Sharing Consumption: the City As Platform

Sharing Consumption: The City as Platform At its best, good city-making leads to the highest achievement of human culture. —Charles Landry Chapter Introduction and Outline In this chapter we examine the contemporary revival of sharing as collaborative consumption in mediated (and particularly commercial) forms in cities such as San Francisco, which is actively leveraging its image as a smart, high-tech city. We report existing surveys of sharing behaviors and note especially the current and likely future role of an increasingly researched demographic: the Millennials. We illustrate the boom in collaborative consumption with examples from food sharing in particular. We then focus on key drivers of this revival: technical, environmental, economic, and particularly cultural drivers, examining the new norms that have emerged in online sharing and are increasingly being exhibited in the real world. We explore the economic logics of sharing and examine some of the pros and cons of approaching sharing in this way; we outline, among other things, how incumbent businesses are responding to the sharing paradigm. The chapter concludes by beginning to examine the risks and benefits of an intrusion of commercial sharing into the social realm. Sharing, as we discuss more fully in chapter 2, is a sociocultural, evolutionary trait that enabled the development of hunting, agriculture, trade, craft, and manufacturing—and thus cities. Yet with increased marketiza- tion, industrialization, and consumerism, cities have become spaces in which this evolutionary form of sociocultural sharing has been weakened, 1 especially in more affluent societies, as social capital has been eroded, trust 2 undermined by growing inequality, and the togetherness of cities replaced Copyright © ${Date}. ${Publisher}. All rights reserved. © ${Date}. ${Publisher}. Copyright by private withdrawal. 3 Yet at the same time, a new, distinct, and predomi- nantly urban form of (inter)mediated sharing is emerging, exemplified best in 28 Chapter 1 “smart” and “wired” cities such as San Francisco (and increasingly Seoul and Bengaluru). In urban societies, but increasingly in others too, with the pres- ence of smartphones and other technologies, we are witnessing a morphing of our evolutionary propensity for social-cultural sharing toward mediated sharing using the approaches described in the San Francisco case study. In this sense, it could be argued that the emerging sharing economy is simply human nature reasserting itself via these new, wired platforms. As we will see, however, mediated sharing is a contested space, with a range of both commercial and communal intermediaries seeking to establish themselves. The Sharing Revival As of 2014, at least 350,000 people in 34,000 different cities had shared their properties using Airbnb. The San Francisco-based couch-surfing platform earns around $250 million a year from its 11 million users. As a result its putative corporate value now exceeds $10 billion.4 Airbnb is part of a rapidly growing global sharing economy predicted by Price Waterhouse Coopers to exceed $335 billion annual turnover by 2025.5 Airbnb is typical in using a brokering model: in exchange for providing the market and services like customer support, payment processing, and providing host insur- ance, the company takes a 3 percent cut from the host and a 6–12 percent cut from the guest, which varies depending on the property price.6 Airbnb is perhaps the leading example of the commercial mediated sharing platforms that are spreading through the urban global North, not only but arguably particularly rapidly, among the younger generation—the Mil- lennials as they are called in the US—signaling a particular evolution in norms. In recent years, sharing behaviors have spread from cyberspace to urban space around the world. A 2013 survey conducted by the research firm Lat- itude (in conjunction with Shareable magazine) found 75 percent in the US sharing digitally, and 50–65 percent in both the US and UK sharing in other domains (sharing cars, living space, clothes, etc.), albeit often at a small scale. 7 In Germany too, “55 % have experience of alternative forms of ownership and consumption (product-service systems, private business transactions or collaborative consumption).” 8 Moreover, mediated sharing behaviors appear to be multiplying through the establishment of sharing norms and trust building online, 9 the importance of which cannot be underestimated. 10 Copyright © ${Date}. ${Publisher}. All rights reserved. © ${Date}. ${Publisher}. Copyright 11 Surveys on sharing behavior have been undertaken globally; interna- 12 13 tionally (comparing Canada, the US, and the UK); nationally in the US, Sharing Consumption 29 Germany, 14 and the UK; 15 and in some cities, such as Vancouver, Canada 16 . These surveys generally recognize growing individualism, “with more homes occupied by single people and more cars on the road with single drivers,” 17 and yet they reveal demand for more sharing. For example, “Over half of the UK would love to find ways of being able to share their time and resources within their local community [and] … one in three people would be willing to share their garden with someone else locally.” 