What lies ahead for the Ubers, Lyfts, and Airbnbs now shaking up the competitive landscape? According to Rachel Botsman, the sharing economy is here to stay — and it promises to deliver even more profound changes in the years ahead.
A decade ago, the idea of renting someone’s spare room or using a smartphone to get rides from an unlicensed car-sharing service was barely on the collective radar. Today, Airbnb and Uber are common around the globe. Rachel Botsman, the co-author of business bestseller What’s Mine is Yours: How Collaborative Consumption Is Changing the Way We Live, says that these types of businesses — ones that involve organized sharing, trading, and renting — are only the start of a much larger and far-reaching economic upheaval.
ACCESS: Can you briefly describe the core ideas of collaborative consumption?
Rachel Botsman: It’s about taking an underused asset — a skill, a car, a home — and putting it into a collaborative marketplace to enable greater efficiency, empowerment, and access. So people with cars or homes that they don’t use create marketplaces where those assets can be shared, rented, or sold in new ways.
ACCESS: Are there industries that seem particularly ripe for disruption by it?
R.B.: Healthcare, insurance, and financial services are three examples. All have complicated and often inefficient systems. For example, research shows that the average piece of hospital equipment is greatly underused over its lifetime. That lack of productivity costs $14 billion a year. So we are seeing the emergence of platforms such as Cohealo that provide hospitals with shared access to equipment.
ACCESS: New York City and Boston have made moves to regulate room- and car-sharing services. Does that threaten the growth of collaborative consumption?
R.B.: I think regulation has come on the radar because companies such as Airbnb and Lyft have gotten really big, really fast. My sense is that they welcome regulation because it legitimizes what they’re doing. It also puts best practices in place to make the marketplace better.
ACCESS: Where do you see investment growth in the collaborative economy?
R.B.: Growth won’t only be in companies that make assets shareable. It will also be in the companies that provide mechanisms which make it easier to exchange services. Stripe, which offers a balance payment system, is one example. Trulioo, an identity verification system, is another.
ACCESS: Are there sectors where collaborative models don’t work?
R.B.: Collaborative markets don’t work well in sectors when there isn’t enough incentive around an asset to change the way it is used. Another area that’s challenging is with highly regulated industries such as utilities. But those are also where you could find the most opportunity. For example, if you could directly match solar and wind energy providers with customers, you would have a very interesting marketplace.
ACCESS: How will the collaborative economy change in the next five or 10 years?
R.B.: We won’t even think of it as a separate thing. It will just be part of our everyday lives. We’ll also see that for a lot of big, major, traditional brands this will just become the way of thinking about creating value, deploying assets, and interacting with people. There will be many other billion-dollar companies in this space that will help people realize that this idea will disrupt the way a lot of industries operate.
ACCESS: Does the acceptance of sharing products and services have a generational element?
R.B.: Collaborative consumption is more intuitive with digital natives because they grew up around sharing and have a very different concept around ownership. But this isn’t a generational thing. When you look at collaborative marketplaces, the providers and customers are often in the over-45 market rather than the under-25 market. Once they are actually engaged, members of older generations tend to be the more active users. I often hear that once people trust Airbnb works, then they try Lyft, so there is a transference of trust across verticals.