An article that’s recently been the rounds of the web included this quote from U.S. brokerage firm, ConvergEx:
“Americans of every demographic are flocking to services like Airbnb, Task Rabbit, and Bag Borrow and Steal for one overwhelming reason: Renting and sharing allows us to live the life we want without spending beyond our means.”
We know that more and more Australians are doing the same thing. So the question is, is this:
- pretty much all-round awesome; or
- a worrisome sign, and potential harbinger of economic collapse?
The answer you choose probably depends on whether you’re into spending your money wisely, or an investment broker (which is not to imply that you can’t be both.)
ConvergEx went for option (b). In pointing out that sharing saves people money, it wasn’t meaning to compliment Americans for their thriftiness. The brokerage went on to warn its clients that the potential ripple effects of the sharing economy, which reduces demand for more Stuff, could be ‘catastrophic’.
The car share movement: not so great for car dealers
The brokerage pointed out that if consumers choose to car-share instead of buying a new vehicle, demand for new cars drops.
Which is – well, basically the whole point.
Car-sharing offers an alternative to the “one person, one car” model of personal mobility. Ultimately, its aim is to lead to fewer cars being made and bought, and fewer kilometres driven as people use cars more selectively.
This is not great news for car dealers, or petroleum producers, or the builders of mega parking stations.
For the rest of us, it looks uncannily like a good outcome.
No-one misses the dung
There have of course been major disruptions to the transportation industry before – the most obvious being the shift from horse power (the kind that left mountains of crap in the streets) to horsepower (the kind that leaves tonnes of crap in the air). That shift had complex causes and far-reaching consequences, as described in detail in this article.
As with other economic megatrends like globalisation, e-commerce and the quest for sustainability, the sharing economy will bring about change for both consumers and suppliers of goods and services. Not all of the businesses that now exist will make it through the next decade – nor do they necessarily deserve to.
When you car share you buy the ride, not the horse
Some forward-thinking car manufacturers, recognising that people are increasingly looking to buy transport rather than a vehicle, have been considering innovative ways to provide mobility services rather than simply rolling more cars off the production lines. Others are pinning their hopes on the rise of multiple-car households to offload as many cars as possible.
The problem is, we can’t keep building more cars indefinitely – and increasingly, people aren’t interested in the cost and hassle of owning one just so that they can drive somewhere now and then. That’s where car sharing steps in. It meets the demand for car transportation, instead of creating demand for cars.
Imagine a neighbourhood with less than half the number of cars that currently clog its streets – a neighbourhood with plenty of alternative transport options, backed up by convenient and low-cost access to a car when you actually need one. It’s a place where people no longer need to waste thousands of dollars a year to have a car waiting in the driveway just in case they need it, and can live car free (and enjoy simpler, less stressful lives).
If this is what catastrophe looks like, then we’re proud to be a part of it.