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Instead of Sharing Economy, Let’s Call It “Resource Efficiency”

CCA LiveE | Friday February 1st, 2013 | 3 Comments

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bike sharingThis is part of a series of articles by MBA students at California College of the Arts dMBA program. Follow along here.

By Alex Ali

Why do we have so many resources that go unused? When I mention resources, I’m not talking about the traditional definition: natural resources. I mean: time, objects, physical spaces – essentially anything and everything of value that for whatever reason is not being used. Innovative firms like Airbnb, Lyft, and Zipcar have centered their business models around existing resources that were previously untapped. How can we drive individuals and organizations to reclaim existing unused resources for previously unexplored opportunities?

This concept has been dubbed the “sharing economy,” but this moniker is not entirely accurate. When we think of sharing, transactions are normally free. But attaching a price tag to them is exactly what is happening here. Ordinary people have been empowered to enter a market with relative ease and profit from resources at their disposal which were previously unused.

I’d like to propose we drop the term “sharing economy” and instead replace it with “social efficiency.” Having the word economy in any moniker tends to set the expectation that regulations are somehow related. Which is what seems to be happening to share ride companies like Lyft. If we instead focus on how we can be more efficient with our consumption of products, services, time, etc. we may be able to increase our social efficiency and in turn foster stronger communities based on relationships with others, in place of things.

Companies are taking advantage of this as well; take Zipcar for instance. Their on-demand car rental service relies on the convenience of car locations – they have been able to leverage existing parking space in gas stations, parking garages (public and private), and other places in order to allow easy access to their fleet. Similarly, Lyft offers a platform which connects drivers who have room for an extra person and are willing to give others a ride for a “donation.” It is not only physical space that is finding new uses, but services as well.

Organizations like Openwireless.org are striving to build communities around sharing and in the process changing this “consuming for one” mantra that we’ve accepted as the norm. Openwireless.org aims to open up personal Wi-Fi networks to everyone within range, allowing access for free, all while still securing your personal data. Another firm facilitating re-using is Yerdle, a platform which helps users offer items or services to friends through social networks. Do you have a coffee table that was just replaced? Simply upload a photo onto Yerdle, chances are someone you know may need a coffee table.

Resource reuse is starting to take hold in urban areas. We’ve been pre-wired as consumers to think that we need to purchase something if we have a need, but is this always the case? Living in a city where space is limited, do I really need a toolset? Probably not, but then what do I do when I have a frame to hang on my wall? Typically, I’d call my friend and borrow his or hers, but what if I could increase my pool of available tool sets? Innovative companies like Yerdle and Airbnb are leveraging social and technology trends and shifting the way we think about consuming, for the better.

[Image credit: EnvironmentBlog, Flickr]


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  • http://twitter.com/gorenflo Neal Gorenflo

    No, I like sharing economy because the change I want is not about stuff, it’s about better relationships and a more resilient and cohesive society that comes when wealth and well being is spread more evenly in society.

  • http://twitter.com/heinoomen Hein Oomen

    Even though I don’t really see a reason for replacing the term “Sharing Economy”, I do agree that the concept should be more promoted from the perspective of resource efficiency. Neal Gorenflo’s wish for change in social relationships is great but unfortunately not every person on this planet is triggered by these ideals. By emphasizing the benefits towards resource efficiency, we could leverage the (social) concept of sharing to a broader audience.

  • http://greenandprofitable.com Shel Horowitz-Green Marketer

    In 1975, I discovered a neighborhood where instead of everyone buying their own lawn mower, they pitched in to collectively own a small tractor. I used this idea in 1990 to organize a laser printer coop, back when they cost $4500. In my award-winning eighth book Guerrilla Marketing Goes Green, I discuss resource-sharing *marketing* partnerships.

    As for what to call it: I agree that “sharing economy” excludes commerce solutions like Zipcar, but social efficiency” doesn’t mean anything to me. Something along the lines of social resource maximization or social resource saving?
    –Shel Horowitz, GreenAndProfitable.com