The Sharing Economy: A Shift Away From Ownership?
2:16 am
Wed November 13, 2013

What's Mine Is Yours (For A Price) In The Sharing Economy

Originally published on Wed November 13, 2013 2:32 pm

This week on-air and online, the tech team is exploring the sharing economy. You'll find the stories on this blog and aggregated at this link, and we would love to hear your questions about the topic. Just email, leave a comment or tweet.

Not long ago if you wanted to rent a room for the weekend your choices ran from the Four Seasons to Motel 6. Renting a car meant Hertz or Avis and applying for a loan meant going to a bank. But all this is changing.

Increasingly, individuals are reaching out to each other through the Internet. Thousands of Americans have started renting out their underused personal assets online to earn extra cash. They rent their apartments while they are away for the weekend, lend their cars for cash and even sell their spare time.

The sharing, or peer-to-peer, economy is exploding. And all of this is possible in part because of technology, but also because many Americans are coming to terms with scarcity in their lives.

Room To Let

Sharing is not exactly new. Even turning to the Internet to unload unwanted stuff in the midst of a personal economic crisis is a pretty old idea. After all, eBay has been around for a while. And the Craigslist auction of unwanted junk is a staple of modern life.

Still, during the financial crisis something changed.

"When the crisis hit there were people in desperate need of alternative solutions," says Nathan Blecharczyk, a co-founder of Airbnb. "We were one of those solutions."

For the uninitiated, Airbnb allows anyone with a house or an apartment to compete head-to-head against the likes of Hilton in the tourist trade. The website allows you to rent your place out online when you are out of town. You can even rent out a spare room.

In 2009, as the economy collapsed and the company was getting off the ground, this became a godsend for some. On his phone, Blecharczyk has a copy of one of the first customer letters the company received and one of his favorites. It reads:

"Hi Airbnb, I'm not exaggerating when I say you literally saved us. My husband and I just married this past May, after having lost both of our jobs and our investments in the stock market crash last year. We slowly watched our savings dwindle to the point where we didn't have enough to pay our own rent. You gave us the ability to keep our home, travel together and have the peace of mind knowing that we were going to be able to make it through this challenging time in our life."

That couple lived in a pretty hip New York neighborhood. They posted their apartment on Airbnb and were flooded with offers. So they headed out of town on the cheap.

Hardship Breeds Innovation

Renting out a home, your home, for the weekend on the Internet to complete strangers is kind of a radical idea. Sure, technology makes it much easier, but it's a big cultural shift for someone raised in a consumer-ownership society.

The idea for Airbnb, now a multibillion-dollar business, was spawned while the company's founders struggled to pay their own rent.

Lisa Gansky, a serial entrepreneur, investor and author of The Mesh, a book about the sharing economy, says the financial crisis helped make this cultural shift possible. She calls it our culture's "blue-dye moment."

"The idea is you inject blue dye into a system and you can see the capillaries," Gansky says. She says the stress of the Great Recession allowed millions of Americans to see the waste and the excess in their own lives more clearly. And this financial stress pushed many to try to use assets that usually just sat fallow.

"We're now able to see more than we could see before," she says. "We are able to use technology to make it clear that someone's car is available or a room in a home is accessible; that there is an available desk in an office someplace."

Ganksy says mobile technology like phones with GPS and maps built in made sharing all sorts of things simple.

"In the same way when a taxi illuminates when they are on and off duty, we have this ability to illuminate waste [and] what is sitting around unused," she says. "That pent up waste with new eyes becomes value."

Michael Beard and his wife started renting out rooms in their house near Washington, D.C., during President Obama's first inauguration. Shortly after that Beard lost his job as an arts administrator.

The couple has a big old house and a blended family. Together they raised 10 kids, and now in their mid-60s, they have a lot of spare room. Renting out three of their rooms, the Airbnb income pays their mortgage.

But opening up their home this way was initially a decision driven by necessity.

"There are a lot of barriers that people have to break through to do something like this," Beard says. "I have rented out homes that I have owned before, but this was the first time we did this short-term rental where you invited someone from the Internet. That is the big scary thing for most folks."

But Airbnb screens guests and hosts, and Beard says his experiences have been amazing.

"In a sense it's retro. It's really like going back to the way things used to be done, where you got to know each other and you looked after your neighbors," he says. "Only now it's beginning to happen on a global scale because of the Internet."

They still exchange baby pictures with a couple in Brazil and made breakfast in bed for honeymooners. Now, he and his wife prefer traveling this way. And they've begun renting one of their cars when they aren't using it, through a service called RelayRides.

Linking People With People

The sharing business model is proliferating at a rapid pace. Lending Club lets consumer lend directly to each other. It has facilitated more than $2 billion in loans so far, and is doubling in size every 12 months.

Last Friday night, close to 150,000 people stayed in homes of strangers using Airbnb, and more than 1.5 million people have hired strangers to do odd jobs online using TaskRabbit.

Last weekend a handful of chefs in New York, San Francisco and Washington, D.C., invited strangers into their own homes for dinner. Noah Karesh helped make this possible by founding Feastly, a marketplace that allows any chef to market and serve a meal to any hungry eater.

Karesh hopes his site and app, which are still being developed, will one day create a new category of dining. He got the idea on a trip to Guatemala after a long fruitless search for authentic local food. In a last ditch effort, he asked a nearby avocado seller where to find some Guatemalan food. "Yeah, my mom's house," he said.

