Sharing economy 2.0

During the second half of the last decade the Sharing Economy boomed, driven largely by millennials’ desire for “experiences over things”. The advent of companies like Uber, Spotify, Netflix, Lime, Zipcar and WeWork meant consumers no longer needed to buy physical property to access vehicles, music, movies and even office space. Instead, they could use newly-available digital tools to simply use what they wanted, when they wanted it.

Fast forward to today and the sharing economy continues to grow at pace. The latest research from Proficient Market Insights’ Sharing Economy Report from October 2022 predicts the size of the global sharing economy market will grow from $113 billion USD in 2021 to $600 billion USD in 2027. Access over ownership remains a key driver for the trend as the changing priorities of the world make the resource-efficient and frugal elements of the sharing economy more appealing than ever. Indeed, last August French President Emmanuel Macron warned that we need to prepare for the “end of abundance”, suggesting that a more thoughtful approach to consumption was needed in the face of the dual threats of the climate and cost of living crises. The sharing economy certainly offers a solution there.

Interestingly, though, beyond access over ownership, we’re also seeing an explosion of new peer-to-peer offerings that put more emphasis on those who do invest in buying new products. These Airbnb-for-X solutions are giving owners new ways to monetize their possessions and their smart home infrastructure when they’re not in use, or when they have excess bandwidth.

Bolt Drive

Bolt Share your Care

European mobility app Bolt is embracing this approach with its new Bolt Drive ‘share your car’ feature that lets drivers earn extra cash by renting their car to others when they are not in use. While on the one hand many consumers are loathe to buy cars because of the financial investment and environmental impact and on the other hand consumers are looking for new revenue streams because of the cost-of-living crisis, the peer-to-peer scheme provides a win-win solution for both parties. According to Bolt, the new system will allow car owners to earn anywhere from €100 to over €1000 in additional income every month.

Renault Plug Inn

French car manufacturer Renault, meanwhile, has launched an app called Renault Plug Inn that creates a crowdsourced network of public and privately owned electric charging points that are available for others to use for a fee. The network creates access to electric charging in underserved remote and rural locations, but it also creates a revenue stream for those who invest in the charging points, providing them with further incentive to go electric. All elements of the transaction, from finding and booking a charger through to payment are handled by the Plug Inn app.

Tesla X PG&E virtual power plant

Finally, Tesla has partnered with power company PG&E to build a distributed power network across California made up of users’ Powerwall home energy storage systems. Not only does the network provide a backup power supply in the case of outages on the main grid, it also supplies those who opt-in a way to monetise the surplus energy captured from their solar panels. According to Tesla, those who opt-in to the arrangement can earn $2/kWh for energy used during emergency events and the accompanying app allows them to change the amount of energy they make available at any time.

The Intelligence take

What is driving this shift?

The gen Z influence

One driver of this new direction for the sharing economy is the influence of gen Z. While gen Z consumers appreciate the value and sustainability of the sharing economy model in the same way as millennials, their approach to ownership is slightly different. A 2019 survey by Alida (then known as Vision Critical) found that while 77% of millennials said they desire a ‘cool experience’ over a ‘cool product’, the same is only true of 40% of gen Z.

Crucially, while gen Z are generally committed to buying and consuming less, they are still prepared to spend on brands that share their values. According to the 5WPR Consumer Culture Report they are willing to spend (and occasionally splurge) on the right products, particularly on electronics, technology and sustainable products. “Gen Z is more willing to go through with big spends,” confirmed entrepreneur and documentary filmmaker Jia Wertz, whose recent Forbes article posited that products sold via tech-forward, immersive experiences were most likely to appeal to the generation.

Side hustle and influencer culture

Another relatively short-term driver to this shift to the Sharing Economy is the pandemic and inflation-accelerated emergence of side hustle culture. As a Refinery29 article in June last year stated: “It's official: we're living in a side hustle era,” citing data from Deloitte’s Gen Z and Millennial Survey that “42% of gen Zs and 39% of millennials now have a side hustle to make ends meet.” According to a recent survey from insurance company Aviva, as many as one in five people in the UK have started a side hustle since 2020. In this context, people’s possessions have now become a gateway to a potentially lucrative Sharing Economy side hustle. The rise of influencer culture has also led to a new direction for the sharing economy, with peer-to-peer clothing rental communities like Loanhood and By Rotation essentially inviting users to set up their own branded storefront, which they can monetise through renting their outfits.

As the spending power of gen Z continues to rise and climate-friendly and frugal consumption habits gather pace globally, the Sharing Economy 2.0 loos set to flourish.

Main image courtesy of Bolt Drive car sharing.

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