💾 Archived View for gmi.noulin.net › mobileNews › 4642.gmi captured on 2023-06-14 at 15:46:04. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2023-01-29)
-=-=-=-=-=-=-
2013-03-12 10:33:12
On the internet, everything is for hire
Mar 9th 2013 |From the print edition
LAST night 40,000 people rented accommodation from a service that offers
250,000 rooms in 30,000 cities in 192 countries. They chose their rooms and
paid for everything online. But their beds were provided by private
individuals, rather than a hotel chain. Hosts and guests were matched up by
Airbnb, a firm based in San Francisco. Since its launch in 2008 more than 4m
people have used it 2.5m of them in 2012 alone. It is the most prominent
example of a huge new sharing economy , in which people rent beds, cars, boats
and other assets directly from each other, co-ordinated via the internet.
You might think this is no different from running a bed-and-breakfast, owning a
timeshare or participating in a car pool. But technology has reduced
transaction costs, making sharing assets cheaper and easier than ever and
therefore possible on a much larger scale. The big change is the availability
of more data about people and things, which allows physical assets to be
disaggregated and consumed as services. Before the internet, renting a
surfboard, a power tool or a parking space from someone else was feasible, but
was usually more trouble than it was worth. Now websites such as Airbnb,
RelayRides and SnapGoods match up owners and renters; smartphones with GPS let
people see where the nearest rentable car is parked; social networks provide a
way to check up on people and build trust; and online payment systems handle
the billing.
What s mine is yours, for a fee
Just as peer-to-peer businesses like eBay allow anyone to become a retailer,
sharing sites let individuals act as an ad hoc taxi service, car-hire firm or
boutique hotel as and when it suits them. Just go online or download an app.
The model works for items that are expensive to buy and are widely owned by
people who do not make full use of them. Bedrooms and cars are the most obvious
examples, but you can also rent camping spaces in Sweden, fields in Australia
and washing machines in France. As proponents of the sharing economy like to
put it, access trumps ownership.
Rachel Botsman, the author of a book on the subject, says the consumer
peer-to-peer rental market alone is worth $26 billion. Broader definitions of
the sharing economy include peer-to-peer lending (though cash is hardly a spare
fixed asset) or putting a solar panel on your roof and selling power back to
the grid (though that looks a bit like becoming a utility). And it is not just
individuals: the web makes it easier for companies to rent out spare offices
and idle machines, too. But the core of the sharing economy is people renting
things from each other.
Such collaborative consumption is a good thing for several reasons. Owners
make money from underused assets. Airbnb says hosts in San Francisco who rent
out their homes do so for an average of 58 nights a year, making $9,300. Car
owners who rent their vehicles to others using RelayRides make an average of
$250 a month; some make more than $1,000. Renters, meanwhile, pay less than
they would if they bought the item themselves, or turned to a traditional
provider such as a hotel or car-hire firm. (It is not surprising that many
sharing firms got going during the financial crisis.) And there are
environmental benefits, too: renting a car when you need it, rather than owning
one, means fewer cars are required and fewer resources must be devoted to
making them.
For sociable souls, meeting new people by staying in their homes is part of the
charm. Curmudgeons who imagine that every renter is Norman Bates can still stay
at conventional hotels. For others, the web fosters trust. As well as the
background checks carried out by platform owners, online reviews and ratings
are usually posted by both parties to each transaction, which makes it easy to
spot lousy drivers, bathrobe-pilferers and surfboard-wreckers. By using
Facebook and other social networks, participants can check each other out and
identify friends (or friends of friends) in common. An Airbnb user had her
apartment trashed in 2011. But the remarkable thing is how well the system
usually works.
Peering into the future
The sharing economy is a little like online shopping, which started in America
15 years ago. At first, people were worried about security. But having made a
successful purchase from, say, Amazon, they felt safe buying elsewhere.
Similarly, using Airbnb or a car-hire service for the first time encourages
people to try other offerings. Next, consider eBay. Having started out as a
peer-to-peer marketplace, it is now dominated by professional power sellers
(many of whom started out as ordinary eBay users). The same may happen with the
sharing economy, which also provides new opportunities for enterprise. Some
people have bought cars solely to rent them out, for example.
Incumbents are getting involved too. Avis, a car-hire firm, has a share in a
sharing rival. So do GM and Daimler, two carmakers. In future, companies may
develop hybrid models, listing excess capacity (whether vehicles, equipment or
office space) on peer-to-peer rental sites. In the past, new ways of doing
things online have not displaced the old ways entirely. But they have often
changed them. Just as internet shopping forced Walmart and Tesco to adapt, so
online sharing will shake up transport, tourism, equipment-hire and more.
The main worry is regulatory uncertainty (see Technology Quarterly article).
Will room-renters be subject to hotel taxes, for example? In Amsterdam
officials are using Airbnb listings to track down unlicensed hotels. In some
American cities, peer-to-peer taxi services have been banned after lobbying by
traditional taxi firms. The danger is that although some rules need to be
updated to protect consumers from harm, incumbents will try to destroy
competition. People who rent out rooms should pay tax, of course, but they
should not be regulated like a Ritz-Carlton hotel. The lighter rules that
typically govern bed-and-breakfasts are more than adequate.
The sharing economy is the latest example of the internet s value to consumers
(see Free exchange). This emerging model is now big and disruptive enough for
regulators and companies to have woken up to it. That is a sign of its immense
potential. It is time to start caring about sharing.