We’re usually taught from a young age to be wary of the people we trust. You go through life meeting all sorts of people from family members to teachers, friends, colleagues and so on. Each new person we meet, we assign some sort of ‘trust score’ whereby we calculate in our heads how much reliance and confidence we have with that person, no matter what the thing in question is (a secret, your car, money or even their word). Today, I think that's a little different thanks to technology and its self-governing attributes but I’ll get to that later on. Fast forward a number of years later and trust is the new currency in the economy.
The intensification of consumption, by way of collaboration, in the world has risen undoubtedly thanks to new technology and the start-ups that harness its power. Paperclip is a prime example of this, amongst other technology start-ups. We encourage you to buy, sell and swap goods from strangers you’ve never met before and instil a level of trust in them based on a self-governing system of reviews and ratings. 20 years ago, this would have seemed insane; stranger = danger (remember when entering your credit card information online was deemed senseless? I don’t.) Companies such as AirBnB have proven that this new form of consumption does work, and it is evident in both their business model and user base. AirBnB lets you post images of the most intimate rooms of your house to then post on the internet in an attempt to attract random strangers to rent from you. BlaBlaCar is another start-up which lets people use their personal assets commercially; it allows you to hitchhike in someone else’s car for a small fee as opposed to an expensive train or bus ticket. These two companies are examples of several start-ups that have utilised everyday assets to derive greater value from them. The evidence can again be seen from the amount of consumers using these services. Welcome to the world of collaborative consumption.
By definition, collaborative consumption is a social and economic system driven by network technologies that enable the sharing and exchange of assets from spaces to skills to cars in a way and on a social scale never possible before (Botsman, 2012). Consumers are starting to see the efficiency and value in trading, renting and bartering assets, skills and time in a fairly democratic, self-governing way. This is apparent by looking at the types of businesses that operate in the market today. As mentioned earlier, this is all possible thanks to the rise and diversity of technology. As technology advances by way of sociability, geography and mobility, it increases both efficiency and trust among people almost simultaneously (think social media, GPS locations and mobile phones; they've all increased efficiency and trust). What’s more astonishing is the way in which ordinary people have had their lives changed simply by engaging in collaborative consumption, whether that be by the higher income they now generate or the relationships they build through networks. It quite a shift from when the only things we shared were trains, buses, parks and stadiums.
So what now? As consumers and as entrepreneurs we should continue our participation in the collaborative consumption ecosystem and find yet more ways to expand its reach. By increasing our consumption collaboratively, we leave room for more efficiency in both the environment and the economy. Some firms are starting to realise this; Uber is already working towards it. As consumers, we can start by using more services like Paperclip, AirBnB, TaskRabbit etc, which will see the consumer better off. Adopting these types of consumption habits will be our biggest step towards a more efficient future.
Published by: alan in Musings