Thanks to the fast-growing sharing economy, anyone can make money renting out his home or car — or by becoming a personal chef.
Just ask Time magazine columnist Joel Stein. He decided to give the sharing economy a try, then wrote about his experience. The explosion of new social apps and services powering this new consumer landscape gave him the opportunity to run a few of his own DIY businesses. He rented out his Mini Cooper, drove people around in it a la Lyft and cooked for strangers.
'Sharing' As A Misnomer
A recent survey from PricewaterhouseCoopers shows that the sharing economy is growing faster than ever, led by Airbnb and Uber. And those who participate feel it is more personal and convenient.
Of the 44 percent of U.S. adults who are familiar with the sharing economy, 86 percent say it makes life more affordable, 83 percent say it makes life more convenient and efficient and 78 percent say it builds a stronger community.
A lot of companies prefer the term "on demand" economy, Stein tells NPR's Robert Siegel. What's really happening, Stein says, is "people wanting things as soon as they can get them by pressing a button on their phone."
Part of what's transforming our consumption habits is that we have a different relationship to property because things are more accessible and less valuable, Stein says. So we're spending more money on experiences. According to the PricewaterhouseCoopers report, 43 percent of consumers say that "owning today feels like a burden."
Stein lost money when it came to running his own restaurant but found driving others and charging $35 a day to rent out his car profitable.
The Human Element
Stein used RelayRides — an Avis or Hertz of car-sharing — to rent out his Mini Cooper. He found that renters picked up his car from his house and often went the extra step to fill up the gas tank.
Still, there are downsides of becoming your own small business. One Sicilian customer asked what the R, D and N meant on his stick shift — a clue that he would later get a call from her telling him she'd had an accident. But RelayRides' insurance handled it "amazingly," Stein says, and covered the damage.
A large part of what makes this collaborative consumption work is getting strangers to trust strangers. Sites like eBay were testing grounds when it came to building a level of trust in online peer-to-peer transactions. Several people who used to work for eBay now work in the sharing economy, Stein says, which adopted the model of getting the user and the provider to rate each other. It reduces the number of bad actors and promotes trust among strangers, otherwise built by the reputation of a brand name of a big business.
"If you want a more personal experience, or in most cases, a cheaper experience, you take a little more risk with an Airbnb, but you get a less generic experience than you do at a big-name hotel," Stein says.
And these companies are on the market value scale of large corporations, like Delta Airlines and Hilton Worldwide. PricewaterhouseCoopers projects that by 2025, global revenues from sharing economy companies will soar to an estimated $335 billion, from about $15 billion today.
A Sharing Economy Horror Story
It may be a more personal experience, but it's still a business transaction. So what happens when something goes wrong in the peer-to-peer setting? In a darker story of Airbnb experiences, the host died while the guest was staying in her apartment. Jordan Ruttenberg's story comes to us from independent producer Mickey Capper.
Ruttenberg, a student at Wesleyan University, relocated to Brooklyn for a summer job with his friend Connor. They booked a place through Airbnb. His host, whom they met once via Skype, was in California at the time. Midstay, Connor noticed messages on their host's Facebook wall in the tone of: "You have to pull out of this" or "We need you."
After reaching out to a friend of the host, he learned she had overdosed and been pulled off life support. His arrangement turned eerie, as he continued to stay in this woman's apartment, with all her personal belongings and photographs.
Ultimately, the host's brother contacted Ruttenberg, asking when his checkout date was, assuming the procedural manner of a business arrangement.
"I recognize the tragedy in it," Ruttenberg says, "but our relationship with her was a logistical one. And so, her death for us was largely of a logistical nature."
Ruttenberg says he would still use Airbnb for short-term stays.
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Transcript
ROBERT SIEGEL, HOST:
They call it, imprecisely, the sharing economy. Renting out your home, becoming a part-time cab driver or personal chef or renting out your car - turning your personal property into the assets of a small business. In a moment, we'll have the story of an arrangement like that that took a dark turn. But first, we're joined by Time Magazine columnist Joel Stein. He rented out his Mini Cooper to others; he also drove people around in it; he cooked for strangers, all for a price. And all is part of his reporting on this shifting economy. Joel Stein, welcome to the program.
JOEL STEIN: Thank you for having me.
SIEGEL: First, how much money did Joel Stein Inc. make? Was this a profitable venture?
STEIN: I definitely lost money cooking for other people. Running a restaurant is tough. I made money driving people. That wasn't bad. I think I made like a hundred bucks that night. Renting out my car was pretty profitable. I charged people like 35 bucks a day for that.
SIEGEL: Now, you were doing this, in part, as an experiment, but how big is this, what we call, the sharing economy?
STEIN: It's really big and growing so fast that it's hard to measure. Most of that money is coming from Airbnb and Uber, but the other companies are growing pretty quickly as well.
SIEGEL: You used a company called RelayRides, for example.
STEIN: Yeah, so I was like Avis or Hertz. People rented my convertible, yellow Mini Cooper. And they picked it up at my house 'cause I wasn't willing to take it to an airport. And they returned it, often filling up my gas, which I didn't ask even for.
SIEGEL: But there also was a downside. Somebody brought it back with a dent.
STEIN: Yeah, so someone came to pick up my car. It was a very attractive woman from Sicily with a very thick accent, and it was very exciting. She asked me what the R and the N and the D meant on stick. And I should have known right then and there that this was not a good call. But later that night, I got a call from her. She knew very few words in English, but one of them was accident.
SIEGEL: (Laughter).
