Is Ownership Over?
In companies such as Lyft and Airbnb, we are seeing more than just entrepreneurial success; we are witnessing an important global economic shift. These companies are not just the beginning of The Sharing Economy. They represent, in some instances, the end of The Ownership Economy.
For decades, companies built their fortunes around the concept of ownership. They expected consumers to work hard in order to own things like cars and appliances and vacation homes.
But now, The Sharing Economy has offered consumers a new option. Instead of owning, they can share – paying for the use of the item when they want it. This is not just for cares and hotels. Many industries are testing The Sharing Economy construct, making The Ownership Economy seem expensive and out of touch.
I’m not only talking about alternatives to existing services, but a change in the basic nature of the assets, properties, and services. For example, Lyft considers the total utilization of automobile seats (about 5-6 per vehicle) to be just 2%. Their business is not to compete with the taxi and limousine market, which is just $10 billion, or the rental car business, which is about $20-$30 billion. Overall this market is still very small. The Lyft model is the idea that many people will stop owning cars and will start sharing rides more and more. This new concept of ride sharing will eat into the U.S. automobile market, which is about $2.5 trillion. This is close to 300 trillion yen!
This will be a gradual change, especially in the U.S. where there is pride in ownership. But if you ask millennials, you will find that they do not have as great a desire to own cars compared to older generations. Millennials are okay with ride sharing and I think that it's great.
If consumers are willing to share cars and homes, what else will they share? The Ownership Economy may never be the same.
Read my book on revitalizing Japan in the global economy, The Power to Compete. (Find it on Kobo, Amazon, Barnes & Noble, and Google Play)
Trainer, Speaker, and Writer (not an industry leader, not particularly powerful, and not a bestselling author)
9 年The idea that Airbnb, Lyft, and Uber are game changing technologies is a rather short-sighted view based on the shifting of dollars--evolutionary, but not revolutionary. There were always hotels and taxis. Rooms were always available for rental, and so were cars. The units offered may have changed due to technologies. The technologies simply made things convenient without changing anything. The cars still have 4 wheels and require a driver. The rooms they rent out at Airbnb, customers still measure their satisfaction based on the same metrics used by hotels. Pride in ownership is not particularly an American trait. Japanese love to own stuff, too. However, as certain products whose utility start to become more valuable than personal taste, I am sure people will 'borrow' more of those products. But I don't see the day coming where I will be renting someone's underwear to wear for a day, or using someone else's toothbrush when they're not using it. I won't be wearing someone's shoes, just because they have extra pairs floating around. Granted, there are now many more deals out there for 'vacation homes' that people may not have known about in the past. A better way to look at it maybe at why people are offering their own homes and cars for sharing. Many simply need the additional money. No one finds particular joy in having to share one of this or her rooms in the house with a total stranger if they didn't have the financial incentive to do so. You'll drive around strangers in Uber because you need that money. A better way to look at this issue may be that we are creating a wave of McDonald's type fast food workers through the use of technology by giving them more ways to be exploited, rather than addressing the underlying social inequities. Look no farther than Uber.
Founder Assentiri | Resident Partner Simonsen Vogt Wiig, Singapore
9 年Private property remains the cornerstone of free markets. The sharing economy is merely a situation where one party owns the asset and another is paying for using it. The only additional aspect is new technology that has enabled property owners to capitalize on assets in new ways.
Project Engineer ?? sequence pulse
9 年it may be whey not man son of chang
Ownership isn't over, but today's mobile devices easily allows for new ways of sharing assets, probably utilising them better.
President, Rural Development Initiative-RDI
9 年Dear Hiroshi Mikitani Peace be upon you. Your are very nicely wrote in Entrepreneurship Feature. God bless you. May you live long. Wishing you good luck and happy prosperous life and business. Syed Shibly Mahmood