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The shareable economy: Don’t let the perfect be the enemy of the good
Last fall at the Shareable Cities Summit in Portland a panelist from Getaround, the car sharing service, made the astounding statement that car sharing had the potential to reduce the number of cars on the road by an order of magnitude–for the math-impaired that means 90 percent.
What makes this seemingly fantastical development possible is the fact the cars sit parked 95 percent of the time according to Donald Shoup, a UCLA professor of urban planning who has made a specialty of researching parking. (This fact has had a huge impact on the urban landscape. But that’s a subject for another time.)
The received wisdom is that we are heading toward 2 billion vehicles on the road in the next 20 years, a doubling of today’s 1 billion. This is put down primarily to auto demand in India and China. I’ve doubted this wisdom from the start because of obvious constraints on the liquid fuel supply. But virtually no one in policymaking circles believes that vehicle numbers are headed downward, let alone dramatically downward.
I mentioned car sharing in a recent piece and was criticized for advocating car use which was called “unsustainable.” But sustainability is keenly sensitive to scale. A world with, say, 100 million cars is clearly more sustainable than one with 1 billion or 2 billion cars. And, while we cannot hope to create a perfect world from the one we have, we do have responses that can make significant strides toward a better one. Hence, my admonition not to let the perfect be the enemy of the good.
Our primary task must be to reduce drastically the amount of resources we use in our daily lives. The first step in doing that is to recognize that it is not goods which we seek, but the services they provide. The shareable economy in all its forms–outright sharing, libraries of tools and other items, renting from neighbors–offers a way to reduce considerably our resource use by giving people access to all manner of things and the services they provide without having to buy something new.
Essentially, we are using the vast idle capacity embedded in the existing infrastructure (in the broadest sense of the word) instead of promoting the idea that households and even businesses need to own every object from which they derive needed services–no matter how much those objects may remain essentially idle.
Now some people might complain that when you rent something to someone, it isn’t really sharing. But, I’m fine with having the term “shareable economy” signify the whole range of transactions that involve using existing rather than newly manufactured objects. This is the key distinction. And, I have no qualms about someone making a profit from such a transaction. I have long maintained that if we can make mitigating climate change and resource depletion profitable, then everyone will want to do it. Entrepreneurs around the world are figuring out ways to do just that.
I acknowledge that this is not a complete solution and that the sharing economy will inevitably take many forms. But in the absence of concerted government action, we shouldn’t underestimate or underutilize the power of the marketplace to spread profitable practices that mitigate both climate change and resource depletion.
The car sharing business is currently riding the tailwind of a shift in preference among young urban adults in America who increasingly find that they do not want to own cars. But it makes sense that people living in the densely packed urban centers of India and China might come to the same conclusion and that car sharing and other aspects of the shareable economy could grow there; after all, these cultures are much less individualistic than we Americans are.
We can dream of a renewable energy economy powered by wind and solar with new miraculous electricity storage technology and with electrified transportation, walkable cities and clean energy technologies deployed everywhere. People are working furiously on this future.
But, in the meantime, with climate change and resource depletion bearing down upon us, we cannot wait. We must pursue the least risky strategy available to us, namely, deep reductions in the resources we use to get the services we need. One the quickest ways that I can see that happening is the spread of the shareable economy in all its forms.
23 Comments on "The shareable economy: Don’t let the perfect be the enemy of the good"
Davy, Hermann, MO on Mon, 3rd Feb 2014 2:42 pm
Look we are going to need many ideas on making discretionary transport possible in the vicinity of 2020. Cars are so important to the current economic paradigm not only as an industrial driver of the economy but also a facilitator of consumerism that maintains the economic system. I have seen reports on what a 10% drop in supply will do to discretionary driving habits. We are talking in many cases a 50% drop in discretionary car use because of the need for essential services. Even more than this, if this drop in supply is not handled properly you will see an economy grind to a halt. Did you witness the UK gas strike and how industry started to close because of a 10% drop in truck traffic caused by the strike? We are going to need many ideas to mitigate and adapt to the initial supply problems or our system will shut down and not reboot. We have a just in time distribution system and a consumer lead economy that will not react well to a drop in supply of liquid fuels. When this occurs it is going to be the tipping point. I am still betting on the financial system doing the dirty work before the liquid fuel supply drops. The next few weeks are a dangerous time for the market. It should be exciting
Makati1 on Mon, 3rd Feb 2014 3:08 pm
Davy, it is not likely to happen. We will muddle on until we cannot and then it will all go bang and end. How many of us have to drive to work? If my observations of my friends and family are typical, 90% have to drive. The other 10% could take a bus or light rail or walk. Out of my 50 years of employment, I had to drive at least 5 miles each way and sometimes 40 or more. Few realize what is coming. It is too late to change an infrastructure built over the last 100+ years to accommodate the decline of energy that once powered it. By the time the current 1,000,000,000+ cars are worn out, (10 years or less) oil will be gone for personal use. You may own your last car.
