Is Sharing the New Economy?

Libby Kane
Posted

The so-called American Dream™ revolves around ownership.

Owning a house, owning a car, owning that picket fence surrounding 2.5 children (actually, it’s more like 1.8) and a four-legged pet.

But Gen Y, that pesky generation of 79 million 16-to-34-year-olds, might be redefining that dream. Statistics show that the newest generation of adults buys fewer houses and fewer cars than its predecessors.

Coupled with the meteoric rise of sites for sharing everything from recipes (Pinterest) to music (Spotify) to cars (ZipCar) to craft projects (okay, Pinterest again), we have to wonder: Is this more than a current fad?

In other words: Is sharing the way of the new economy?

Millennials Skipping Markers of ‘Adulthood’?

Let’s start with the big stuff, the cornerstones of the old-school Dream. An article published in The Atlantic earlier this year notes that the number of 20-and-30-something homeowners has been falling since 1980. In fact, the percentage of 29-to-34-year-olds granted mortgages between 2009-2011 was only half the number ten years earlier.

As far as cars, Jordan Weissman points out in The Atlantic that consumers ages 21-34 buy only 27% of all new vehicles sold in the United States, down from nearly 40% in 1985. And, while 32% of Gen Y members live in a city, a whopping 88% want to. You know what doesn’t go together so well? Cars and big cities.

“Millennials have become notorious for delaying, or entirely skipping, the traditional markers of adulthood,” writes Weissman. He’s referring to the fact that the unemployment rates for workers age 20-24 hovers around 13%, and that the percentage of married adults in the U.S. age 18-29 went from 59% in 1960 to a measly 20% in 2010. “First comes love, then comes marriage/house/car/baby carriage,” is quickly becoming outdated.

So, you might say, Gen Y is abbreviating all of these markers because they’re still young and relatively poor, right? Because many graduated from college in the midst of a recession? Because they don’t have any money to set up adult lives as defined by half a century of idealistic sitcoms?

Not quite.

Why Gen Y Just Loves Sharing

Anyone who spends time on the internet knows that there are infinite ways to share. When the Recording Industry Association of America sued file-sharing site Napster for copyright violations in 1999, the world started to realize that, like it or not, people don’t mind passing along their discoveries to others. And although the RIAA did win, that was only the beginning of a what’s-mine-is-yours sea change.

Now, you can share just about anything. From illegal internet streams of television shows to perfectly legal song-sharing sites like Spotify, to sites that facilitate borrowing clothes and books (Rent the Runway and Amazon Kindle, respectively), Gen Y is all about sharing.

The impact of growing up with the internet is surely a big influence on the new generation. It’s a resource Gen X didn’t grow up with: to find the native language of Eritrea or the perfect purple wedge espadrilles within seconds. But is it tech that’s enabling sharing, or the new generation’s underlying desire to share coinciding with the digital age?

Fast Company writes that new technology is more a byproduct than a cause of this emergent culture. Josh Allan Dykstra argues that it comes down to a change in thinking:

“Even in this strange new world, the economic laws of scarcity apply, and they are precisely what’s shifting. To ‘own something’ in the traditional sense is becoming less important, because what’s scarce has changed … We can now find and own practically anything we want, at any time, through the unending flea market of the Internet. Because of this, the balance between supply and demand has been altered, and the value has moved elsewhere.”

Why Buy When You Can Rent?

Although Gen Y is leading the trend in sharing and moving away from ownership for ownership’s sake, these resources are now out there and are accessible to members of every generation, which makes us think this is one trend with staying power.

For example:

  • Bag, Borrow or Steal: Rent designer handbags, purses, sunglasses and jewelry
  • Rent the Runway: Rent designer dresses and accessories
  • Spotify: Stream music you want to listen to, without buying it, and share access to your friends’ music
  • Netflix: Watch TV shows and movies once, twice or ten times
  • BitTorrent: Watch videos, listen to music and consume online media (the technology itself isn’t illegal)
  • HomeAway, VRBO: Rent someone’s empty vacation home for your own vacation
  • Couchsurfing: See the world by staying in a stranger’s home (or host them yourself)
  • Trusted House Sitters: House-sit for absent homeowners around the world
  • ZimRide, Carpooling.com, Sidecar: Arrange to share rides with car owners, or rent out seats in your own car
  • Zipcar: Rent cars by the hour or by the day
  • Share Some Sugar, Neighborrow: Borrow cars, tools and more from people who live nearby
  • Craigslist, Freecycle: Get used items for free, or give away things you no longer want to those who do
  • Skillshare: Barter your skills to learn skills of your choice from local teachers

There’s even a name for the new phenomenon. The theory of “collaborative consumption” posits that the economy is taking steps back toward the bartering and trading system. According to Lauren Anderson, Community Director of CollaborativeConsumption.com, ”It’s becoming an industry in its own right, creating micro-entrepreneurship opportunities for people to rent out their assets (whether physical stuff, or intangible things like time or skills), to earn supplemental income or change the way they think about their work.”

