You don’t own a drill that sits unused 99,9% of the time, you have a little drone bring you one for an hour for like two dollars.
Just a quick note; people have been predicting exactally this for about 10-15 years because of the internet, and it hasn’t happened yet. The “people will rent a hammer instead of buying it” idea was supposed to be the ur-example of the new sharing economy, but it never actually materialized, while instead uber and airB&B and other stuff did. We can speculate about why it didn’t happen, but IMHO, it wasn’t primarily transport costs.
I think most people would just rather buy tools and keep them around, or perhaps that the cognitive costs of trying to figure out when you should buy a 20 dollar tool vs renting it for 5 dollars are just not worth the effort of calculating for most people, something like that.
This already exists for rich people: If you have a lot of money, you pay for your doctor’s cab and have her come to your mansion. But with transport prices dropping sharply, this reaches the mass market.
Hmm, I donno if it’ll be cost competitive. If you’re a barber, and people come to your shop, maybe you can cut the hair of 10 people in a day. If you have 30-45 minutes of commute time between one person and the next, maybe you can only get 5. And even that’s going to be hard; if you have scheduled appointments to show up at 5 different people’s homes in one day, and then one of your hair cuts runs long or you hit traffic, suddenly you are late for all of the rest of them that day, and maybe you have to cancel your last one and someone who was sitting at home waiting for a haircut doesn’t get one.
There could be a business model here, especially if the service sector continues to expand and diversify as automation eats other non-service jobs, but I think it’ll remain a premium service, much more expensive then going to a barber shop or a doctor’s office or whatever.
I think most people would just rather buy tools and keep them around, or perhaps that the cognitive costs of trying to figure out when you should buy a 20 dollar tool vs renting it for 5 dollars are just not worth the effort of calculating for most people, something like that.
If a 20 dollar tool that costs 5 dollars to rent that’s not worthwhile. It has to get much cheaper and if you would have delievery within a 30 minute window for 50 cent instead of 5 dollar that would change the usage patterns.
Are there real businesses that tried the model and that had other issues than simply being to expensive?
Yeah, a number of businesses tried it between 2007 and 2010. SnapGoods was probably the best known. This article lists 8; 7 went out of business, and the 8th one is just limping along with only about 10,000 people signed up for it. (And that one, NeighborGoods, only survived after removing the option to rent something.)
There just wasn’t a consumer base interested in the idea, basically. Silicon valley loved to talk about it, people loved writing articles about it, but it turns out that nobody could get consumers interested in the service.
From that article, which quotes the person who tried to found one of those companies
There was just one problem. As Adam Berk, the founder of Neighborrow, puts it: “Everything made sense except that nobody gives a shit. They go buy [a drill]. Or they just bang a screwdriver through the wall.”
When it comes to people doing car-sharing, it doesn’t well between private person and it seems like the Uber model won out.
On the same token a company that’s more like Uber and that has much lower transaction costs due to self driving cars has a higher chance of success.
Timing is very important when it comes to startups. Where webvan failed, instantcart does much better.
Sure, that’s very possible. Just because it didn’t work last time doesn’t mean it can’t work now with better technology.
I think anyone who goes into it now, though, had better have a really detailed explanation for why consumer interest was so low last time, despite all the attention and publicity the “sharing economy” got in the popular press, and a plan to quickly get a significant customer base this time around. Something like this can’t work economically without scale, and I’m just not sure if the consumer interest exists.
You make excellent points. I hadn’t even heard of SnapGoods, NeighborGoods etc.
I’m imagining it not as a peer to peer service, but more along the lines of a car rental company that owns a fleet of things it rents out.
I think you’re right about the need to build a significant customer base rather quickly. My guess is that it might be feasible to first offer big expensive things that people don’t usually own already, like a fancy jacuzzi, a top end VR rig, a complete “wedding size” soundsystem and a bouncy castle. And once you’re known for those, work your way down into more normal consumer goods, guided by the requests of your first customers.
Just a quick note; people have been predicting exactally this for about 10-15 years because of the internet, and it hasn’t happened yet. The “people will rent a hammer instead of buying it” idea was supposed to be the ur-example of the new sharing economy, but it never actually materialized, while instead uber and airB&B and other stuff did. We can speculate about why it didn’t happen, but IMHO, it wasn’t primarily transport costs.
I think most people would just rather buy tools and keep them around, or perhaps that the cognitive costs of trying to figure out when you should buy a 20 dollar tool vs renting it for 5 dollars are just not worth the effort of calculating for most people, something like that.
Hmm, I donno if it’ll be cost competitive. If you’re a barber, and people come to your shop, maybe you can cut the hair of 10 people in a day. If you have 30-45 minutes of commute time between one person and the next, maybe you can only get 5. And even that’s going to be hard; if you have scheduled appointments to show up at 5 different people’s homes in one day, and then one of your hair cuts runs long or you hit traffic, suddenly you are late for all of the rest of them that day, and maybe you have to cancel your last one and someone who was sitting at home waiting for a haircut doesn’t get one.
There could be a business model here, especially if the service sector continues to expand and diversify as automation eats other non-service jobs, but I think it’ll remain a premium service, much more expensive then going to a barber shop or a doctor’s office or whatever.
If a 20 dollar tool that costs 5 dollars to rent that’s not worthwhile. It has to get much cheaper and if you would have delievery within a 30 minute window for 50 cent instead of 5 dollar that would change the usage patterns.
Are there real businesses that tried the model and that had other issues than simply being to expensive?
Yeah, a number of businesses tried it between 2007 and 2010. SnapGoods was probably the best known. This article lists 8; 7 went out of business, and the 8th one is just limping along with only about 10,000 people signed up for it. (And that one, NeighborGoods, only survived after removing the option to rent something.)
https://www.fastcompany.com/3050775/the-sharing-economy-is-dead-and-we-killed-it
There just wasn’t a consumer base interested in the idea, basically. Silicon valley loved to talk about it, people loved writing articles about it, but it turns out that nobody could get consumers interested in the service.
From that article, which quotes the person who tried to found one of those companies
When it comes to people doing car-sharing, it doesn’t well between private person and it seems like the Uber model won out.
On the same token a company that’s more like Uber and that has much lower transaction costs due to self driving cars has a higher chance of success. Timing is very important when it comes to startups. Where webvan failed, instantcart does much better.
Sure, that’s very possible. Just because it didn’t work last time doesn’t mean it can’t work now with better technology.
I think anyone who goes into it now, though, had better have a really detailed explanation for why consumer interest was so low last time, despite all the attention and publicity the “sharing economy” got in the popular press, and a plan to quickly get a significant customer base this time around. Something like this can’t work economically without scale, and I’m just not sure if the consumer interest exists.
You make excellent points. I hadn’t even heard of SnapGoods, NeighborGoods etc.
I’m imagining it not as a peer to peer service, but more along the lines of a car rental company that owns a fleet of things it rents out.
I think you’re right about the need to build a significant customer base rather quickly. My guess is that it might be feasible to first offer big expensive things that people don’t usually own already, like a fancy jacuzzi, a top end VR rig, a complete “wedding size” soundsystem and a bouncy castle. And once you’re known for those, work your way down into more normal consumer goods, guided by the requests of your first customers.
The items that Bauhaus currently rents out might be a decent starting list: https://www.bauhaus.info/service/leistungen/leihservice?show=All