The Project: What’s the Next Iteration of the Sharing Economy?
Our Future of Sharing project begins with the premise that sharing is good, and that a new way of organizing an economy around sharing is a good thing too. We believe that the sharing economy that has emerged in recent years is largely an improvement over the old system of highly individualized consumption where every person owns a house, car, or bike—and no one else can use it. Sharing represents a big shift in how our society operates, and has the potential to democratize the economy and more broadly distribute the benefits of shared assets. Sharing is better for the environment, allows more people to live in crowded cities, and can foster better understanding among diverse groups of people.
The sharing economy is here to stay and will only get much bigger over time. The way people live and work is changing, and the sharing economy reflects these larger trends and values. This is particularly true of the Millennial generation, the largest generation in American history, now aged 19 to 36. Millennials are prioritizing access over ownership, are increasingly seeking flexibility in the workplace, and are overwhelming moving back into cities. They are the new American workers, consumers and citizens who will shape the country for decades to come.
Any big system change will inevitably have repercussions that need to be addressed. The sharing economy is no different. It’s time for city governments and local communities to rethink old regulations and develop new rules that fit the 21st century. Over the course of this series, we’ll explore how we can make this new system work better for those who use it, those who work within it, and those who are affected by it. This Future of Sharing project will attempt to answer the question: How can we make the sharing economy work for everyone?
We’re going to spend 2017 in conversation with thought leaders who understand the sharing economy and its potential, as well as people who know how to run cities, including those who are wary of this new approach. We plan to get all sides talking to each other and sharing ideas. We’ll take what we’re learning and create media pieces that explain what’s going on in this amorphous and often confusing new world. We believe that the nascent sharing economy can evolve in a way that makes living in cities better for everyone far into the future. Follow us as together we figure out the next iteration of the sharing economy: The Future of Sharing.
The Context: How Did We Get Here, And Where Are We Going?
As our world becomes more digital and globalized, the way people live and work is fundamentally changing. An economy organized around sharing is a reflection of these larger forces, and also carries the potential to make cities work better for everyone.
The sharing economy – if done right – could help democratize the larger economy and give the middle class new ways to supplement their incomes. It could dramatically cut down on wasted resources and help build sustainable cities capable of tackling the challenge of climate change. Sharing cross-connects strangers and so could help foster better understanding in our increasingly diverse and polarized society.
In the less than ten years since its inception, the full potential of the sharing economy has not yet been realized. It’s time to evaluate how we got here, what’s working and what’s not working, and what we need to do next.
American cities were constructed around the concept of individual ownership and consumption, and these trends were exacerbated by the population boom and growth of the suburbs following World War II. The American dream meant that each individual owned his or her own car and house, and everything within it. The economy depended on producing more and more consumer goods.
This has created a massive problem, not only of physical waste, but also of wasted resources. Rooms, or entire houses, remain empty for weeks, or months, or years. Cars stay parked outside of offices or homes most of the day while we sit inside (the average car is unused 95 percent of the time). More than 90 percent of Americans agree with the statement “the way we live produces too much waste.”
The sharing economy provides an alternative to this model. Prizing access over ownership and experiences over possessions—as younger generations tend to do—allows us to cut down on physical waste and make the most of our resources.
Potential Economic Benefits
The sharing economy took off right around the financial crash of 2008 and the Great Recession. One reason is that Individuals can use assets they own – like a house or a car – to supplement their income by renting out their house while they’re gone or using their car to drive people around on the weekend. The sharing economy can be viewed as a democratizing force in a global economy that tends to favor those with huge assets.
For many people, the sharing economy is a better way to work. This is particularly true of the Millennial generation, those between ages 18 to 35, the largest generation in American history. Many Millennials value independence and want more flexibility in what they do. Some may want to focus their energy on entrepreneurial ventures or artistic projects and supplement that passion with sharing economy gigs.
How the Millennial generation chooses to work is extremely important in shaping larger societal patterns, and will only become more important in the future. Millennials already make up 34 percent of the U.S. workforce – slightly more than the rapidly retiring Boomers. By 2025, Millennials will account for 75 percent of all workers. This explains, in part, why the sharing economy is one of the fastest growing sectors of the economy. For example, Airbnb features more than two million listings in more than 34,000 cities worldwide, while Uber operates in more than 450 cities.
Millennials are overwhelmingly choosing to live in cities rather than suburbs. In the early 21st century, the growth of American cities outpaced the growth of suburbs for the first time since the 1920s. This rising demand pushes the market value of apartments and homes far above what many Americans can afford. Sharing more of what we already have is one way to deal with overcrowded cities.
All these sharing platforms are largely possible because of the increasing embeddedness of smartphones in our everyday lives. Smartphones that connect everyone to everyone are key to organizing a city around sharing, and one of the main reasons for the relatively recent emergence of the sharing economy.
Millennials, the “connected” generation, were the first generation to embrace the sharing economy, and they have ushered it into the mainstream. If done right, the connective aspects and peer-to-peer nature of the sharing economy have the potential to help rebuild the sense of community lacking in many large urban centers.
Making the Big Transition
As with all change wrought by new technologies, disruption to the status quo is inevitable. The city regulations related to taxis and hotels are less applicable today than they were a decade ago. The sharing economy in its current form has its share of rough edges and areas that could be improved, but it also has large and growing constituencies of people who use these services and who like working within them.
The time has come for cities to develop new rules for the sharing economy. To pave the way for a digital, more sustainable 21st century, cities need to work together with other stakeholders—technologists who understand the sharing economy, innovators who are thinking about new ways to run cities, politicians and activists, users and workers—to create a sharing economy that works for everyone.
Our Future of Sharing series aims to do just that. We plan to gather innovators, both virtually and in person, to discuss the benefits and challenges of the current sharing economy, and come up with ways we can improve it. We’ll also be explaining what we are learning by creating short videos, animations, graphics, articles and posts. If you’re interested in the Sharing Economy 2.0, and in creating a better future for cities, we hope you’ll follow the conversation over the course of the year.