STEIN: And so she eventually put me on the phone with a woman she hit with my car, who was very upset. But it turned out it wasn't that big of a dent, and the RelayRide's insurance people handled it really amazingly.
SIEGEL: They covered you.
STEIN: They covered me, and I'm assuming they're not listening to this - I don't know why, of course they are - but they covered me. And I think I got maybe an old dent fixed as well. Should I admit that right here? I don't know if I can.
SIEGEL: You just did.
STEIN: I shouldn't have; you're good - my God.
SIEGEL: There could be some volunteer private detective or some - you know, somebody who's sharing his services with the local police who will come and...
STEIN: I think so.
SIEGEL: ...And visit you now.
STEIN: That's probably a new sharing economy company.
SIEGEL: Sharing strikes me as a misnomer here.
STEIN: Yeah 'cause I charged people.
SIEGEL: You charged people.
STEIN: Yeah.
SIEGEL: Yeah, this - we could call this a renting economy instead.
STEIN: Yeah, people do that. A lot of the companies prefer on demand economy 'cause really a lot of what's going on is people wanting things as soon as they can get them by pressing a button on their phone.
SIEGEL: It occurred to me at first that this isn't essentially about technology. It's really about people's relationship to property. But you make a case, in your piece in Time, that this entire economy depends very much on social media and on the social side, not just the media side.
STEIN: Yeah, there's a trust issue. Basically, a lot of the people in the sharing economy used to work for eBay, and they created these trust divisions. And one of the things a share economy does is they have you, as the user, rate the person who, you know, gave you the ride, but you as the driver also rate the person who took the ride. So basically, if you can get rid of the bad actors, which is a very small percentage, people can go back to really trusting each other, even if they don't know each other. So you get much more of what you once had in a small town or village where you know each other enough or have enough of a reputation to trust each other.
SIEGEL: But that's - that is a trust that we used to associate with a brand.
STEIN: Yes.
SIEGEL: That is - I used to know that if it was a Howard Johnson's, I could count on a certain level of food. So in a way, we've redefined brand as well here.
STEIN: Yeah. And if you're looking for something different or you want a more personal experience or, in most cases, a cheaper experience, you take a little more risk with an Airbnb, but you get a less generic experience than you do at, say, a Westin, as much as I like Westins. I don't know why I felt the need to not anger Westin after angering my insurance company. I fear Westin, apparently.
SIEGEL: Well, Joel Stein, a columnist for Time Magazine, as they say, thanks for sharing with us.
STEIN: All right, I'll have you over for dinner soon.
AUDIE CORNISH, HOST:
Doing business with your personal stuff can blur the usual lines between business and personal.
JORDAN RUTTENBERG: My name is Jordan Ruttenberg, and I'm a student at Wesleyan University. So I found a job in New York through my friend, and we decided to spend the summer working together and living together in Brooklyn.
CORNISH: Jordan Ruttenberg has an odd tale of the sharing economy. He rented a place in New York last summer through Airbnb. Ruttenberg's host was in California during his stay in her apartment. They never met in person, but he still found himself drawn into her life.
RUTTENBERG: So we just followed basic Airbnb protocol - reached out to her first. She told us that she wanted to Skype before she agreed to let us have the place. She poked around in the hallway a little bit, showed us where the laundry room would be - carrying a computer all the way. It definitely looked a lot bigger (laughter) on the Skype tour of the apartment. It ended up being pretty small. But yeah, it was nice.
(SOUNDBITE OF MUSIC)
RUTTENBERG: The entire interior was sort of painted in this forest green. The living room is on the far side of the apartment. That's where the couch was that Connor slept on. And then separated by a wall over was the bedroom where I slept. People always had questions about, you know, whose stuff is this? Whose picture is this on the fridge? And I had to explain that this is somebody else's place.
(SOUNDBITE OF MUSIC)
RUTTENBERG: One afternoon in mid-July, we were sitting in the living room, just enjoying the air-conditioning blowing down on us and Connor noticed on Facebook there were some odd messages appearing on her wall. People saying things like you have to pull out of this; we need you; we love you. And I texted her how are you doing? Is everything all right? And I didn't get any response. I decided to reach out to her friend. And he responded that she had overdosed. She had been pulled off life support a few hours previously. He didn't want to talk about it anymore. He was grieving.
(SOUNDBITE OF MUSIC)
RUTTENBERG: Well, the apartment immediately became an eerie, uncomfortable place to be. I mean, all of her decorations, all of her clothes are still there. Her pictures are still up on the fridge of her and her friends and her family smiling in her grandfather's arms. It's a very strange feeling to be living in somebody else's tragedy.
(SOUNDBITE OF CELLPHONE)
RUTTENBERG: Following her passing, I got a call from her brother. He was immediately down to business about, you know, when is your checkout date. I mean, I suppose that was just his way of dealing with it. I recognize the tragedy in it, but our relationship with her was a logistical one. And so her death for us was largely of a logistical nature. I think for short-term stays, I would still use Airbnb.
CORNISH: Jordan Ruttenberg - his story came to us from independent producer Mickey Capper.
SIEGEL: We asked Airbnb about this story, and they wrote to us. And I quote now - "over 35 million guests have had positive experiences on Airbnb. We respect the privacy of our hosts and guests and don't comment on the specifics of questions like these." Well, we want to know what you would like to be able to share or rent online, or do you have your own sharing economy story? Tweet to us @npralltech or Facebook us at NPR-ATC. Transcript provided by NPR, Copyright NPR.
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