Collaborative consumption

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Collaborative consumption is the set of those resource circulation systems in which consumers both "obtain" and "provide", temporarily or permanently, valuable resources or services through direct interaction with other consumers or through a mediator. It is sometimes paired with the concept of the "sharing economy". [1] [2] Collaborative consumption is not new; it has always existed (e.g. in the form of flea markets, swap meets, garage sales, car boot sales, and second-hand shops). [3] [4]

Contents

In 2011, collaborative consumption was named one of Time magazine's 10 ideas that will change the world. [5]

Definition

The first detailed explanation of collaborative consumption in the modern era was in a paper from Marcus Felson and Joe L. Spaeth in 1978. [6] It has regained a new impetus through information technology, especially Web 2.0, mobile technology, and social media. [7]

A June 2018 study, [8] using bibliometrics and network analysis, analyzed the evolution of scholarly research on collaborative consumption, and identified that this expression started in 2010 with Botsman and Rogers' (2010) book What's Mine is Yours: The Rise of Collaborative Consumption. The number of studies published on the subject then increased in 2014. There are four clusters of research: 1) exploration and conceptualization of collaborative consumption; 2) consumer behavior and marketing empiricism; 3) mutualization and sharing systems; 4) sustainability in the collaborative economy. The analysis suggests that this last cluster was under-researched in contrast to the three others, but started to increase in importance after 2017.

Collaborative consumption contrasts with conventional consumption or traditional consumption. [9] Conventional consumption involves passive consumers who cannot, or are not given the capacity to, provide any resource or service. In contrast, collaborative consumption involves not mere "consumers" but "obtainers", who do not only "obtain" but also "provide" resources to others (e.g. consumers, organizations, governments). [2] Consumers' capacity to switch roles from "provider" to "obtainer" and from "obtainer" to "provider", in a given resource distribution system, distinguishes conventional consumption from collaborative consumption.[ citation needed ]

Rachel Botsman, co-author of What's Mine Is Yours: The Rise of Collaborative Consumption, defines collaborative consumption—also known as "shared consumption"—as "traditional sharing, bartering, lending, trading, renting, gifting, and swapping redefined through technology and peer communities." [10] She states that we are reinventing "not just what we consume – but how we consume." [10] Botsman uses the example of a power drill to make her case for collaborative consumption: power drills are inherently underused since "what [is needed] is the hole, not the drill", [10] so, instead, we should share goods such as these. For another example, cars cost at least $8,000 per year to run, even though they sit parked roughly 96 percent of the time.

Botsman defines three systems that constitute collaborative consumption: Distribution markets where services match haves and wants so that personal unused assets can be redistributed where they will be put to better use. Collaborative lifestyles allow people to share resources like money, skills, and time; this is best explained as the sharing of intangible resources. Product service systems provide the benefits of a product without having to own it outright; instead of buying products that are used to fulfill specific purposes, they can be shared. These different systems bring about change in society by providing new employment opportunities, including ways for people to earn money peer-to-peer, and decreasing the ecological impact on the environment. [10] At TEDGlobal2012 Botsman asserted that the concept of trust, across multiple platforms, would constitute the currency of a new collaborative economy, saying that "reputation capital creates a massive positive disruption in who has power, influence and trust." [11]

Importance

The sharing economy is built on the sharing of underused assets, both tangible and intangible. If people start sharing underused resources or services, this will decrease not only their material waste but also their waste of resources.

There are broadly two forms of collaborative consumption:

  1. Mutualization or access systems: resource distribution systems in which individuals provide and obtain temporary access to resources, either free or for a fee. [12] Marketer-managed access schemes (e.g. Car2Go, Zipcar, Bixi) do not allow individuals to source resources, [1] [13] [14] and are therefore not mutualization systems, whereas peer-to-peer renting sites [1] [15] or even toy-lending libraries, [16] which allow consumers to provide resources, are.
  2. Redistribution systems: resource distribution systems in which individuals may provide and obtain resources permanently, either free or for a fee. [1] [17]

Focusing on redistribution systems only, the Canadian-based "Kijiji Secondhand Economy Index" of 2016, [18] estimated that about 85% of consumers acquired or disposed of pre-owned goods through second-hand marketplaces (second-hand purchase and resale), donation, or barter, through either online or offline exchange channels. According to the "Kijiji Secondhand Economy Index" of 2015, the Canadian second-hand market alone was estimated at 230 billion dollars. [19]

