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DaVinci Coders
March 5th, 2013 at 12:22 pm

The sharing economy – the way we consume has changed forever

Share everything

At Union Kitchen in Northeast Washington, D.C., the “equipment library” contains some of the more mundane artifacts of the modern “sharing economy”: an oversized whisk, a set of spatulas, ladles, chopping knives, sheet pans and tongs.  It is also know as “collaborative consumption,” and is more often associated with the big-ticket items that have given the concept such bemusing cachet. Suddenly, it seems, people are casually lending and borrowing cars, bikes, even brownstones. But this basic kitchenware, hanging in a 7,300 square-foot warehouse, reveals the reaches to which all this sharing could ultimately expand, as well as the reasons why it will have to.

 

 

Union Kitchen moved into the space in late November of 2012, taking over what had been the commissary for a chain of local kabob houses. Jonas Singer and Cullen Gilchrist had been looking to expand the kitchen operations for a café they own in the city. But this two-story red brick warehouse situated on a cramped manufacturing block was more space than they needed. So they turned the warehouse – complete with a walk-in freezer, two fridges and prep space for two-dozen entrepreneurs – into a shared kitchen and food incubator. For $500 a month, member chefs get a share of their own prep table, access to communal equipment, pantry shelves, and ingredients at wholesale prices.

By early January, the kitchen already had nearly a dozen members, including a cupcake food truck company, a caterer specializing in mole sauces and chocolate cakes, and the city’s lone Kombucha brewer. It would be prohibitively expensive for any of them to open their own commercial kitchens. But – and this is a related problem – there also isn’t affordable space enough in this growing city to do so.

“The reality is that if D.C. swells from a place where there are 500,000 people in 2010 to a place where there are 850,000 in 2020, well what are we doing with those 350,000 extra people who are here?” Singer asks, sitting on a couch in the kitchen’s lounge. “We’re all living in slightly smaller spaces. Obviously the per-capita number of car owners has to go down. The amount of space like this is going to be much tighter. A lot of the sharing economy just has to do with the number of people living per square foot of land. It’s all about physical space.”

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The so-called sharing economy has been described as being about many things: Millennials rejecting car ownership, the environmentally conscious glomming onto the latest eco-trend, broke urbanites who will want all their own stuff again as soon as the economy recovers. Ron J. Williams, the CEO of online gear-lending outlet SnapGoods, admits that sharing pioneers (himself included) enabled too many articles describing all of this as a precious curiosity: People are sharing whoopee-pie makers! On the Internet! With strangers!

As Singer’s kitchen illustrates, collective ownership in all its evolving forms constitutes less a fleeting fad and more an essential piece of how we’ll live in an increasingly dense, urbanized world. This is both a physical and economic reality. “Fundamentally,” Singer says, “if more people are living on the same square foot of land, and that square foot of land is worth more money, what are the consequences and how do we set up our society to deal with that? That’s what we’re trying to wrap our heads around.”

Sharing is, of course, an old idea. “This is just Colonial Williamsburg,” Singer says, invoking eras past and sweeping his arms out to capture the whole building. “That’s all this is.” Although one persistent problem at Union Kitchen is quite modern: the chaotic parking scene outside on the narrow block shared by an auto mechanic, a Chinese noodle shop, a woodworker and a printing press. Sharing has its downsides, too.

We’re used to the notion of sharing libraries, public parks, and train cars. But in many ways, American culture in particular drifted away from sharing as a value when we spread out from city centers and into the suburbs. Molly Turner, the director of public policy for short-term rental lodging website Airbnb, evokes the iconic image of Richard Nixon, in Moscow, introducing Nikita Khrushchev to the modern marvel of the state-of-the-art washing machine, available for private consumption in every American home. Beginning with the era of that washing machine, Turner argues, we forgot how to share.

We came to prize instead personal ownership – of multiple cars, of large homes with private backyards and space inside for appliances that would never fit in a modest city walk-up. Today, this kind of bald consumerism is considered almost tacky. But the reasons underlying that cultural shift reveal why we’re witnessing a true change in paradigm. Much has transformed in the last few years alone: the economy, technology, and the allure of cities themselves.

“What’s really going on here is the urbanization of the world and the reurbanization of American cities,” Turner says. “Either consciously or subconsciously, [people] are realizing that that involves the public realm, the commons, sharing goods and services and infrastructure. And I think that kind of bleeds into your personal life.” In other words, if you’ll share a subway car, why not a kitchen?

This move back into city centers also coincided with the Great Recession. Those big houses and multiple cars, it turns out, were beyond many of our means. And it’s no coincidence, Turner says, that Airbnb – a company founded around shared housing – was born in 2008, just as the U.S. was entering a recession built on a housing crisis. For many Airbnb members, the spare rooms they were able to rent through the service helped them keep their homes. City living, for all its allure, is expensive, but the sharing economy makes it possible for more people, whether they’re sharing a car because they can’t afford to own one, or sharing a bike because they’ve got nowhere to store it.

We’re also witnessing a paradigm shift toward sharing in the offline world because of the online technology that enables it. None of that technology, including Internet payment models, network search tools and identity verification systems that make trust at least somewhat possible among strangers, is going away. The Internet has essentially allowed us to expand the circle of people with whom we share. But even more fundamentally, the open-source culture of the web has taught us how to share, and made sharing a default of social interaction.

