The Mental Shift in the Collaboration Economy and Why it Matters to Everyone

I am a strong believer in the increasing strength of the collaboration economy where we share things and resources rather than own them or use commercial options.

On a personal basis we no longer have a second car. I use Flexicar here in Australia to get a car when I need it. This reduces our costs of car ownership, reduces the resources we use, and reduces the parking pressure on crowded streets in our neighbourhood. In addition I have used airbnnb quite a bit for travel, staying in other people’s homes and apartments at a lower cost but also for an improved experience.

There are two points that are interesting to me about how this might change the nature of how we make decisions and act together.

The first is that in the car sharing example it changes the decision point on costs. You no longer have the big decision to make on a major capital expenditure, but the main thing is that the cost gets transferred from a distant, annualised cost and is applied to the decision to do something at the time of making it. For example I am doing gym rehab for a broken leg and dislocated ankle that I suffered last year by being hit by a car while triathlon training. Previously I went to a YMCA gym around the corner but as that is closed for refurbishment I have to drive to another YMCA gym. Our first car is mostly unavailable during the week as my partner has to use it to get to work. Therefore every time I go to the gym in the share car it costs me $19.90 including petrol. Whilst previously I would just jump in the car and go, now I think about the cost every time I make a decision to go or not. Previously I was happy to have the second car sitting around most of the time at a cost of about $200 a week. Now I baulk at spending 10% of that to go to the gym. I still go because it is important to my health but moving the cost to the point of making that decision really makes me think about the value. The arrangement has certainly got me walking, cycling, and using public transport more which is a great thing.

The reason I am writing this post is that it got me thinking about the nature of decision making and value. If the collaboration economy grows it means more and more decisions are made at the point where we decide if they are valuable or not. That combined with increasing transparency and social media recommendation systems mean real value becomes even more important.

The second aspect of the collaboration economy is a longer term one. Systems like GetAround which supply technology for your car so you can rent it out to your social network are building user groups based on social interactions. As numbers grow these groups are going to become more powerful in our economy and move beyond just car sharing. They will put relentless pressure on prices for all sorts of things including tyres, petrol and insurance. Beyond that why will they stop at motor vehicle related products? For instance they provide a massive group that can decide to support a charity and make a huge difference to the mission of that charity. Due to their social nature they are likely to vote on what to support so true value and results will become far more important in the not for profit sector. I see these sorts of groups as the next generation beyond the current group buying sites like Living Social and Groupon. The key differences will be that they will be driven by the user base and their social nature rather than the core company. Therefore value and purpose will be more important to them. This will be a fundamental shift.

I would be interested in what people think. Meanwhile I am off to rehab in my share car

Paul Higgins

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