Northwest Resident on Mon, 3rd Feb 2014 3:09 pm
When the American auto industry substantially fails to meet sales projections, the entire global economy will take a big hit. I forget what the percentage of the American economy is that is directly tied to the auto industry, but it is substantial. I guess that’s why nearly all of the Super Bowl commercials yesterday were automobile oriented — that can’t be interpreted any other way than that the auto industry really, really needs to sell more cars.
Northwest Resident on Mon, 3rd Feb 2014 3:12 pm
The automotive industry accounts for between 4 and 5 percent of U.S. gross domestic product and employed 716,900 people in 2011.
There is also an extensive network of auto parts suppliers serving the industry. Suppliers produced $171 billion in industry shipments in 2011, accounting for approximately 3 percent of total U.S. manufacturing. According to the Center for Automotive Research, automotive suppliers accounted for 3.3 million jobs nationwide in 2008 – more jobs and economic wellbeing than any other manufacturing sector.
rollin on Mon, 3rd Feb 2014 3:57 pm
Superbowl spending on car ads
During the 2013 Super Bowl, automakers spent $92 million on 12 commercials from nine brands, according to research firm Kantar Media. Over the past five games, Chrysler Group LLC ranks No. 4 among the top Super Bowl advertisers, spending an estimated $64.3 million, while Hyundai was third at $67.4 million, Kantar Media said.
From The Detroit News: http://www.detroitnews.com/article/20140129/AUTO01/301290029#ixzz2sGyPY7wQ
A drop in the bucket compared to total car sales of 85 million cars last year.
Northwest Resident on Mon, 3rd Feb 2014 4:36 pm
rollin — thanks for that additional info. My point remains the same, however, and that is — they are really trying hard to sell more cars. The Super Bowl has become a way to draw in huge crowds of shoppers, and the advertisers know how to influence those “shoppers” with their advertisements:
Automakers spent millions on ads during Super Bowl® XLVIII to grab the attention of car shoppers, and based on search activity on AutoTrader.com®, the investment paid off. For the third year in a row, analysts measured activity on AutoTrader.com during the big game to see which ads went beyond entertaining viewers to entice them to actively seek out more information about the brands and vehicles shown.
http://www.prnewswire.com/news-releases/auto-ads-win-over-car-shoppers-during-super-bowl-xlviii-243277891.html
Whether all that “seeking” on the internet ends up translating to “sales on the lot” is the big question.
Jerry McManus on Mon, 3rd Feb 2014 5:16 pm
But, wait… If you take away their cars then where are people going to sleep when the economy crashes and they lose their job, their home, and all their savings?
Perhaps when we’ve finished eliminating unemployment benefits, food stamps, social security and welfare in the name of “austerity” then maybe we could start giving away free cars to everyone. Call it “economic stimulus”.
Northwest Resident on Mon, 3rd Feb 2014 5:35 pm
Meanwhile, as posted on ZeroHedge:
“Ford and GM January car sales which tumbled by 7.5% and 12% respectively, on expectations for a decline of only 2.3% and 2.5% for the two US carmakers.”
http://www.zerohedge.com/news/2014-02-03/ford-gm-car-sales-tumble-weather-blamed-usual
Bad weather is blamed.
GregT on Mon, 3rd Feb 2014 6:04 pm
“We are going to need many ideas to mitigate and adapt to the initial supply problems or our system will shut down and not reboot.”
Got any ideas yourself? Every idea that I have heard, is to somehow continue on with some semblance of BAU, through further technological advancement. Technologies that all rely on the very thing that we are about to lose, energy. The system, as it currently stands, is not going to reboot. That would require continuing growth in energy production and resources.
