Thought about a house swap for your summer holiday? Have you used a car-sharing scheme? Do you barter old DVDs and books for new ones? When you buy things, do you use social networks to get a discount?
If not, you could be missing a trick. Collaborative consumption is giving us all the chance to become “micropreneurs”, says Rachel Botsman, one of the prophets of this new economy. Technology is increasingly enabling us to make money from our time, skills and possessions, with the agreeable side effect of strengthening our communities.
Until now, the only people encouraging us to share along these lines were hippies — so it’s a blessed relief to hear it from somebody such as Botsman. A graduate of Oxford and Harvard, she has worked as a management consultant and for Bill Clinton, the former US president. Her new book, What’s Mine Is Yours — co-written with Roo Rogers, an entrepreneur — describes how collaborative consumption is transforming the way we live.
Sceptical? Well, Botsman explains how the way we do business with one another is changing incredibly fast. “Imagine I was talking to you in 1995 and describing eBay,” she says. “If I told you that one day you would send money to people you don’t know, who aren’t even trading under their own names, you wouldn’t have believed it. But today $2,000-worth of goods are traded every second, and the satisfaction rates are high.”
The day before I met Botsman, a Londoner who now lives in Australia, she sent me a message through Twitter promising ideas for me to make money as a micropreneur. I wondered if she was going to suggest I join Ecomodo, a site that enables people to rent their possessions to one another. Or, like 2.5m others in Britain, sign up to Groupon, which invites businesses to offer discounts and brings individuals together to take advantage of them.
Maybe she would urge me to open some kind of shop, perhaps on Folksy, where people sell the art they make. Or sign up to Facebook Deals, which has just arrived in Britain and, like Groupon, will allow firms in a particular area to make offers to people nearby.
In the event, her money-spinning advice was disappointingly sensible. “Have a look at what your best assets are,” she said. But then, that’s what she did herself: she let her house for five days over Christmas and made £1,250.
Her husband, it should be acknowledged, was not keen. “He said we would have to have a locked room for valuables, we would need a cleaner to come in afterwards and we had to have new sheets,” she says. “I told him we don’t have new sheets or towels when we stay in hotels.”
Eventually he was converted — and he is now an evangelist himself. “He thought it was fantastic,” she says. “Now he is driving me nuts, spending hours researching other properties where we can stay.”
For her recent American book tour, covering 11 cities, Botsman found accommodation entirely through a site, Airbnb, that makes an “innkeeper” of anybody with a spare room, castle or igloo (yes, really). It has more than 200,000 members worldwide and is growing at a rate of 700% a year. In Britain the average member makes £2,500 a year from letting their property.
A report published last week found that 1.6m people in Britain are planning to do house swaps over the holidays — twice as many as last year. Through sites such as Airbnb — and Crashpadder and Roomarama — it’s not necessary to do a direct swap: you can stay with one member and let your home to another.
Botsman first became aware of collaborative consumption when “at dinner parties, instead of boasting about their new Prius, friends boasted how they had given up their cars altogether by becoming Zipsters” — members of the car-sharing service Zipcar. Others would talk about bike-sharing schemes such as the one in London. Research showed Botsman that bike-sharing is the fastest-growing form of transport in the world.
It is happening now, she reckons, because of surging interest in community, whether through Facebook, in knitting circles or in films such as The Economics of Happiness, which previews next week. We’re also driven by recessionary thrift and a sense that buying more and more stuff can only be bad for the planet.
Over its entire lifetime, the average power drill is used for just 12 minutes. Letting neighbours rent yours might bring in a few quid at no inconvenience. And there’s much more: “Ninety per cent of what we own is used less than once a month,” Botsman says. She’s just waiting for B&Q to start having tools for rent. Mothercare could do it too, Botsman says, because babies and toddlers soon grow out of the things you buy for them.
The model for this already exists. Not long ago, people went to hire a narrow range of videos and DVDs on the high street. Nowadays, millions rent by post from companies, such as Lovefilm, that offer a much wider range. With millions of users rating films, the system becomes ever better at recommending the films you might enjoy. And you can upload a wishlist.
“Just imagine if conventional retailers were able to see a list of things customers wanted,” Botsman says. So technology has not only driven down costs but also made the service much more useful.
What really excites Botsman is that, as well as renting from businesses, people are increasingly dealing directly with one another. “Most cars are not used for 23 hours a day. Ownership is increasingly perceived as a burden — you pay a lot to keep a car. If you rent out your car through something like WhipCar, you can reduce that cost. And when you feel like it, you can hire someone else’s. You wake up and ask yourself, ‘Do I want to drive a Golf today, or a BMW?’
“This was not possible in the past because finding the people to trade with was timeconsuming. The internet collapses transaction costs. There are no middlemen.”
Peer-to-peer rental, through sites such as Ecomodo, is estimated to be worth £16 billion. But for the founders of these sites, developing a critical mass of users or inventory is a hard trick to pull off. “If users log in and the things they want aren’t there, they won’t go back.” Even eBay once had only a couple of members, offering items most people didn’t want.
The key to such sites is the trust between members. Indeed, Botsman believes our online reputation will soon be aggregated across everything we do, eventually amounting to a virtual currency. “In the past, our reputations were measured by our credit history. In the future, I believe our online reputation will become a kind of social currency.”
1150 words. First published 6 February 2011. © Times Newspapers Ltd.