Will it continue?

According to Anderson, absolutely: “This isn’t just a short-term trend in response to the difficult economy. In fact, what brings people back to these services is the feeling of community and connection, and the unique experiences they can have with their peers, rather than faceless, anonymous brands.”

If you’re interested in even more sharing resources, try this list.

  • Apriliarider19

    Now THIS is a helpful article. I didn’t know about some of these sites! Thank you LV, for paying an article that isn’t about Canadians looking down on Americans or about insinuating I’m shallow for making more than $30k a year and not wanting to live forever with roommates.

  • Carolyn

    Awesome article! Thanks for sharing links to those helpful sites!

  • Terri_munro

    They have to share everything. They have too much college loans and not enough income. How could they possibly buy a house or a car. Necessity is the motherhood of invention. 

  • sigmatheta

    Don’t forget about collaborative CREATION like GitHub, Scratch, etc.

  • Gardeblund

    This actually sounds like a throw back to much earlier pre-me generations.  People could not afford much so they tended to share and share alike.  I think it is a much more sensible way of life.

  • http://profile.yahoo.com/R3FXXVG56BYFULVSTM76K6HFNU Reo

    Don’t forget that the amount of student loans 

  • http://profile.yahoo.com/R3FXXVG56BYFULVSTM76K6HFNU Reo

    Don’t forget the amount of student loans that are floating around this generation. It is hard to even consider affording a house when your loans breach what an average house costs – and with less forgiving APRs.

    • kgal1298

      LOL I forgot about that, but that is also true. 

  • Karishma

    Airbnb should be added to this list!

  • Elana Robinson

    I find myself annoyed by anyone who doesn’t understand why this is happening. It’s not a “phenomenon,” it’s common sense and pure necessity. Today’s awful economy, along with wages that have lagged way behind prices for many years, coupled with college loans, a healthcare system that does not “care” about anything but taking everyone’s money and avoiding helping anyone when they medically need it most, and 1/3 of all home loans underwater (mentioned in NYTimes in May), the market for sharing and renting goods and services is bigger than it’s even been in modern history. Buying a car, paying huge rent bills, transportation — everything is proportionally much more difficult for today’s young people that it was in decades past, which is also why so many young people still need support/money from their parents. Anyone who doesn’t understand this is in deep denial of reality.

    • Jane Hopke

      You do realize that in the healthcare sector, too many people expect us to do our jobs for nothing (those who don’t pay for emergency care, but get it anyways due to EMTALA) or for pennies on the dollar (Medicare and Medicaid).  Here are some other contributors to skyrocketing healthcare costs:

      1. Malpractice suits.  When any procedure is done, there are always risks.  That’s just how life operates.  However, lawyers are somehow able to convince juries otherwise.  Tort reform is essential in order to help bring costs down, especially for physicians who pay astronomical amounts for their coverage.

      2. Technology and Big Pharma research and development costs.  Especially in large cities, there are major pressures to compete with the latest “toy” that’s out there in order to attract patients.  As far as R&D is concerned with Big Pharma, some of these are unwarranted, because patents are approved for a lot of drugs that are just a slight tweak of the old formula where the patent is about to expire, so they can keep a stranglehold on the market.

      3. As it’s been said before on this thread, the high cost of higher education.  Student loans, especially for those who go into internal medicine or family practice where the salaries are lower than specialized physicians, that eats a LOT into one’s wallet.  Somehow, we have to figure out how to lower medical school costs while keeping standards high.  Not an easy task.

      So between being forced to treat everyone regardless of ability to pay in the ER, the extremely low reimbursement rates from government sources, lack of tort reform, and the high costs of educating and training your physicians as well as new technology and drugs, THAT is why healthcare costs to the consumer are out of control.

      It’s not that we don’t care, it’s that our hands are tied in REALLY uncomfortable positions.

