Collaborative Consumption Makes Life Better

Since the U.S. was founded, the ethos of the American Dream has motivated how we consume.  The dream was to own the biggest and best that you could buy. The more you owned, the better your quality of life.And even then, the grass was greener on the other side.

Today the economy is in the biggest recession since the Great Depression, resources are depleted, and more people are struggling to afford the amenities to make their lives better. For many, the original sentiment of the American Dream seems like a pipe dream. People are scaling back and ownership of luxury items like cars and houses has lost its luster.

Collaborative Consumption is a movement to disrupt the economic model of owning things for your own personal use. Instead of owning, now you can share, barter, rent, and borrow what you need thanks to a burgeoning marketplace of online networks that make it easy to exchange goods in real time.

Rachel Botsman, a Collaborative Consumption leader and founder of the Collaborative Fund, explains in a Ted Talk how globalization paired with socially enabled technology has “wired our world to share”:

We now live in a global village where we can mimic the ties that used to happen face to face. But on a scale and in ways that have never been possible before. So what’s actually happening is that social networks and real time technologies are taking us back where we’re bartering, trading, swapping, sharing, but they’re being reinvented into dynamic and appealing forms.

Sharing through online networks is not only becoming a ubiquitous way to consume, it is also the most sensible. Owners of resources can make passive income on assets, and people who don’t want the hassle and expense of owning resources can just pay for what they use. It saves everyone money and it removes the middle man to make transactions quick and convenient.

Collaborative consumption is also a win for the environment. The more we share the less we waste, and we really need to stop wasting. A recent climate change analysis reported by the New York Times exposes an undeniable and urgent need to reinvent the way we consume to stop destroying our planet. Redistributing resources instead of manufacturing new ones is an essential part of the solution. As Botsman cleverly states, it has become the fifth R: Reduce, Reuse, Recycle, Repair and Redistribute.

Sharing is also better for the greater good. It builds community, connects neighbors that may otherwise be strangers, and raises the standard of living for everyone. Collaboration with your peers in the age of social networks breeds trust, solidarity and even friendship, without sacrificing personal freedom and quality of life. As Botsman states, technology makes sharing frictionless and fun.

So why not share? Some might argue the risks are not worth the gains. No one can deny that there isn’t a degree of vulnerability you accept when connecting with people you don’t know. But actual statistics show that negative outcomes associated with sharing are pretty low: Yes, a renter though AirBnB trashed a woman’s house, but that was one bad occurrence out of millions of successful stays. Plus, if you’re conscientious about who you decide to collaborate with and network on sites that vet their users, you can minimize the risk even further.

Zimride mitigates risk by holding users accountable for their reputation through peer review, by requiring a Facebook login to ensure user identity, and by displaying the verified networks the user is a member of. This all results in a system that naturally rewards users who share more personal info and roots out users who aren’t trustworthy. You also have the option to communicate directly with users before booking a ride. As a Zimrider, you always have a choice of who you ride with.

It’s also your choice whether you jump on the sharing band wagon or not, but you should know that your neighbors are, and by the millions. Collaborative consumption has become such a huge trend because it reinvents an economic system that is in desperate need of improvement. Globalization and a shared economy are now facts of life, and people are starting to take advantage of this virtually small world by connecting with their community to make their lives better. Now the American Dream is not about what I can do for me, but what we can do for us. And together, we can all have greener grass.

Are Carpool Matching Services Worthwhile?

Over the next few weeks, I aim to uncover the dust from all those great 1970s carpool studies and discuss how they do or do not relate to life in 2009. Finding this research has taken me from the basement of Stanford’s library to days of internet searches to uncover all the best carpooling academic literature. My grad professors would be proud; they pounded the tables about the importance of data.

Even before starting at Zimride this summer, I wondered if carpool services were worthwhile. Do they help the environment? Are they effective at saving people real sums of money, reducing congestion, or making life more pleasant? Would they pair your grandma and the lead singer of Metallica? Let’s hope not! Or poor Tessa would surely get a few more “customer service” phone calls. We all know how those old rideshare boards, don’t get much use. Out of 50k students at my Alma Mater, I don’t think there were ever more than 10 postcards for rides on the ride board. For all you whiz kids, that’s 0.02%, certainly a number that would get any TDM (Transportation Demand Management) director fired. Just to settle things, Zimride does a lot better than matching 10 rides per university!

Rideboards: 0 Zimride: 1

Then I looked for support in ivory tower research. It’s always best to start with summaries, that’s why you’re here, right? A great first start into understanding ridesharing was “The Determinants of Ridesharing: Literature Review” by Keith Hwang and Genevieve Giuliano (School of Urban and Regional Planning, University of Southern California, Working Paper, May 1990). These guys did a bunch of leg work for me, although my legs are getting pretty buff from biking 6 miles a day to/from the local Caltrain station to get to work!

A big ah ha moment came to me when I read “With matching services, employees rideshare approximately 10 percent more than without it within each size category of firm.”

Then I saw the data of how employees get to work at employers with over 10,000 employees. Only 11.15% of employees at firms without matching programs participated in ridesharing vs. 24.23% of employees at firms with matching programs. That’s a huge difference!

Single occupancy vehicle participation rates were also striking: 85.81% at those without matching programs vs. 74.74% for those with matching programs. Ok, so you’re probably thinking to yourself, those firms without matching programs probably have different efforts focused on TDM. Well, the participation rates of public transportation would be vastly different if that was the case. However, that’s not the case; public transit participation rates were 1.95% for firms with matching programs and 1.91% for firms without matching programs.

Case closed. Matching programs work and work really well.

Note: the above data was originally published by Ferguson, E. (1990a) “An Evaluation of Employer Ridesharing Programs in Southern California.” Transportation Research Record. 1280.