In addition, for-profit mutualization platforms, commonly referred to as "commercial peer-to-peer mutualization systems" (CPMS) or, more colloquially, the sharing economy, represented a global market worth 15 billion dollars in 2014; 29 billion dollars in 2015; and are expected to reach 335 billion dollars by 2025. [20]

Many thinkers[ who? ] believe that collaborative economy, particularly in its commons-based peer production aspect, can cause major changes to the economic system of capitalism and reduce worldwide inequality. [21] : 8 

Consumer two-sided role

Collaborative consumption challenges business scholars and practitioners alike because it induces a two-sided consumer role which goes beyond the classic notion of a buyer/consumer, who typically has no input in the production or distribution process. [22] Companies have traditionally sold products and services to consumers; they now start pulling on[ clarification needed ] their resources too through co-creation [23] or prosumption. [22] According to Scaraboto,[ clarification needed ] this means that individuals are able to "switch roles, engage in embedded entrepreneurship and collaborate to produce and access resources". [24] Collaborative consumption is characterized by consumers' capacity to be both "providers" and "obtainers" of resources in a given "resource circulation system". A collaborative consumption system means therefore a resource circulation system in which the individual is not only a mere "consumer" but also an obtainer who has the opportunity to endorse, if wanted or needed, a "provider" role (e.g. Kijiji, Craigslist, eBay), as follows: [2]

Through collaborative consumption, consumers become part of the value creation process, not as formal workers, employees, or suppliers, but as informal suppliers (i.e. providers). [25] Organizations also tap into the sphere of private assets and skills, as formal organizations and not as family, friends, or acquaintances, to make profits or reach other objectives. [7] The practices obtainers and providers may engage in are therefore classified into: [2]

Consumers may exchange resources and services directly with or without the support of an "intermediary" (an entity that facilitates the exchange between obtainer and provider [2] such as Kijiji, Freecycle, Yerdle). In these exchanges, the consumers set the terms and conditions of the exchange, in pure collaboration. There are also other types of third-parties that are more heavily involved in the consumer-to-consumer relationship. These are called "mediators" and they determine the terms and conditions of the exchange between consumers and typically take for themselves a predetermined proportion of the amount of value being exchanged. [2] Examples include second-hand stores to which consumers may donate or resell goods that are then subsequently resold to other consumers. Some platforms such as Uber, Airbnb, TaskRabbit, or Lending Club are also in this category. The intervention of mediators in a peer-to-peer relationship signals sourcing collaboration and its corollary, trading collaboration (see below).

Collaborative intensity

Collaborative consumption can be conceived of as a "resource circulation system" [12] incurring different levels of collaborative intensity, namely:

  1. Pure collaboration (C2C, or Consumer-to-Consumer)
  2. Sourcing collaboration (C2O, or Consumer-to-Organization)
  3. Trading collaboration (O2C, or Organization-to-Consumer)

A mediating or intermediary organization may be a for-profit or a not-for-profit: [2]

CharacteristicsPure collaborationSourcing collaborationTrading collaboration
ProcessBoth the obtainer and the provider are consumers who exchange a resourceThe provider provides a resource or service to the obtainer through a mediatorThe obtainer obtains a resource or service from the provider through a mediator
Process exampleThe secondhand purchase/sale of a television set at a flea marketResale of a television set to a secondhand electronics shopA consumer purchases the television set from the secondhand electronics shop
Exchange type C2C C2OO2C
Consumer roleObtainer and providerProviderObtainer
Presence of facilitators (e.g. Web platform)YesYesYes
Presence of mediatorNoYesYes

