It’s the sharing economy: great reasons to stop buying and start borrowing
We’ve all heard of the term “sharing economy”, and many of us have taken part, whether by getting a ride on Uber or Careem, or maybe renting a place to stay using Airbnb. But now there’s another way you can get involved: by borrowing things from your neighbours.
You may wonder why you would want to borrow second hand stuff from someone you barely know, but that was what they said about Airbnb — “Who would sleep in a stranger’s house? They’d be crazy!” And look at how popular the concept has become. Why? Because people can see the benefits.
So when you stop to think about it, maybe it actually makes a whole lot of sense. Let’s run through the top 5 reasons — the real benefits — to borrowing rather than buying:
1. It’s more convenient
The modern economy is all about convenience, whatever we can do to save time or energy. Think of Deliveroo, which has dramatically expanded the number of restaurants you can get deliveries from, or TaskRabbit which is an easy, simple way for you to get things done around the house, from heavy lifting to home improvement.
The same goes for borrowing things. Instead of heading to the store, perhaps a distance away, navigating traffic, imagine searching your local community and finding the thing you need is only around the corner? It’s a lot more convenient to borrow from the family upstairs than to buy it from the store across town.
This becomes all the more true when you only need something for a short time. Lost your charger? Borrow one. Easy. Want to try a new recipe and need a wok? Borrow one. Simple. Have friends or family coming to stay and need an extra bed? Borrow one and rest easy.
2. It’s cheaper
This goes without saying (almost) but you can save money when you borrow instead of buy. For many people this can be an important factor, helping them to save for the future without having to compromise on the present.
Just think of baby products. Parents spend millions every year purchasing a plethora of things for their newborns or toddlers or young children. In fact, the average middle income family spends $12,000 on their baby in the first year. And how long does the child need all those things bought for it? Often, not very long. Sometimes as short as a few weeks (they grow up so fast!)
The result is that many families have lots of baby or children’s products that have barely been used. So why not share the burden as a community? By lending and borrowing many new families could save significant sums at a time when they’re seeing expenses escalate.
3. Pay exactly for what you use
According to a report by Bank of America, over 80% of household items only get used once a month. There is something odd about buying something that will end up spending over 90% of its lifetime in a cupboard or in the garage. It’s not exactly extracting the most value, is it? But that’s what we do with hundreds of objects and purchases every year.
Take the humble garden leaf blower. It only really gets its time in the sun a few hours for a few weeks a year. The rest of the time it just takes up space. Or that barbecue set you have. It gets wheeled out a few weekends in the summer, but otherwise it’s in hibernation waiting for its next performance.
But by borrowing instead of buying, you can come a lot closer to paying exactly for how much you are using something. No longer do we have to pay upfront the full value of an item and hope to it earn back over time in gardens cleared or friends and family fed, just to never come close because we use them so rarely. Finally, we can, like so many other things (water, electricity, mobile data), pay for exactly what we have used.
4. It’s good for the environment
It’s incredible — and often unknown — how much energy, water, and other natural resources go into making common, everyday objects.
Let’s take water. It requires over 2,500 litres of this life-saving liquid to make one cotton t-shirt. It takes at least twice as much water to make the plastic for a bottle of water as the amount of water contained in it.
Scale this up for everything we own, build in the energy use, waste, carbon dioxide, and other pollutants created, multiply by 7 billion people, and we start to understand the size of our impact on the environment when we buy things that for the most part we rarely use.
If we could start to borrow instead of buy, it would have significant benefits for the environment without us having to sacrifice anything, as we still get to use that [insert rarely used item] when we need it. Amazing!
5. The situation calls for it (check out our other blog post for more on this)
Sometimes the context is important, and it would be better to borrow than buy. For example, we only need to use the item once — why would we buy it? Or maybe we want to try something before we commit to purchasing it, perhaps test out a few brands — why would we buy straightaway? Or we need it right now, but we don’t have the cash — what other option do we have?
Here is our favourite situation: you want to do something that requires a bunch of things you don’t have — why would you spend all that money for a one-off experience? By bundling a few items together to borrow, you can have an adventure or make a memory you might not otherwise have had.
Want to make that film? Borrow all the equipment that you couldn’t have afforded to buy or rent from the studios. Want to host a special garden party? Borrow the tables, chairs, lights, music system, wine coolers, gazebo, and small stage that would otherwise have cost a fortune.
When all is said and done, we all have our own motives and priorities. The great thing about the world we live in today is that we also have more options and opportunities than ever before, including borrowing things rather than buying. That’s not just a new world, but a new type of economy we live in. So if borrowing is a choice we want to make, there are lots of good reasons to do so!
Sources:
‘Primer On The “Global Sharing Economy” In 20 Charts’, Zero Hedge, 2017 (summary of Bank of America report)
‘Hopping Aboard the Sharing Economy’, BCG, 2017
‘The Sharing Economy’, PwC, 2015
‘The hidden water in everyday products’, Water Calculator, 2017