18 In the US, more than half of those surveyed have “rented, leased or borrowed the sorts of items people traditionally own in the last two years (52 percent), and more than 8 out of 10 Americans (83 percent) say they would rent, lease or borrow these items, instead of buying them, if they could do so easily.” 19 Another survey indicates that “75% of respondents predicted their sharing of physical objects and spaces will increase in the next 5 years.”20 Online sharing is common globally too. In an online survey of 30,000 Internet users across 60 countries, Nielsen found more than two-thirds were keen to share, with desire to participate significantly higher in Asia (around 80 percent) and Latin America, Africa and Middle East (around 70 percent) than in North America and Europe (around 50 percent). 21 In the Latitude survey, most participants (78 percent) had also used a local, peer-to-peer web platform such as Craigslist or Freecycle, where online connectivity facilitates offline sharing and social activities. But in Vancouver, Canada, the researcher Chris Diplock found “that less than 10% of respondents reported that they currently lend and/or borrow physical objects or spaces with peers through an online service.” However, “70% of this group of respondents agreed that sharing online has helped them share offline.” 22 Sharing is expected to grow here too, as “1 out of every 3 people in Vancouver are interested in sharing more with their peers, with individu- als 26 to 40 reporting the most interest of all age groups.”23 Similarly, in the UK, 64 percent report participating in collaborative economy activities, with parents and employed professionals (age 25–54) being more active than pensioners, semi- and un-skilled employees, the unemployed, and those from ethnic minority groups.24 The patterns are different in the US: “More than any other age group, Americans 55 and older are more likely to engage in this behavior because they don’t want to maintain, pay for maintenance, or store the items over time.” 25 And: Participants aged 40+ were more likely to feel comfortable sharing with anyone at all who joins a sharing community … however, Millennials were more likely to feel Copyright © ${Date}. ${Publisher}. All rights reserved. © ${Date}. ${Publisher}. Copyright positively about the idea of sharing, more open to trying it, and more optimistic about its promise for the future. 26 30 Chapter 1 Convenience (46 percent) tops the motivations for older Americans sharing or renting, while cost (45 percent) dominates for younger ones. Younger respondents also cite minimizing waste and conserving the environment as motivations about twice as frequently as older ones. 27 Community building and other intrinsic motivations are widespread. In the Latitude survey “sav- ing money” and being “good for society” were both cited by two-thirds of respondents. 28 And in the UK, reportedly, “75% of us believe that sharing is good for the environment … [and while] 7 out of 10 people … say that sharing makes us feel better about ourselves, 8 out of 10 say that sharing makes them happy.” 29 The business analyst Jeremiah Owyang undertook what he describes as “the largest study of the collaborative economy” (90,112 people in the US, Canada, and the UK) 30 and identified three distinct segments: First, re-sharers : those who buy and/or sell pre-owned goods online (for example, on Craigslist or eBay), but have not yet ventured into other kinds of sharing. Second, neo-sharers : people who use the newer generation of sharing sites and apps like Etsy, TaskRabbit, Uber, Airbnb, and Kickstarter. And third, non-sharers : people who have yet to engage in the collaborative economy. But many of these non-sharers report intentions to try sharing services (in particular, re-sharing sites like eBay) in the next 12 months. Vibrant sharing economies are also emerging in Europe, Australia, South Africa, and some cities in Latin America and the Middle East. In Australia, for example, “new collaborative consumption startups are appearing on a regular basis and participation is growing” according to Chris Riedy of the Institute for Sustainable Futures in Sydney. 31 The Millennials The Millennial generation (also known as Gen Y, ages 18–33) forms the largest cohort in history (80 million) in a country, which more than any other, sets global cultural trends.32 This generation appears particularly active in and receptive to mediated sharing, especially in cities like San Francisco. These younger people hold different values than their parents and grandparents did at their age, including a trend toward minimalism and disownership. Millennials have been coined “the cheapest generation,” in that they are not buying cars or homes at the rate their predecessors did.

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