Pure collaboration

Pure collaboration [2] involves direct P2P exchanges, in which consumers directly exchange a specific resource or service. For example, on online platforms such as classified ads or auctions websites, consumers directly provide and obtain resources or services. Although these online platforms are intermediates they are not "mediators", because consumers are free to devise the terms and conditions of distribution and consumption of the resource or service together, whereas mediators interfere in the devising. In sum, mediators are intermediates but not all intermediates are necessarily mediators. For example, the Canadian-based carpool website Amigo Express does not allow obtainers (riders) and providers (drivers) to get into contact to arrange the terms of the ride. Rather, each agent needs to separately contact and pay a fee to the website in order to, respectively, obtain and provide the service. Amigo Express is, therefore, an intermediate that is a mediator. Conversely, using TheCarpoolingNetwork enables consumers to arrange themselves the terms and conditions of the exchange, and so the website acts as a facilitator, not as a mediator. Most C2C websites are online platforms and operate on the freemium model, where the use of the website is free, but premium features must be paid for (e.g. Craigslist). [24] Others have a donationware mode of exchange, whereby website use is free but financial donations are requested or accepted to offset production and maintenance costs (e.g. The Khan Academy). [24]

Sourcing collaboration

Sourcing collaboration [2] New technologies have sparked entrepreneurial creativity to develop new breeds of intermediates.[ clarification needed ] They[ who? ] claim to challenge conventional business, and they do so, because they operate business differently, without delivering or producing anything by themselves, but by capitalizing on the logics of crowdsourcing to do so. Sourcing collaboration, therefore, means that organizations do not provide a resource or deliver a service to consumers by themselves, but rely on providers (i.e. consumers) to do either. They benefit from the internet to mediate, at a cost and more efficiently, exchanges that would otherwise be authentically C2C exchanges. As an example, sourcing collaboration may refer to refurbished or reconditioned products, sold by conventional organizations, but provided by consumers (i.e. providers) who were, for some reason, dissatisfied with the products in question. Other examples include consumer provision of resources to antique dealers, consignment shops or Amazon's Fulfillment By Amazon (FBA) program. Similarly, online platforms that take a percentage commission (e.g. Uber, Instacart, TaskRabbit, Airbnb), actually outsource the fulfillment of specific tasks or jobs to consumer A in order to efficiently redistribute those to consumer B. Also, a tangible resource may circulate across multiple organizations (intermediates) from the provider to the obtainer. For example, a car sold by a consumer to a professional car dealer may then be sold and resold by several other car dealers, before being eventually resold to a consumer.[ citation needed ]

Trading collaboration

Trading collaboration [2] is the symmetrical opposite of "sourcing collaboration", in that it refers to the obtainer who enjoys a resource mediated by an organization but originally provided by another consumer (i.e. provider) via sourcing collaboration. The obtainer thus benefits from a resource that has been originally sourced by a provider to a mediator. The mediator, in turn, offers the provider's resource to the obtainer, usually—but not exclusively—at a cost, which will be fully, partially, or not at all returned to the original provider. In contrast to conventional consumption where the resource being enjoyed originates from a company, trading collaboration presupposes that the resource enjoyed by the obtainer has originally been sourced by another consumer. For example, trading collaboration occurs when consumer B obtains a cheaper refurbished iPhone that has been traded into Best Buy by consumer A. Or it occurs when consumer B enjoys the delivery of her groceries by consumer A, through the Instacart crowdsourcing application.[ citation needed ]

Types

Examples of Commons-based peer production (CBPP) communities, aka P2P communities One day living with commons-based peer production communities (CBPP).svg
Examples of Commons-based peer production (CBPP) communities, aka P2P communities

Collaborative consumption is a sort of economic arrangement in which participants mutualize access to products or services, in addition to finding original ways to individual ownership. [26] [27] The phenomenon stems from consumers' desire to be in control of their consumption instead of "passive 'victims' of hyperconsumption". [28]

The collaborative consumption model is used in online marketplaces such as eBay as well as emerging sectors such as social lending, peer-to-peer accommodation, peer-to-peer travel experiences, [29] peer-to-peer task assignments or travel advising, and carsharing or commuting-bus sharing. [28]

In 2010, Botsman and Rogers identified three resource circulation systems within collaborative consumption or the sharing economy: product-service systems, redistribution markets, and collaborative lifestyles.

