If you've spent any time trend watching lately, you've probably come across a growing trend called Collaborative Consumption. For the uninitiated, Collaborative Consumption is the umbrella term for the resurgence of traditional forms of sharing, lending, bartering, and borrowing enabled by the technology to make these practices scale to an industrial level. The poster child for the movement is AirBnB, a service that lets people earn extra income by renting unused space in their homes to travelers. This peer-to-peer rental model has taken off and has since been extended to virtually anything and everything. There are services that help people rent out their cars, power tools, lawn mowers, bicycles, camping equipment, and more to friends and neighbors who wouldn't use these items enough to justify buying them. This is a great model that makes use of what converts call "idling capacity" to give people access to items that they may only need once or twice without having to go out and buy them, only to have them sit on a shelf. The net effect is reduced consumption and reduced waste, which is good for the environment. The success of peer-to-peer rental services has given rise to what some are now calling the "access economy", and the mantra "access trumps ownership" can be heard echoing across the interwebs.
But before we declare ownership dead, let's take a step back and consider the value of ownership from a purely economic perspective. Consider your home. It's something you obviously use every day, and you'll need one for the rest of your life. When faced with the choice between owning a home and renting one long-term, which approach makes more economic sense is pretty obvious. If you rent, you'll spend almost as much as if you owned, only you won't be building equity. After 30 years of renting, you'll have nothing to show for it. After 30 years of paying a mortgage you'll own the home free and clear. The same holds true with a car if you live outside of an urban area and need to use one everyday. So, it seems that even in the "access economy" ownership still makes sense for the things we use everyday over a long period of time.
But what about the middle ground between these two scenarios – the things we don't use everyday but need access to long-term on a fairly regular basis? You could rent these items, but the rent vs own argument still applies. The simple truth is, if you rent something long enough you'll eventually pay for the cost of that item and have nothing to show for it. You could own these items, but then you're paying for something that will sit idle most of the time, which doesn't make much sense. As it turns out, there is a model in between renting and owning that combines the best of both worlds – shared ownership. It's a simple concept. A group of like-minded people get together and pool their resources to purchase and own something together, as a group. Each co-owner gets an equal share of usage time, and pays an equal share of the expenses. This model is, in effect, combining the usage needs of several individuals into a group that makes the economics work more like a home. The group as a whole uses the item frequently enough to make ownership the obvious answer over renting. From the co-owner's perspective, there are several benefits. It's a way to pay for the portion of the item that they'll actually use. It's also a way to multiply their purchasing power. Instead of owning something worth $10K for example, they can now afford something worth $30k or $40k depending on how many co-owners are in the group. For many, shared ownership can provide access to a lifestyle that they simply couldn't afford on their own. It also reduces consumption and waste because it's making better use of an otherwise underutilized item.
The concept of shared ownership is certainly nothing new. It's something that a few motivated people have been doing for decades with items like boats, RVs, and vacation homes, but it's never been widely adopted. The problem is that while the concept is simple, the execution is not. The first challenge is finding co-owners. If you don't already know someone interested in co-owning the same thing you are, you're pretty much out of luck. If you've managed to find co-owners, the next challenge is the logistics of setting up and managing a co-ownership arrangement. How will you allocate usage of your shared item? How will you deal with expenses that need to be shared by the co-owners? What happens if more than one owner wants to use it at the same time? Without the right tools to manage these logistical challenges, shared ownership can be a nightmare.
Thankfully, in this golden age of tech entrepreneurship, no good problem goes unsolved for long. A handful of services, like my own (Jointli.com), have taken on the challenge of making shared ownership accessible to the masses. As services that support this model continue to improve and proliferate, I believe it's only a matter of time before shared ownership catches on and becomes as common as peer-to-peer rentals are today. Instead of ownership being dead, ownership will evolve and be reinvented as collaborative consumption edges more and more into the mainstream.