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The sharing economy

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Articles - June 2013
Tuesday, May 28, 2013
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The sharing economy
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0613 TheSharingEconomy 03
Carsharing services capitalize on the 22 hours per day the average car sits idl. In Portland, more than 1,100 vehicles are up for short-term rental.
// Photo by Craig Mitchelldyer

On a humid evening in early spring, Portland resident Kat West maneuvers a broadfork out the door of the Southeast Portland Tool Library on Southeast Harrison Street. She’s planning to plant a garden on a plot of land she recently purchased, and she needs a way to till the soil. “This sucker costs $200,” she says. “I don’t have that kind of money right now. Coming here and being able to borrow this as needed is invaluable.”

The sharing economy has a foothold in many parts of the country. But progressive, community-minded coastal cities like San Francisco, New York, Seattle — and Portland — have embraced it the most. Hyperlocal sharing networks all across Portland facilitate the trade of everything from preserving equipment (North Portland Preserve and Serve) to baby clothes (St. Johns Swapnplay) to garden space (Farm My Yard) or fruits and vegetables (Portland Fruit Tree Project).

Located in a large storage closet in an Episcopal church, the Southeast Portland Tool Library offers its 2,000 members access to 1,200 donated tools completely free of charge. Upstairs in the same building, Kitchen Share SE runs a similar operation for food-related accoutrements like dehydrators and ice cream makers.

“The sharing economy is a recognition that we can use our existing stuff more efficiently than we currently are,” says Arnold Strong, CEO of the Portland startup Bright Neighbor. An online marketplace launched in 2009 to facilitate the renting, selling, lending and bartering of consumer goods and services, Bright Neighbor had 8,000 regular users across Portland’s 95 neighborhoods by the summer of 2012. Formerly housed on a website, Bright Neighbor has taken a brief hiatus to migrate to a mobile app that will relaunch this June.

“With the number of people accessing the web through mobile devices, it’s a no-brainer we’ve got to be a completely mobile application,” Strong says.

While Portland has a cultural predisposition for sharing, its livability has actually hindered the development of its sharing economy. In places like San Francisco and New York, where parking is impossible, hotels can be prohibitively expensive, and city dwellers don’t have space for extra stuff, collaborative consumption makes certain things doable and desirable that would not be otherwise.

In the Rose City, however, sharing-economy supply is a lot higher than demand, according to Steve Gutmann, business development manager for Getaround in Portland and an avid participant in Brook’s early car-share program. While 550 car owners are eager to lend out their vehicles on the service, the number of takers does not yet match. Gutmann is currently working to grow the user base, he says.

“The number of people who are choosing a low-car lifestyle is growing,” he says, “but it’s growing slowly.” In addition to Getaround, Gutmann is working on a number of other transportation and sharing services. He helped a friend launch Nimbler SF, an app for navigating San Francisco by bike and transit, and is part of a team developing both a peer-to-peer driveway-rental app called SpotPark and an app that connects buyers and sellers of stand-up paddleboard gear: GO SUP GEAR.

Matching supply and demand is just one of the challenges facing the sharing economy, however. Figuring out how the business model will relate to existing legal and insurance systems is another. Airbnb first addressed the question of liability in 2011 after a renter in San Francisco returned home to find her apartment ransacked. The room-sharing service began offering a $50,000 guarantee for loss or damage due to theft or vandalism, a limit it increased to $1 million last year.

Because current legal, insurance and regulatory infrastructures are designed to handle transactions between consumers and companies, not consumers and their peers, the sharing economy faces obstacles on a number of fronts.

While the legislatures of three states — Oregon, Washington and California — have adopted bills that account for personal car sharing, insurance structures have not caught up in other states or for other types of rental properties. Hence, to protect users, most peer-to-peer rental sites offer their own insurance policies. Getaround matches both the owner’s and renter’s personal auto insurance limits up to $1 million, and SnapGoods guarantees damaged goods will be repaired or replaced up to $5,000.

Industry regulations represent another roadblock. Sharing participants sometimes face complications because they offer the same services as companies in highly supervised industries, yet they are not subject to the same rules. Unlike traditional hotels, Airbnb hosts do not pay hotel taxes, obtain licenses, undergo inspections or have to meet safety requirements.

Sharing businesses have also had to figure out how to build trust among users, an essential component for their businesses’ functioning. Most websites offer a two-way rating system that allows both owners and renters to review each transaction, building for each an online track record others can check out. Some also link their services to social media sites like Facebook, Twitter and LinkedIn to provide even more information. Except for a few situations, the accountability tool has worked remarkably well.

Portland residents Milos and Tijana Jovanovic, who rent out the downstairs level of their Dutch Colonial duplex for $110 to $130 a night, have found their renters to be a self-selecting group. They’ve had no problems with any guests during their two years in business.

“People who stay in this type of accommodation are mellow and cool and enjoy these types of settings,” Milos says one afternoon in the bright, airy living room of the rental. “The type of person who wants to do this is the right type.”



 

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Guest
0 #1 Jeff GGuest 2013-06-11 06:18:04
Thanks for this information! This is really interesting. I had no idea any of these services existed. I'll definitely be looking into this. Great article!
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