Product-service systems

Product-service systems are commercial peer-to-peer mutualization systems (CPMS), that allow consumers to engage in monetized exchanges through Social peer-to-peer processes for temporary access to goods. Consumers can share or rent out goods that they privately own by means of peer-to-peer marketplaces. [30] For example, BMW's "DriveNow", established in 2011, is a car rental service that offers an alternative to owning a car. Users can access a car when and where they need one and pay for their usage by the minute. [31] A variety of traditional companies now also offer sharing services. [32]

Redistribution markets

A system of collaborative consumption is based on used or pre-owned goods being passed on from someone who does not want them to someone who does want them. This is another alternative to the more common 'reduce, reuse, recycle, repair' methods of dealing with waste. In some markets, the goods may be free, as on The Freecycle Network, Zwaggle, or Kashless.org. In others, the goods are swapped (as on Swap.com) or sold for cash (as on eBay, craigslist, and uSell).

Collaborative lifestyles

Collaborative lifestyles refer to community-based platforms that allow consumers to engage in monetized exchanges through social peer-to-peer processes for services or access to resources such as money or skills. [33] In these systems, people with similar needs or interests band together to mutualize and exchange less-tangible assets such as time, space, skills, and money. The growth of mobile technology enables location-based GPS technology and real-time sharing. [34]

See also

Related Research Articles

<span class="mw-page-title-main">Peer-to-peer</span> Type of decentralized and distributed network architecture

Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the network, forming a peer-to-peer network of nodes.

Overconsumption describes a situation where a consumer overuses their available goods and services to where they can't, or don't want to, replenish or reuse them. In microeconomics, this may be described as the point where the marginal cost of a consumer is greater than their marginal utility. The term overconsumption is quite controversial in use and does not necessarily have a single unifying definition. When used to refer to natural resources to the point where the environment is negatively affected, is it synonymous with the term overexploitation. However, when used in the broader economic sense, overconsumption can refer to all types of goods and services, including manmade ones, e.g. "the overconsumption of alcohol can lead to alcohol poisoning". Overconsumption is driven by several factors of the current global economy, including forces like consumerism, planned obsolescence, economic materialism, and other unsustainable business models and can be contrasted with sustainable consumption.

Internet traffic is the flow of data within the entire Internet, or in certain network links of its constituent networks. Common traffic measurements are total volume, in units of multiples of the byte, or as transmission rates in bytes per certain time units.

A prosumer is an individual who both consumes and produces. The term is a portmanteau of the words producer and consumer. Research has identified six types of prosumers: DIY prosumers, self-service prosumers, customizing prosumers, collaborative prosumers, monetised prosumers, and economic prosumers.

Commons-based peer production (CBPP) is a term coined by Harvard Law School professor Yochai Benkler. It describes a model of socio-economic production in which large numbers of people work cooperatively; usually over the Internet. Commons-based projects generally have less rigid hierarchical structures than those under more traditional business models.

<span class="mw-page-title-main">Sharing</span> Joint use of a resource or space

Sharing is the joint use of a resource or space. It is also the process of dividing and distributing. In its narrow sense, it refers to joint or alternating use of inherently finite goods, such as a common pasture or a shared residence. Still more loosely, "sharing" can actually mean giving something as an outright gift: for example, to "share" one's food really means to give some of it as a gift. Sharing is a basic component of human interaction, and is responsible for strengthening social ties and ensuring a person’s well-being.

Social peer-to-peer processes are interactions with a peer-to-peer dynamic. These peers can be humans or computers. Peer-to-peer (P2P) is a term that originated from the popular concept of the P2P distributed computer application architecture which partitions tasks or workloads between peers. This application structure was popularized by file sharing systems like Napster, the first of its kind in the late 1990s.

Peer support occurs when people provide knowledge, experience, emotional, social or practical help to each other. It commonly refers to an initiative consisting of trained supporters, and can take a number of forms such as peer mentoring, reflective listening, or counseling. Peer support is also used to refer to initiatives where colleagues, members of self-help organizations and others meet, in person or online, as equals to give each other connection and support on a reciprocal basis.

Reputation systems are programs or algorithms that allow users to rate each other in online communities in order to build trust through reputation. Some common uses of these systems can be found on E-commerce websites such as eBay, Amazon.com, and Etsy as well as online advice communities such as Stack Exchange. These reputation systems represent a significant trend in "decision support for Internet mediated service provisions". With the popularity of online communities for shopping, advice, and exchange of other important information, reputation systems are becoming vitally important to the online experience. The idea of reputation systems is that even if the consumer can't physically try a product or service, or see the person providing information, that they can be confident in the outcome of the exchange through trust built by recommender systems.