"So we follow him back to his house, he swings open the door and there is his mom, Rosa, making the most amazing Guatemalan food," Karesh says. "As those smells hit my nose, I knew we'd found something magical."

Sitting there eating, Karesh asked himself why this authentic food was so hard to find? Why was it so hard for Rosa to showcase what she loved to do, and maybe make some extra income doing it?

Building a solution to this problem became Feastly, he says.

Like all these peer-to-peer businesses, Feastly screens chefs and customers and facilitates payments. But as peer-to-peer businesses roll into sector after sector of the old school economy, regulators and entrenched industries are rebelling: from taxi cab commissioners to hotel lobbyists.

Sharing advocates like Gansky argue that as the Earth's population keeps growing, these kinds of businesses offer a solution. She says governments will need to adapt to peer-based businesses and give them room to work.

They are more efficient, Gansky argues, they eliminate waste and provide opportunities for millions to make a little extra money. But best of all, she says, these businesses help connect us to each other.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

STEVE INSKEEP, HOST:

Not so long ago if you wanted to rent a room for the weekend, your choices were places ranging from Four Seasons to Motel 6. And renting a car meant dealerships like Hertz or Avis. Of course you can still use those companies, but you might also just deal with a person like yourself. Thousands of Americans have started renting out their personal assets online to earn extra cash. They rent their apartments while they're away for the weekend, lend their cars for cash, even sell their spare time. It's called the peer-to-peer economy, or the sharing economy. NPR's Steve Henn explains all this is possible in part because of technology, but also because many Americans are coming to terms with scarcity in their lives.

STEVE HENN, BYLINE: Sharing is not new. After all, eBay has been around for a while and the Craigslist auction of unwanted junk is more or less a staple of modern life. Still, during the financial crisis something began to change.

NATHAN BLECHARCZYK: Absolutely. When the crisis hit, there were people who were in desperate need of alternative solutions.

HENN: Nathan Blecharczyk is one of the co-founders of Airbnb.

BLECHARCZYK: We were one of those solutions.

HENN: For the uninitiated, Airbnb allows anyone with a house or an apartment to compete head-to-head against the likes of Hilton in the tourist trade. The website allows you to rent your place out online when you're out of town. You can even rent out a spare room. In 2009, as the economy collapsed and this company was getting off the ground, that became a godsend for some.

MICHAEL BEARD: The Airbnb income pays our mortgage for us.

HENN: Michael Beard and his wife started renting out rooms in their house near Washington during President Obama's first inauguration.

BEARD: A little bit later, I wound up losing my job as an arts administrator for a very high profile performing arts school.

HENN: They have a big old house and a blended family. Together they've raised 10 kids. Initially opening up their home this way was a decision driven by necessity.

BEARD: There's a lot of barriers that people have to break through to do something like this.

HENN: Renting out a home, your home, for the weekend on the Internet to complete strangers is kind of a radical idea. Lisa Gansky is a serial entrepreneur, investor and the author of "Mesh," a book about the sharing economy. She says the financial crisis helped make this kind of cultural shift possible. She calls it our culture's blue-dye moment.

LISA GANSKY: The idea where you inject blue dye into a system and you can suddenly see things in new ways that weren't visible before.

HENN: She says the stress of the Great Recession allowed millions of Americans to see the waste and the excess in their own lives more clearly. Ganksy says mobile technology made sharing all sorts of things much simpler.

GANSKY: In the same way that a taxi illuminates when they are on and off duty, we have this ability to suddenly illuminate what is waste, what is sitting around unused, and that pent up waste is - with new eyes becomes value.

HENN: And businesses that link people together this way are proliferating. Lending Club lets consumers lend directly to each other. It will facilitate $2 billion in consumer loans this year, and last weekend a handful of chefs in New York, San Francisco and Washington, D.C. invited strangers into their own homes for dinner. Noah Karesh helped make this possible by founding...

NOAH KARESH: Feastly, so this marketplace that allows any chef to offer and serve a meal to any hungry eater.

HENN: He got this idea on a trip to Guatemala after spending a long fruitless afternoon searching for authentic local food.

KARESH: And so as we were walking to back where we were staying, like, deflated and hungry, we came across this young avocado seller named Irwin and we asked him, hey, do you know where we can find some Guatemalan food? Just like a last-ditch effort. And he paused for a second and then he looked up at us, massive smile on his face, and was like, yeah, my mom's house.

And, you know, we were really excited about that and so we followed him back to his house, he swings open the door, and there is his mom, Rosa, making the most amazing Guatemalan food. And as we were there interacting with them, you know, the biggest thought that came through my head was, you know, why was this so hard?

Why was it so hard for to find this authentic food and why was it so hard for Rosa to be able to showcase what she loved to do and maybe make some extra income doing it?

HENN: Building a solution to this problem became Feastly. But as peer-to-peer businesses roll into sector after sector of the old school economy, regulators and entrenched industries are rebelling. Sharing advocates like Lisa Gansky argue that as the Earth's population heads towards nine billion, these kinds of businesses offer a solution. She says governments will need to adapt to peer-based businesses and give them room to work.

They are more efficient, she argues. They eliminate waste and provide opportunities for millions of us to make a little extra money. But best of all, says Gansky, these businesses help connect us to each other. Steve Henn, NPR News, Silicon Valley. Transcript provided by NPR, Copyright NPR.

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