Time to start thinking about the necessities of life, instead of all of the unnecessary stuff that we have grown so accustomed to, over the last several decades of human existence. Oh, and the INITIAL supply problems are only the beginning, the supplies will become smaller and smaller as we go forward.
ghung on Mon, 3rd Feb 2014 6:09 pm
From the article: “We must pursue the least risky strategy available to us…”
We? ‘We’ live in a culture well stocked with sociopaths who don’t do ‘we’ and see the economy as their casino where the potential payouts are enormous and the risks are socialized. “Sharing” isn’t part of their vocabulary. They have the advantage, as they are unrestrained by some moral obligation to the collective. They also spend billions promoting the ‘me first, now’ culture, offering instant gratification and the myth of a seat at the winner’s table.
Creating a fundamental change in cultural economics requires rejecting current economics; the same economic meme that virtually all of us are deeply invested in. Most folks don’t have enough wiggle room to consider alternatives, or understand that their investments and retirements are utterly dependent on things continuing as they have been. Any major change will be generational and forced.
It’s a good thing that alternatives such as a sharing economy are being seeded, even if the adoption of such things will be largely involuntary. The sharing economy must position itself to succeed by default; the best viable alternative when it becomes clear that the current meme has met it’s hard limits.
That said, the sociopaths and their followers won’t go down without a fight. Entitlement is also a generational thing, considered by many as a fundamental human right; a lifetime of believing the promises will actually be kept. They’ll bargain away their basic freedoms and childrens’ futures to see that they are.
There are going to be a lot of disappointed me-first people that won’t react well at all.
Northwest Resident on Mon, 3rd Feb 2014 6:22 pm
ghung — Hard to argue with your point of view. But one thing — a lot of psychopaths are the “bully” type mentalities. As long as they *think* they have the power and *think* they are in control, then they will exert their “control” ruthlessly. But, once they perceive that their power base is slipping away, or is questionable, then they are also likely to quickly fold and slip back into the shadows. I think the typical psychopath is a person who lies and schemes and manipulates his way into a position of control, and if called out onto the street for a one-on-one duel, will very likely turn tail and run — which will be the perfect chance to fill that sucker’s rear end full of buckshot…:-)
ghung on Mon, 3rd Feb 2014 6:51 pm
“… if called out onto the street for a one-on-one duel, will very likely”… call on his paid thugs, either private or your local PD, to let you know who’s in control. At least, that’s what history tells us. Or perhaps he’ll get his bought-and-paid-for politician to introduce a bill making your alternative idea nonviable or somehow illegal. Corporations like Monsanto have entire divisions devoted to this sort of thing.
Northwest Resident on Mon, 3rd Feb 2014 7:51 pm
ghung — Dang it! You’re right again. I forgot about the paid thugs.
DC on Mon, 3rd Feb 2014 7:59 pm
Well, at least Kurt acknowledges car-sharing isnt really a solution. More of a stop-gap on the road to environmental economic collapse. Sharing gas-burning trash cans to navigate the unsustainable,sprawly mess most of our cities have become, is a best, a psuedo-solution. It may be more ‘efficient’ by some metrics, but it leaves the current paradigm and design philosophy intact.IoW, car-sharing, even if widely practiced and successful, leaves no motivation to rebuild our sorry excuses for cities. No, what we really need is a post-gas-burning car vision. One that we can make a tangible reality. That is, before reality comes along and tangibly hits every suburban commuter in the head with a 2×4 and says, ‘wake-up’, commuting to ‘work’ and wall-mart is over, done finished. Your non-job in the city is gone for good and the nearest wall-mart 15 miles away is being converted to a giant swap\barter meet.
andya on Mon, 3rd Feb 2014 8:55 pm
You could reduce the number of cars on the road by 90%. LOL has the good professor actually talked to people who drive cars? Does he think they all want to share if only they had the chance? Does he not understand why they bought a car in the first place?
Awesome, why stop at 90%, everyone can just walk or stay at home. We could all completely stop carbon emissions if everyone just stopped being human.
I wouldn’t want reality to get in the way of a good utopia.
As to more sustainable WTF does that mean? Do you prefer slow cooked or deep fried?
“Don’t let reality be the enemy of fantasy”
Dan Sullivan on Tue, 4th Feb 2014 12:31 am
The only way to improve upon Shoup is to add things he supports but doesn’t often say. A land value tax will lead to less sprawl and, therefore, less need to travel. It will also lead to pressure for fewer parking requirements in the zoning laws, giving back the natural advantages that neighborhood businesses have over those that cater to car traffic.
