service systems, redistribution markets and collaborative lifestyles. Together these systems are reinventing not just what we consume but how we consume.
Although the examples of Collaborative Consumption range enormously in scale, maturity and purpose, they share similar underlying principles essential to making them work that we explore throughout this book – critical mass, idling capacity, belief in the commons and trust between strangers.
Collaborative Consumption is not a niche trend, and it’s not a reactionary blip to the 2008 global financial crisis. It’s a growing movement with millions of people participating from all corners of the world. Many of these participants may not even realize that they are part of this groundswell. To illustrate the explosive rise of Collaborative Consumption, let’s first look at the growth stats behind a few mainstream examples: Bike sharing is the fastest-growing form of transportation in the world,2 with over 500,000 trips being made in the first six weeks of operation for London’s Barclays Cycle Hire. Zilok, a leader in the peer-to-peer rental market, has grown at a rate of around 25 percent since it was founded in October 2007.3 Two billion dollars worth of goods and services were exchanged through Bartercard, the world’s largest business-to-business bartering network in 2009, up by 20 percent from 2008.4 UK-founded Zopa, the first online peer-to-peer lending marketplace in the world, did more business in its fifth year, at £35.5 million (March 2009 to March 2010), than in the previous four years combined at £34.5 million. By October 2010, Zopa members had lent over £100 million between each other. Freecycle, a worldwide online registry that circulates free items for reuse or recycling, has more than 5.7 million members across more than eighty-five countries. More than twelve thousand items are ‘gifted’ every day through the network.5 U-Exchange, one of the most successful of all swap sites, saw a 70 percent increase in new members in 2008, and the membership of the trading site Swap grew tenfold in 2009 over the previous year. On thredUP, a clothing exchange for children’s clothes, approximately twelve thousand items were exchanged within the first eight days of launching in April 2010. Landshare, a site that connects gardenless would-be growers with unused spare land, has more than 55,000 members across the UK today. CouchSurfing, a global website that connects travellers with locals in more than 235 countries and territories, is currently the most visited ‘hospitality service’ on the Internet.6 In the United States, there are more than 2,500 CSA schemes – where people pay a sum of money at the beginning of the year to a local farmer who will deliver a weekly box of fresh produce throughout the growing season – compared with only 1 in 1985. In the UK, there are more than 100,000 people on the waiting list for an allotment (a plot of land that can be rented by an individual for growing fruits and vegetables) and in some parts of London the wait is up to forty years.7 In the midst of the global financial crisis, when the federal government was bailing out the ‘Big Three’ car companies, car-sharing membership increased by 51.5 percent in the United States.8 By 2015, it is estimated that 4.4 million people in North America and 5.5 million in Europe will belong to services like the one from Zipcar, whose membership alone more than tripled in 2009.9 UK-based WhipCar, the first neighbour-to-neighbour car-sharing service had over 1,000 owners accepting bookings within the first six months of launch. We could go on. Collaborative Consumption is a snowball idea, one with enough heft to keep gathering momentum and enough adhesion to keep growing bigger.
Many of the companies we explore in this book are already profitable or have growing revenue models. The more established companies are making hundreds of millions in revenue (Netflix made $359.6 million and Zipcar $130 million in 2009), while others like SolarCity and Swap are just starting to turn a profit. Specific sectors of Collaborative Consumption are predicted to experience phenomenal growth over the next five years. The peer-to-peer social lending market led by the likes of Zopa and Lending Club is estimated to soar by 66 percent to reach $5 billion by the end of 2013.10 The consumer peer-to-peer rental market for everything from drills to cameras is estimated to be a $26 billion market sector. The swap market just for used children’s clothing (0 to 13 years) is estimated to be between $1 billion and $3 billion in the United States alone.11 Car sharing or per hour car rental is predicted to become a $12.5 billion industry. Even organizations such as CouchSurfing and Freecycle that were set up for a purpose not explicitly about profitability are helping create consumer acceptance and paving the way for similar businesses with a revenue model. CouchSurfing, a nonprofit organization, created the space for the likes of Airbnb and CrashPadder. And it’s not just the companies making money. As The Economist noted, individuals involved in Collaborative Consumption are becoming ‘microentrepreneurs.’12 Some people are making a little money on the side and others are making significant income from peer rental of products and spaces that would otherwise be sitting unused and idle. The average New Yorker participating in Airbnb is making $1,600 per month. And that is just the average. Renters on Zilok are making over $1,000 a year from renting out just one item such as a camera or bike. It is estimated that an owner of a saloon car such as a Camry can make over $6,250 per year through peer-to-peer car rental sites such as RelayRides, Gettaround and Whipcar by renting the car for twenty hours a week. Some owners, such as ‘Dave,’ a twenty-six-year-old designer, are using Whipcar to help pay for general living costs. Others, such as sixty-six-year-old ‘Maureen’, hardly use their car and use the extra rental money to pay for holidays.
People may throw an ‘out of necessity’ brick at Collaborative Consumption, claiming that it will slow down or crumble when the economy fully recovers and prosperity returns. But not only is Collaborative Consumption driven by consumer motivations that extend far deeper than cost savings, the habits started to stick and spread before the financial collapse of 2008. Economic necessity has just made people more open to new ways of accessing what they need and how to go about getting it.
When the great recession hit in 2008, some pundits and economists heralded the end of consumerism, while some suggested that consumers needed to be prodded to shop again. Either way, they assumed that the traditional model of consumerism, the one in which we buy products, use them, throw them away and then buy more, would continue, even if at a hobbled rate. While the ‘spend more, consume more’ way out may be a short-term fix, it is neither sustainable nor healthy.
While the rampant and unregulated financial system led to investors losing millions in Ponzi schemes, hedge funds, insurance companies and even savings banks, everyday people pursuing the supposed American dream felt the worst impact. In all corners of the world, millions lost their homes, their jobs, their buying power and their confidence. But within weeks of the crash, there were signs of a new and increasing consumer awareness, tinged with anger. We have been living in a society that for more than fifty years has encouraged us to live beyond our means, both financial and ecological. As Thomas Friedman wrote in a New York Times op-ed, ‘2008 was when we hit the wall – when Mother Nature and the market both said: “No more.”’ While the world awaits a new big idea to reinvigorate and rebalance our economy, we believe the transformation will start to come from consumers themselves.
The convergence of social networks, a renewed belief in the importance of community, pressing environmental concerns and cost consciousness are moving us away from top-heavy, centralized and controlled forms of consumerism towards one of sharing, aggregation, openness and cooperation.
To build on an idea Charles Leadbeater discussed in his book We Think, in the twentieth century of hyper-consumption we were defined by credit, advertising and what we owned; in the twenty-first century of Collaborative Consumption we will be defined by reputation, by community, and by what we can access and how we share and what we give away.13
The phenomenon of sharing via increasingly ubiquitous cyber peer-to-peer communities such as Linux, Wikipedia, Flickr, Digg and YouTube is by now a familiar story. Collaborative Consumption is rooted in the technologies and behaviours of online social networks. These digital interactions have helped us experience the concept that cooperation does not need to come at the expense of our individualism, opening us up to innate behaviours that make it fun and second nature to share.
