invest-in-sharing

The concept of a share business, where consumers rent a product or service or exchange using a common platform with a collective of hundreds, if not thousands of customers, is having an impact on economies at the local and national level. Just as importantly, though, many different industries from fashion to finance, accommodation to car hire and office space are now being disrupted by a new way of doing business. If you weren’t aware of them already, you’ll soon see that share businesses are popping up everywhere.

The industries where share businesses appear don’t have a lot in common, but in each instance an entrepreneurial individual or group has taken the relationship between buyer and seller into new territory as consumers get to grips with a new economic environment. There’s something else share businesses have in common too – they encourage you to communicate with those around you, only take what you need and they discourage you from letting something you don’t use 95% of the time (or sometimes less) stay idle – if they don’t discourage over-supply in the first place.

“We’ve had people that have certainly made back what they paid for something but we do still have a large element of people who are doing it ‘feel better’ about all the stuff they own.”
-Lisa Fox, Open Shed

Why switch to a ‘share business’?

To a lot of users this seems to just make sense, and when many start using a share business, they may actively seek to use others, according to the owner of share business Open Shed and collaborative consumption enthusiast Lisa Fox. “We’ve had people that have certainly made back what they paid for something but we do still have a large element of people who are doing it to ‘feel better’ about all the stuff they own. It’s great that people might see it as a way to add value to their own life as well. You share tips and see someone else do something that you enjoy as well,” she says. Fox has also used other share businesses and understands that like attracts like when it comes to drumming up business – so the hope is that users will tell others they know about their experience using a share business and those who are ‘converted’ will seek out other similar businesses. It’s also already worked for Open Shed, when Fox was approached by property developers, Stockland to pilot Open Shed in six of their communities.

Odd jobs share platform Air Tasker has also struck a deal to advertise positions with Career One, announced July 16, demonstrating that there is a place in the mainstream economy for the ‘share business’ way of thinking.

You’ve no doubt heard of a scheme like GoGet by now, or maybe you’ve even stayed in someone else’s house on the other side of the world thanks to AIRbnb. But did you know you can rent out your favourite top for a few bucks, or borrow some tools on openshed.com.au? Or that you can borrow someone else’s car who lives in your street if you live in parts of Sydney using Car Next Door? You can also apply for a loan where investors bid on your request and determine what interest rate you get via Society One. According to those behind such ventures, sharing isn’t just about caring. It allows for maximum use of any type of asset, so long as you are willing to comply with a few (mostly simple common sense) rules.

Where to start

Creditcard.com.au spoke to business owners and users from five different industries that use a ‘share business’ model where customers either rent something another owns, share an asset owned by the company or collaborate to make the cost of a large expense more manageable. We started with probably Australia’s first ‘share’ business, which turns ten years old this year – GoGet and discovered that car sharing is starting to take off in Australia in more ways than one. It’s also already been said in a June editorial for the New York Times, “It’s Not Just Nice to Share: It’s the Future”.

1) Car sharing

GoGet – www.goget.com.au

Cars were an obvious first candidate for a shared business model. Sydney and Melbourne are known for their horrendous traffic jams, and even ‘cheap’ cars will set you back thousands of dollars brand new on an asset that will depreciate more than 10% the minute you drive it out of the dealership. Parking is another story entirely, but it’s easy to see why founders Nic Lowe and Bruce Jeffreys were moved to introduce car sharing to Australia even back in 2003. Ten years on, GoGet fleets exist on streets in Sydney, Melbourne, Adelaide and Brisbane and the mission of GoGet – to remove private car owners from the streets and decrease car usage – has aligned well with the mission of at least some local councils, which allocate a certain number of spots for GoGet customers only. “The number of spaces depends on support from local council areas. “We have a GoGet car on our street, but if you’re heading to the Eastern suburbs, it’s easier to walk around 3 minutes and take a car that is facing the right direction,” says GoGet frequent user Meg, from Sydney. Living on the border of one council that supports GoGet and allocates a generous amount of parking spaces has its benefits, according to her. She has been a regular GoGet user since 2006, and even turned down the offer of a free car left to her husband because neither wanted the responsibility and they found it easier to go with a service such as GoGet.

Car Next Door – www.carnextdoor.com.au

GoGet owns a fleet of vehicles by now, and has to stand behind the quality of vehicles and the level of service it provides. That’s part of the reason why you can choose a mini if you’re just cruising around the shops, or a van if you are moving and need to buy new shelves and room furniture from IKEA. People also like the way it feels to use a car share service, according to a senior consultant- which includes billing by the hour, only for the hours you actually use the car, and the ability to walk up and drive away then leave the car in the same place and never have to worry about insurance, fuel costs or repairs. But what if you have a car and want to get a piece of the action by renting out your car on the days you don’t use it? Well, you can if you join Car Next Door – the car sharing service that offers users a very similar experience (cars on your street, walk up and swipe the device to get in, pay for the day and fuel and insurance covered) but also offers members an income from their idle car instead of owning an expensive fleet.

