While Occupy Wall Street protesters rail against the economic elite a new breed of Internet startups is out to overthrow big businesses as rulers of the marketplace.
Entrepreneurs are catering to a new generation that would rather share cars than own them; sleep in spare bedrooms instead of haughty hotels, or raise capital from peers instead of borrowing from banks.
“We are at the start of an ownership revolution,” said Rachel Botsman, whose successful book, What’s Mine is Yours, showcases a technology-driven shift to “collaborative consumption.”
“We don’t want the DVD, we want the music,” she said. “We don’t want cars, we want to get from A to B. There is a generation growing up that has a whole different relationship to ownership.”
Hot startups embracing the trend include Zimride, TaskRabbit, and Airbnb, which have flourished by providing services that let people share car rides, chores and spare room respectively.
“It is about getting back to the sense of neighborhood that people lost and want a piece of back,” TaskRabbit founder Leah Busque said.
“Finally, technology has caught up in a way that it can mimic human behavior and develop trust in a community,” Busque said. “These collaborative consumption companies are thriving.”
Airbnb was recently valued at US$1 billion. TaskRabbit reported seeing about US$4 million in economic activity monthly and boasted creating 2,000 jobs in the past six months.
“The way people live and do things is changing,” Busque said. “We are on the brink of a major groundswell of peer-to-peer marketplaces shifting the way things happen.”
Investors in Zimride include social networking giant Facebook, which pumped US$250,000 into the startup a year after it launched in 2007.
The idea for Zimride struck Logan Green while he was in Zimbabwe and noticed how people shared van rides in ways that were more efficient than public transportation networks in the US.
Logan and fellow co-founders, John Zimmer and Matt Van Horen, combined online social networking with ride-sharing in a startup named in tribute to the place that inspired the idea.
Zimride oversees ride-sharing communities at 120 universities and companies in the US and weeks ago launched its first public routes — between San Francisco and Los Angeles or Tahoe.
“The sense of freedom and individualism is evolving,” Zimmer said. “The car used to mean freedom; our generation doesn’t identify with that as much.
“You have Facebook and a mobile phone as sources of freedom and identity, the car isn’t as important,” he added.
Underpinning the collaborative models are online communities in which people build reputations when it comes to sharing homes, cars, money or other things with real-world strangers.
Botsman, who lives in Sydney, began studying the trend about five years ago and saw it flourish as the Internet provided venues for communities based on shared interests.
“Old market behaviors like sharing, renting and swapping are being brought back in modern ways,” Botsman said.
“People are realizing they have the power to re-invent markets,” she added.
Distrust of banks has led to online services that let people lend one another money at negotiated rates.
“In the United Kingdom, social lending is 10 percent of the personal loan market,” Botsman said. “If I was a bank, I would be seriously worried.”