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the shared economy: re-thinking the “american dream”

Friday, March 7th, 2014

Posted in Blog by Nick Hofer . Comments (0)

The times are changing. American’s are no longer wanting to, and in some cases, able to buy everything their hearts desire. Welcome to the shared economy where leasing, borrowing and even selling your spare time can lead to a happier existence.

“The time is right to buy,” advises billionaire finance wiz, Warren Buffet, and clearly this is a big part of the American Dream.  Buy! Buy! Buy!

To be happy and successful, you must own a home.  You must own a car…  and an expensive purse…  and a dog…  and a bike…  and some high-end power tools.

Accurate? I’m not so sure anymore.

In Suzy Orman’s 2012 book (we know she can be a bit irritating at times, but we think she’s nailed this issue on the head) The Money Class:  Learn to Create the New American Dream she announces that the historical hallmarks of the American Dream—“the home, the job security, the education, the retirement”—are dead and can no longer be relied upon for a sense of financial security.  Period.  She recommends living well below your means in order to build up cash savings that can cover your expenses for eight months in case of a job loss or similar emergency.

Problem is, that requires a lot of sacrificing and let’s face it, sacrifice isn’t all that fun and sometime it’s nearly impossible to do.  There has however been a paradigm shift in the American mindset that seems pretty cool and noteworthy to us.  And even fun. The shift from a desire to own and consume to a more elevated desire to share collectively, called the “shared economy”.

What is the shared economy?  You’re probably participating in it now and don’t even realize it.  The shared economy (a.k.a. the share economy, the shared economy, or the collaborative economy) is defined as an economic system built around the sharing of human and physical assets. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and/or organizations. These systems take a variety of forms, but all leverage information technology to empower individuals and communities at large.

The new shared economy challenges the economic and environmental sustainability of owning everything you use and instead, encourages sharing or renting things you either don’t have or just flat out don’t want to shell out the dough to purchase.

Yeah, it sounds kind of hippie-ish, but consider the fact that by 2050 there will be 9.3 billion people in the world according to the United Nations. Envision the impact if every individual felt the need to build a McMansion, purchase a Fendi Bag and drive an SUV.   Sounds a little excessive and unsustainable to us, and let’s face it, we work in marketing.

The “sharing economy” began to appear in the mid-2000s, as new business structures emerged, inspired by the access of social technology and an increasing sense of urgency around global population growth and resource depletion.  One inspiration was the tragedy of the commons, which refers to the idea that when we all act solely in our self-interest, we deplete the shared resources we need for our own quality of life.

Take your car, for example. Your car is parked almost all the time—whether at your home or office. With the amount you pay in gas, maintenance and loan payments, it’s more of a huge expensive waste. What do you get in return? You get from Point A to Point B, probably twice a day. However, most of the time, you are paying for the pleasure of letting in depreciate in the parking lot.

Peer to peer or business that offer shared assets can help by connecting everyday people with new ways to save or better yet, make money using the things they already own.

A number of ride sharing companies have sprung up like Uber, Airbrn and ZipCar to address this growing movement.  And they seem to be doing great!

Solar leasing fits beautifully into this new movement.  Sure, some people will always want to own.  We get it.  But to some, immediately lowering their electric bill, avoiding the maintenance of another household piece of equipment, and making the world a little better without any sacrifice, is just the right way to live.

Leasing solar saves the average homeowner 10-30% in the first year and thousands over the course of the lease..

That money can be used any way you want, including Orman’s eight-month emergency savings fund.  Or to take a trip, make a donation to Habitat for Humanity… It’s up to you.

There’s a huge evolving marketplace out there in the shared economy.  Some of our favorite pioneers include; SideCar and Lyft, who turn private cars into occasional taxis by helping car owner’s rent out empty seats during their trips.  Airbnb turns private homes into hotels, by helping homeowners to temporarily rent out their apartments or houses to travelers, TaskRabbit turns favors for strangers into cash by helping people with spare time rent out that time for errands and small jobs for others.  We also love Liquid, which allows people to rent bikes from neighbors and Snapgoods which connects residents with high-end household equipment rentals like cameras, kitchen appliances and musical instruments.  For dog lovers, there’s Dog Vacay, which allows traveling pet owners to board their furry friends in a loving home instead of a kennel while they’re away.  It’s cheaper and more comfortable for the pet!

Bottom line is that the historical ways people thought about wealth are dead. Thankfully, companies like ours and many other shared-economy businesses are helping people discover new ways to create their own American Dream and in a very cool, eco-conscious, low consumption way.  I love this job.