"The Sharing Economy Is Dead and We Killed It"

From Fast Company:

FIVE YEARS AGO, EVERYBODY WAS EXCITED ABOUT THE IDEA OF USING TECH TO BORROW THINGS LIKE POWER DRILLS. IN PRACTICE, THOUGH, NOT SO MUCH.

"How many of you own a power drill?" Rachel Botsman, the author of the book The Rise Of Collaborative Consumption, asked the audience at TedxSydney in 2010. Predictably, nearly everyone raised his or her hand. "That power drill will be used around 12 to 15 minutes in its entire lifetime," Botsman continued with mock exasperation. "It’s kind of ridiculous, isn’t it? Because what you need is the hole, not the drill."

After pausing for a moment as the audience chuckled, she provided the obvious solution.

"Why don’t you rent the drill? Or rent out your own drill to other people and make some money from it?"

Back then, this version of what Botsman called collaborative consumption, or what would become better known as "the sharing economy," seemed like a warm and fuzzy inevitability. American consumerism had been tamped by one of the worst recessions in history, concerns about the environment were growing, and new online networks provided a connective thread that could help us get by on less by sharing things with our neighbors. "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 a way that has never been possible before," Botsman explained, and these new systems allowed us "to engage in a humanness that got lost along the way." We were now, she said, experiencing "a seismic shift from individual getting and spending towards a rediscovery of collective good."

Already there were a bevy of startups with dreams of facilitating the community-shared power drill. Ecomodo had launched in 2007; Crowd Rent, Share Some Sugar, and NeighborGoods in 2009; Thingloop, OhSoWe, and SnapGoods in 2010.

The media loved the idea. Entrepreneur magazine named NeighborGoods one of its 100 most brilliant companies of 2011, and it’s hard to find a publication that covers technology that did not mention the idea of sharing the power drill. Many of them cited the example directly: Time magazine explained that "renting a power drill via SnapGoods for the one day you need it is a lot cheaper than buying it." The Guardian, when introducing NeighborGoods, said that the idea made sense "with the average power drill used only about 12 minutes per year." The New York Daily News told New Yorkers they could "save countless ways by borrowing items, like a power drill, from neighbors." And Wired asked, "If I can avoid buying an electric drill for that one job, or some temporary dinner-party chairs, or a car I will drive maybe a couple of times a month—well, why wouldn’t I rent them from you?"

Even companies that weren't renting power drills proselytized the theory. "There are 80 million power drills in America that are used an average of 13 minutes," Airbnb CEO Brian Chesky told the New York Times in a 2013 column about the sharing economy. "Does everyone really need their own drill?"

There was just one problem. As Adam Berk, the founder of Neighborrow, puts it: "Everything made sense except that nobody gives a shit. They go buy [a drill]. Or they just bang a screwdriver through the wall." 

Of the eight sites listed above, only NeighborGoods is still around—after it ran through its seed funding, it was salvaged by an investor with a personal interest in the idea. About 42,000 people have signed up, though fewer than 10,000 are active. While sites like Airbnb and Uber became giant companies, the platform on which we would share our power drills with neighbors never took off.

Instead of platforms that would inspire human interaction and create less waste, what emerged were companies that awkwardly fit into—and at times completely twisted—this vision of neighborhood sharing. The "sharing economy" grew to include an odd menagerie of companies with little in common. Groupon "shared" the collective action of tipping a deal. Kickstarter "shared" a similar funding goal among many contributors. Sites like Airbnb "shared" homes, but charged by the night, like a hotel. Gig economy platforms like Uber and Handy "shared" the labor of independent contractors paid by the hour or mile. Netflix somehow even managed to fall under the sharing economy umbrella at one point.

Though a few pieces of the original "sharing economy" promise survived, like peer-to-peer car-sharing services RelayRides and Getaround and bike-sharing site Spinlister, today they are largely divorced from the concept of a global village. Somehow, when a major hotel chain forms a partnership with a $50 billion company, it is able to pass the move off as joining the "sharing economy."...MUCH MORE