“There’s some pretty good empirical evidence that people in a sense get in a habit of sharing,” says Lee Rainie, the director of the Pew Research Center’s Internet & American Life Project. “It’s a frictionless process online and in the digital form. Why wouldn’t that be the gateway drug to being a sharer in other contexts?”

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Expensive, fixed assets like cars and housing have actually turned out to be the low-hanging fruit of the sharing economy. They’re costly to own individually, making the incentive to share them that much higher. And most cars sit unused for the majority of their lives, meaning that owners pay hefty costs to drive them only a fraction of the time.

Getaround, a San Francisco-based car-sharing company, pushed the idea pioneered by companies like ZipCar even further into the realm of what would once have been considered impossible. The company, launched in mid-2011, enables individuals to share their private vehicles. Skeptics insisted that people would never share their own cars (by which they really meant “I would never share mine.”) It turned out plenty of other people were willing to take the risk, including the owner of a Tesla Roadster. To this day – Getaround has signed up 10,000 vehicles in its first year and a half – the sharing service remains the only way you can rent the $150,000 sportscar in San Francisco. “That helped a lot of people with Priuses and MINI Coopers share theirs,” company founder Jessica Scorpio says.

Airbnb has similarly destigmatized strangers in private homes. Today, half of the company’s hosts are renting out a spare room, living alongside a stranger. The other half turn their empty apartments over to unknown tenants. One of the older companies in the sharing space – at all of four years old – Airbnb has spawned its own share of mimics. “There’s such a proliferation of ‘the Airbnb of XYZ,” Turner says, “and I think some of the models probably aren’t going anywhere, like the ‘Airbnb of toilets,’ or the ‘Airbnb of dogs.’” But she predicts that those services meeting the needs of both sides of a market – the givers and receivers in sharing – will succeed. Airbnb, for instance, has met the need of homeowners looking to make extra money on the side. But it will also increasingly serve a freelance workforce as prone to temporarily changing cities as jobs.

Some physical goods – maybe not dogs or toilets – are exchanging hands in the shared economy, too. There actually is someone in Manhattan offering whoopee-pie makers on SnapGoods (includes the recipe book!). But the shared economy of stuff works best with assets that are expensive to own and infrequently used, like camera and music accessories, or high-end home tools. SnapGoods sells itself with the slogan “own less, do more,” a nod to the idea that our culture increasingly values the accumulation of experiences over assets (if you don’t own your own camera, maybe you can afford to take a trip as an amateur photographer to Yosemite).

“People don’t want the cognitive load associated with owning,” reasons Neal Gorenflo, the publisher of Shareable magazine. “If you’re a creative person, you don’t want to cut the lawn. Or wash your car. It’s like, ‘Oh my god, are you kidding me? I could be creating the next piece of software.’”

All of these models – alongside bikesharing, coworking spaces, shared nannies – are really at the end of the day about efficiency, even if the shared economy simultaneously speaks to our more altruistic motivations to do right by each other and the environment. Ownership, by definition, implies idleness. Whatever you own that you’re not using right this second may be going to waste. Or worse, you’re wasting scarce money on it.

Viewed through the lens of efficiency – to revisit the problem of more people per square foot of land – the sharing economy has the potential to address some of the biggest problems of cities. It’s not just a survival strategy for low-wage workers living in high-cost-of-living metropolises. It’s a strategy at the scale of urban planning. “It changes everything,” says Janelle Orsi, the executive director of the Sustainable Economies Law Center and a sharing economy lawyer.

Bike- and car-sharing change municipal policies for improving transportation flow. GetAround will change what it takes to reduce carbon emissions (studies suggest that one shared car can take 13 or 14 others off the road). Airbnb will help provide housing flexibility in cities that now have a severe mismatch in supply (of outdated, oversized housing) and demand (for new micro-apartments and accessory dwelling units). The sharing economy, Orsi believes, could even address problems of urban crime, through the stability of social networks it will spawn and the greater number of people it will be able to provide for. “I really think,” Orsi says, “it’s going to just completely change how cities visualize their space and visualize their problems and how to solve them.”

Trouble is, the existing American city wasn’t built for the sharing economy, even if sharing is an old idea. Traditionally, our cities have been designed to separate out the functions of our lives, with residential and commercial zones, consumers and producers clearly demarcated. The sharing economy upends all of that.

“Cities are going to have to reconsider and rethink how they view public space,” says Josh Moskowitz, the business development manager for car-sharing service Car2Go. He’s thinking of curbside space in particular, but all of this indicates a massive revision, Orsi adds, of traditional city planning frameworks.

The reaction of most cities so far as been to warily size up Airbnb hosts as vacation rental owners, or rideshare drivers as taxi cabs. Their real identity is something still legally undefined, requiring new policy frameworks that recognize, for instance, the difference between someone recouping the cost of owning a car by giving rides in it, and someone making a hefty profit that way.

Bureaucracies have to figure this out because the benefits will be so immense, at the citizen and city scales. The very thing that makes cities so powerful – their ability to agglomerate – will only be enhanced by the sharing economy. Academics tell us that great things grow out of dense human interaction. Picture what’s possible when those same people are further connected to each other through networks modeled in the digital age and built on the real-world sharing of cars, spare bedrooms and whisks.

Photo credit: Planet Soho

Via The Atlantic Cities

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