reputation, and the realtime communication
that is necessary for these things to happen.
It also happens to support payment for those services that require transaction costs.
If the impact of this is to drastically reduce manufacturing and non-renewable consumption
then the impact is going to be great for sustainability, and as long as we can help mitigate the downsides
there is a lot of potential for collaborative consumption to revolutionize the way that
we are doing business possibly portending a more sustainable future.
Thank you very much.