<span class="mw-page-title-main">Industrial symbiosis</span>

Industrial symbiosis a subset of industrial ecology. It describes how a network of diverse organizations can foster eco-innovation and long-term culture change, create and share mutually profitable transactions—and improve business and technical processes.

Product-service systems (PSS) are business models that provide for cohesive delivery of products and services. PSS models are emerging as a means to enable collaborative consumption of both products and services, with the aim of pro-environmental outcomes.

Sustainable consumption is the use of products and services in ways that minimizes impacts on the environment. Sustainable consumption is done in a way that needs are met for present humans but also for future generations. Sustainable consumption is often paralleled with sustainable production; consumption refers to use and disposal not just by individuals and households, but also by governments, businesses, and other organizations. Sustainable consumption is closely related to sustainable production and sustainable lifestyles. "A sustainable lifestyle minimizes ecological impacts while enabling a flourishing life for individuals, households, communities, and beyond. It is the product of individual and collective decisions about aspirations and about satisfying needs and adopting practices, which are in turn conditioned, facilitated, and constrained by societal norms, political institutions, public policies, infrastructures, markets, and culture."

<span class="mw-page-title-main">Cloud computing</span> Form of shared Internet-based computing

Cloud computing is the on-demand availability of computer system resources, especially data storage and computing power, without direct active management by the user. Large clouds often have functions distributed over multiple locations, each of which is a data center. Cloud computing relies on sharing of resources to achieve coherence and typically uses a pay-as-you-go model, which can help in reducing capital expenses but may also lead to unexpected operating expenses for users.

Collaborative finance is a category of financial transaction that occurs directly between individuals without the intermediation of a traditional financial institution. This new way to manage informal financial transactions has been enabled by advances in social media and peer-to-peer online platforms. The wide variety of collaborative finance resources may vary not only in their organizational and operational aspects, but also by geographical region, share of the financial market etc. It is precisely this heterogeneity that enables the informal savings and credit activity to profitably reach those income-groups not served by commercial banks and other financial institutions. It is their informality, adaptability and flexibility of operations – characteristics which reduce their transactions costs and confers upon them their comparative advantage and economic rationale. Collaborative Finance is characterized by highly personalized loan transactions entailing face-to-face dealings with borrowers and flexibility in respect of loan purpose, interest rates, collateral requirements, maturity periods and debt rescheduling.

Digital collaboration is using digital technologies for collaboration. Dramatically different from traditional collaboration, it connects a broader network of participants who can accomplish much more than they would on their own. Digital Collaboration is used in many fields, for example digital collaboration in classrooms.

The sharing economy is a socio-economic system whereby consumers share in the creation, production, distribution, trade and consumption of goods, and services. These systems take a variety of forms, often leveraging information technology and the Internet, particularly digital platforms, to facilitate the distribution, sharing and reuse of excess capacity in goods and services.

Open collaboration is any "system of innovation or production that relies on goal-oriented yet loosely coordinated participants who interact to create a product of economic value, which is made available to contributors and noncontributors alike." It is prominently observed in open source software, but can also be found in many other instances, such as in Internet forums, mailing lists and online communities. Open collaboration is also thought to be the operating principle underlining a gamut of diverse ventures, example including bitcoin, TEDx, and Wikipedia.

Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use the source code, design documents, or content of the product. The open-source model is a decentralized software development model that encourages open collaboration. A main principle of open-source software development is peer production, with products such as source code, blueprints, and documentation freely available to the public. The open-source movement in software began as a response to the limitations of proprietary code. The model is used for projects such as in open-source appropriate technology, and open-source drug discovery.

Collaborative society is a view of human society defined as encompassing the emerging phenomena of citizen science, collaborative media, digital communication gift economy, peer production, remix culture, and the sharing economy. It relies on various modes of distribution of resources in the economy, and their resulting consumption, based around the basic principles of sharing and collaboration. Dariusz Jemielniak and Aleksandra Przegalińska have defined it as "a series of services... that enable peer-to-peer exchanges and interactions through technology" as well as "an increasingly recurring phenomenon of emergent and enduring cooperative groups, whose members have developed particular patterns of relationships through technology-mediated cooperation"

A digital platform is a software-based online infrastructure that facilitates user interactions and transactions.

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