Topic 1 First Grasp at Collaborative Consumption

1 Plurality of terms

Collaborative economy, sharing economy, collaborative consumption and on-demand economy are a number of terms which are more and more commonly used in our society.

This plurality of terms intends to address the same new phenomenon: the emergence of a form of economy based on peer collaboration and the maximisation of the use of idle assets through reinvented market behaviours.

To understand in more details the nuances of each approach, the table on the next slide offers a definition and an example for each.

However, these terms are frequently used interchangeably. While each concept might present different specificities, their features and objectives are overlapping. Thus, these approaches are and will often be integrated in our use of the term collaborative consumption which we will define throughout this first unit.

Terminologies

Definition

Example

Logo

Collaborative economy

An economic system of decentralized networks and marketplaces that unlocks the value of underused assets by matching needs and haves, in ways that bypass traditional middlemen.

Etsy – Online peer-to-peer craft marketplaces that matches makers of goods directly with buyers

Sharing economy

An economic system based on sharing underused assets or services, for free or for a fee, directly from individuals.

Airbnb – Online platform matching people who have a place or space to rent  with people looking for a place to stay

Collaborative consumption

The reinvention of traditional market behaviours — renting, lending, swapping, sharing, bartering, gifting — through technology, taking place in ways and on a scale not possible before the internet.

Zopa – Peer-to-peer lending company connecting lenders and borrowers to deal directly with one another, avoiding the banks acting as middlemen

On-demand economy

Platforms that directly match customer needs with providers to immediately deliver goods and services

Deskbeers – Beer retailer that makes office deliveries


2. Let’s share a beer!

To get a first grasp on the concept of CC, let’s start with a real life situation as an example.

Two friends are in a bar and want to drink beer but they do not want an entire pitcher of beer and they also do not want to pay the inflated price of buying beer by the glass. They might then persuade a couple at another table to split a pitcher of beer with them. That way, the cost and the beer are divided between the two tables. This type of agreement involves collaborative consumption as the acquisition and the distribution of the resource/product are conjointly organized for a fee or other compensation.

Source: https://unsplash.com/s/photos/beer? tm_source=unsplash&utm_medium=referral&utm_content=creditCopyText

3. A First Definition

While the example brings to light the CC rationale, there is no agreement in the literature as to an unequivocal definition of CC. It is then interesting to start by understanding how CC differentiate from conventional consumption.

While in the conventional consumption model, an individual pays the total cost of a good or service to own it in an exclusive way, the collaborative consumption model opens up the access of the good or service to multiple people who share the cost. In simple terms, owners of resources make these available to other individuals. More formally, CC is often defined generically as an economic model in which products and services are shared, swapped, traded or rented, enabling then access over ownership. The emergence of the CC illustrates then how traditional market behaviours are reinvented.

However, an more detailed analysis of the CC concept is necessary to understand its additional characteristics distinguishing it from traditional models.