My new pattern requires renting cars at the airports as needed. I am progressively ceasing to own things, not on a political-schism basis,…but simply on a practical basis. Possession is becoming progressively burdensome and wasteful and therefore obsolete. — R. Buckminster Fuller, Operations Manual to Spaceship Earth
Fuller was a bit ahead of his time, but he was right to observe that the world has a lot of excess capacity: our cars sit unused for most of the day, our houses sit empty while we are away at work or socializing, just to name a few obvious examples. What companies like Lyft and AirBnB do is provide a platform for that spare capacity to be put to work. Technology is adding to and facilitating this process in ways large and small. For example, I loaned someone a book off my Kindle the other day — it was quick and easy, and further simplifying the process, the book will be automatically returned after a set amount of time.
Median income is down 7%, and median net worth is down 28% over the last 10 years (BLS) while costs have risen, but these business models, which offer access to goods and services without the substantial investment required for an outright purchase, have been successful during the downturn. The same thing is going on in the corporate world as US companies have been functioning with less capital and fewer people since 2008. Companies are also utilizing less space per employee as more people work from home. Similarly, there has been a rise of co-working spaces, a form of shared office space, as various companies, often (but not always) aligned around a single field or ideology, pool resources to time-share space rather than outright owning it.
The top three expenses for young people are housing, transportation, and education. The rental markets are strong, and the demand is increasingly concentrated in the form of micro-apartments in major cities. Home ownership has not bounced back from the housing bubble. On the transportation side, the number of people who have driver’s license is steadily decreasing, and the number of miles traveled per year is at a multi-decade low in the US. And with the rise of open online courses and other technologies, the traditional degree is under threat, a trend that will continue with the ongoing increase in the cost of physically attending brick-and-mortar universities. It would cost me twice as much today to get my degree from an in-state school, a cost that I simply could not have borne.
While this phenomenon is driven by the economy, I think that there is a generational effect here as well. When you grow up posting, sharing, and tweeting, you are used to being constantly connected, often to people you don’t actually know. All of a sudden, it doesn’t seem so strange to loan someone your car or rent them a room in your condo. There’s definitely a cultural spillover from growing up connected to sharing physical goods and spaces.
It’s interesting to think about what’s next. What big asset do you own that you don’t have to? Where else is there spare capacity? What is the most valuable thing you own, and would you share it with someone else? It’s fascinating to watch how mobile technology is manifesting change in the physical world, attacking everything from taxi to hotel business models. But that’s not a bad thing for society at large (the individual taxi driver or hotel owner is a different story, of course). At the end of the day, if it leads to more efficiency and less stuff, it will be a huge win.