These go hand-in-hand with charging market rates for public parking, which is his core proposal. Royalties on oil and pollution charges on gasoline round out the logical connection. All these could offset payroll taxes, for example.
And anyone who thinks Shoup hasn’t talked to drivers hasn’t actually read Shoups works or listened to his lectures, some of which are online.
Davy, Hermann, MO on Tue, 4th Feb 2014 1:06 am
GregT on Mon, 3rd Feb 2014 6:04 pm
Got any ideas yourself? Every idea that I have heard, is to somehow continue on with some semblance of BAU, through further technological advancement
Now GregT, we need to clarify time frame. I tend to speak of different solutions pre-collapse and others post collapse. Pre-collapse for example I would advocate numerous typical BAU strategies to improve the odds of allowing for a less severe collapse. This generally would mean fossil energy, technology, efficiency strategies. I am not advocating these ideas for more than a few years. I am revolving my plans around a vicinity of 2020 collapse. It will likely be a collapse to a lower level still resembling our world today since we have so much built up infrastructure to work with. This may last up to another 5 years before the cannibals and entropy make hash of what is left. Post collapse I am planning on 19th century strategies for farming, transport, food, heating/cooling, clothing, and leisure. I find it very important to have a few more years to get some of the tools, skills, and supplies together to 1st have a bridge lifeboat to a likely 19th century lifestyle. I am not saying everywhere will be this way. I am in the Ozarks of Missouri and it will likely be that way here very quickly. The people here will adapt quickly to the change. They already have a cattle farming tradition going. Horses are a big part of our life. There are Amish and Menonites in the area. This is just my local strategy. This won’t replicate in a highly urban setting. So
Makati1 on Tue, 4th Feb 2014 2:48 am
My source says that only 15,600,000 cars were sold in the US in 2013. Of those,750,000 were imports. !5.6 million is about % of the total US vehicles. At that rate, it will take 16+ years to roll over the entire fleet. No chance of switching to something ‘renewable” now.
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
Makati1 on Tue, 4th Feb 2014 2:49 am
… 6% …
GregT on Tue, 4th Feb 2014 2:55 pm
Davy,
“Pre-collapse for example I would advocate numerous typical BAU strategies to improve the odds of allowing for a less severe collapse. This generally would mean fossil energy, technology, efficiency strategies. I am not advocating these ideas for more than a few years. I am revolving my plans around a vicinity of 2020 collapse.”
While I completely agree with your ideas, I have absolutely no faith in any of them being implemented. If anything, we are heading towards a future more dependant on fossil fuel based tech, and although we may be making SOME headways on efficiencies, what we save in one place, is being used somewhere else. (Jevon’s paradox.) If anything, us humans are increasing our dependancy on fossil fuels, and are increasing CO2 emissions. Also, CO2 is accumulative.
I’m not so sure about 2020, but ‘around’ that time frame for sure. 2020, would give us just less than 5 years to mitigate the effects of a collapse. In reality, if the entire planet banded together in an all out effort to actually do something meaningful, I doubt we would be able to come up with viable solutions in 5 decades. Simply because there ARE no solutions that do not entail a large population adjustment, and/or the continuation of CO2 emissions into the environment.
Post collapse? If we truly have any chance of averting a future runaway greenhouse event, we can no longer rely on any fossil fuel based technologies, period. No coal, no natural gas, no conventional or unconventional oils, and no biofuels. The 19th century was heavily reliant on fossil fuels, and fossil fuel based technologies. If anything we need to return back to the days of pre-industrial revolution. More like 17th century.
GregT on Tue, 4th Feb 2014 3:15 pm
Oops, less than 6 years till 2020. There really needs to be an edit function here……..
dashster on Tue, 4th Feb 2014 4:27 pm
The bad thing about American commuting habits is that it has wasted a massive amount of oil over the years. The good thing is that it allows a tremendous reduction in oil usage in the future by the US if people are forced to start taking the bus to work. Or maybe that should be, it has a tremendous amount of slack in the US system for it to adapt to a decline in oil production.
Although for everyone to start taking the bus (light rail/train) to work, there is gonna have to be more service. And since the fares don’t cover the service cost, that could be problematic.
GregT on Tue, 4th Feb 2014 9:24 pm
dashster,
Assuming that people WILL be going to work. Somehow, I doubt that very much………..