The Sharing Economy

Glenn Fleishman, in his first cover story for The Economist, tracks how technology is making it easier to share everything from bicycles to basement bedrooms—for a price.

Such peer-to-peer rental schemes provide handy extra income for owners and can be less costly and more convenient for borrowers. Occasional renting is cheaper than buying something outright or renting from a traditional provider such as a hotel or car-rental firm. The internet makes it cheaper and easier than ever to aggregate supply and demand. Smartphones with maps and satellite positioning can find a nearby room to rent or car to borrow. Online social networks and recommendation systems help establish trust; internet payment systems can handle the billing. All this lets millions of total strangers rent things to each other. The result is known variously as “collaborative consumption”, the “asset-light lifestyle”, the “collaborative economy”, “peer economy”, “access economy” or “sharing economy”.

The flies in the ointment: insurance, liability, and laws that favor incumbent industries.

• [Josh Troop]

  When it comes to sharing a car, insurance liability is less like a fly and more like a hippopotamus

  • [Eric0142]

    From the NY Times last year: “Fatal Collision Makes Car-Sharing Worries No Longer Theoretical”

    http://www.nytimes.com/2012/04/14/your-money/relayrides-accident-raises-questions-on-liabilities-of-car-sharing.html?pagewanted=all&_r=0

    Anything changed?

    • [Glenn Fleishman]

      Three states have passed laws that clarify it (Washington, Oregon, and California). Some insurers have changed policy terms to clarify. It seems like it could still be a gray area, but no other incidents have come up to test the matter, and the incident you state is still, to my knowledge, unsettled.