    • JohnnySmith0

      Nah, it’s probably more to do with the Internet…

  • kgal1298

    I feel like somehow you just managed to describe a quasi form of socialism. Maybe that’s true. We do like to share but that’s because we don’t like to pay because I think a lot of us saw a lot of people lose a lot of money and we wised up and we had the internet. No longer did we need to make the mistakes made before us because the internet is there to tell us horror stories and to give us advice when we are too afraid to ask. After all we can all by anonymous online and if we can save money why not? Seems like it should be a surprise this happened this is revolution just people are adapting to it and not realizing it for what it is. 

    • http://twitter.com/l__anderson Lauren Anderson

      This is certainly how we see the rise of Collaborative Consumption – as a revolution that could have quite a significant impact on our consumer society. The internet has enabled us to access the things we need any time, any where which is one part of this shift. But more importantly our consumer values are changing and we no longer measure our importance based on the amount of stuff we own – in fact we want to be more clever about how we access these things, saving money and being more environmentally responsible in the process. And we also value these new opportunities to connect to each other as well. While anonymity has its place, in fact this new world is about transparency and trust.

    • JohnnySmith0

       There’s nothing wrong with sharing. Sounds like you’ve bought the propaganda hook, line, and sinker.

  • http://profile.yahoo.com/PORF23CW236BX43BIP3CU7CXSM Paris

    You think RIAA won? That’s so cute!

  • Amber

    Good article LV. I myself have a lifestyle of borrowing, buying used when possible, DIY, and I rent out a room in the house we own to make some extra income. My husband and I are young and are fortunate enough to make enough to get by and save. But, doing things a little differently than just buying what we want brand new, definitely helps us live a more comfortable lifestyle.

  • Benita

    Great article. Nov 14th is #globalsharingday an opportunity to shine a spotlight on the #sharingeconomy via @peoplewhoshare To get involved email benita@thepeoplewhoshare.com

  • rock

    I have never, ever regretted my home purchase. I purchased my home at age 25, and it’s almost paid off.I am so glad I got my house when I was very young. I feel sorry for the renters. They have nothing to show for it. I have hundreds of thousands of dollars to my name. Do you get that if you rent?

  • JoannaSPatterson

    Sharing is a traditional concept that was lost when people began moving into the suburbs where houses were so far apart that people often didn’t even know their next-door neighbors.  I remember my mother and her friends reminiscing about their eating lunch together every day during the Great Depression, each bringing whatever she had.  They said it always seemed like they had more to eat that that way.  I grew up in a close-knit neighborhood in the 1950′s where borrowing and sharing were a given.  A neighbor two doors away helped my Dad enclose our back porch to make a sleeping porch.  My Dad helped a next door neighbor build a new garage, and so on.  One summer my Dad’s company went on strike, and a neighbor across the street offered to pay for my piano lessons for the duration. No, sharing isn’t new, it was just forgotten for a while.  The idea that it takes a village to raise a child isn’t new either, and it doesn’t always take a whole village.  Most times a close-knit neighborhood can accomplish that.

  • Miranda S

    You should add Airbnb to this list!

  • Matt_down

    Not sure if people have seen this site, 
    http://www.newdream.org/programs/collaborative-communities/community-action-kit/sharing a great way to start sharing in a community/neighbourhood. 

  • Jen

    I keep hearing about how my generation doesn’t want to own a house or car… and every member of my generation that I know does either own those things or wants to. This concept is so east coast metropolitan centric! There are still enormous chunks of the country where getting things from craigslist or sharing a car requires far more work than the money saved is worth, and where with diligent savings you can own these things on $30,000 a year. Maybe my generation needs to grow up and realize that there are other ways to be happy (and probably happier) than living off your parents dime in a crowded Manhattan apartment. I’m not defending wanton consumerism here, but there are other ways to save money you could have spent on designer handbags besides renting them- I.E., you could just SAVE the money you could have spent on designer handbags, or on renting them. Those kinds of sites allow people  to pretend to wealth they don’t have, which is a dangerous relationship to have with money. 

  • Dopios

    Great post! Also Gobble (www.gobble.com)
    where you can cook for others and Dopios (www.dopios.com) where you can become a local in your city to show its secret gems to travelers and earn a few extra dollars to fuel your passions! 

  • http://www.facebook.com/bill.costley.796 Bill Costley

    Fin@lly!

  • http://www.facebook.com/CEO.Fun2rent Shawn Gardner

    With 13 million recreational boats in the U.S, that sit idle 350 days on average, let us not forget the sharing of boats and other powersports. This is why Fun2Rent: http://fun2rent.com/ was started. 

  • Apple

    I think the show “hoarders” has an impact as well. The next generation can see in real time what the endgame of massive accumulation of usless crap is, and can think now about what is really important to own, and just borrow or ebay away the rest when its no longer needed.