“Our model works in most places because it only costs a few hundred dollars to set a car up for sharing.”
– Will Davies, Car Next Door

The top car owner with Car Next Door managed to make $580 in the month covering the second half of June and first half of July, according to founder Will Davies. “Another who only uses her car on the weekends made $230. That’s pretty significant considering the majority of car share users only hire cars on the weekend, so that was all just weekday users,” he adds. Car Next Door members are covered by the company insurance policy which he says means many don’t need separate insurance. “Our model works in most places because it only costs a few hundred dollars to set a car up for sharing],” says Davies.

At the moment Car Next Door operates a small network of cars in Sydney, but it will be a different story in two years’ time, according to Davies, with plans to expand. Fox also says that without the bigger model of GoGet, Car Next Door may have had a harder time getting established: “If there was never car sharing in the GoGet sense you could never have Car Next Door because if people hadn’t already cottoned on to the idea of hiring a car by the hour it would have been a giant leap from one business to the other,” she adds. Car related concepts such as car pooling service Jayride and garage rental site Parking Made Easy are in a similar position.

FlexiCar – www.flexicar.com.au

What if you want to take your car sharing global? Well, turns out that can be arranged too. Flexicar, another car sharing service that has been around since 2004 has recently partnered with global car hire firm Hertz, meaning you can use the car sharing concept from your Australian membership on your next trip to New York, Paris, London, Berlin or elsewhere.

Flexicar is keen to demonstrate to drivers just how much they can save per year on car sharing too. The average Australian car owner’s costs fall from around $8000 per year to $760.44 or so when they sign up. Monthly costs fall from around $600 to $63.37. If you’d taken out a loan to buy your car and factor in repayments you’d actually be saving an extra $5000 per year, according to Flexicar.

If you’re still not convinced on car sharing, it’s worth remembering that one car share vehicle replaces an additional 8-14 cars that would otherwise be bought by individuals, and car sharers drive around 10,000km less each year, saving fuel and co2 emissions too.

2) Shared office space

Gaffa – www.gaffa.com.au

Shared Office Space

Another area for pooling assets and resources is the shared office, something that more and more freelancers and contract workers have cottoned on to as the size of the full time employment market diminishes in Australia. A google search of ‘shared office spaces in Australia’ will reveal alternatives in all major cities, including Adelaide and Brisbane. The idea with sharing an office is that the overheads are reduced for everybody and it beats working from home because you’ll have amenities like a photocopier/fax machine, printer and cleaner thrown in, as well as a kitchen to cater for yourself if you need. You can also usually gain 24/7 access and keep your own hours, and in some cases you’ll meet others who you can form your own joint ventures or collaborations with – as men’s accessories designer Clara Ho did when she moved in to Gaffa, a shared space in Sydney’s CBD. “As well as studio space, they have a store and retail space also available for short term rent, which is where I have the opportunity to sell and display my work,” she says. Her business, Burton Metal Depository is part-run from the shared studio and her home studio. “It’s hard to say how much I’ve saved, probably around the thousands of dollars just in terms of equipment costs. It’s difficult to say however, because I see a lot of the value is in the support network and exposure to other artists and their work that I get by using the space,” she adds.

Hub Australia – hubaustralia.com

Gaffa is just one of many collaborative workspace providers in Australia. There are different sorts of spaces available in cities across Australia from Hub Australia. Hub Australia also provides work and event spaces, networking events and opportunities to form a community to freelance and project workers in Sydney, Melbourne and Adelaide. The founder and chief executive of Hub Australia, Brad Krauskopf, is passionate about helping small businesses collaborate and pool their talent and resources to create a bigger impact on the economy. “When small business connect and collaborate with one another they create a resilient network, it’s through the building of that social capital that they are able to build on our ideas, services and products,” he said in a press release discussing his appointment as Small Business Ambassador of Australia by the Council of Small Businesses of Australia. Hub Australia also forms part of a global network for users to tap into.

Fishburners – fishburners.org

Fishburners Logo

For those who are technically minded but don’t want to work alone, Fishburners.org could be the solution. Fishburners describes itself as Australia’s largest co-working space for tech start-ups, with more than 120 early stage tech start-ups occupying its Sydney desks. Fishburners.org began in 2011 as a charity for fostering tech entrepreneurship in Australia, and serves as a community for members who rent a permanent desk or a ‘hot desk’ through a membership program. Since it began corporate sponsors have come on board, including Optus, PwC, Anchor, BigAir. Fishburners is also supported by Google.

Fishburners also offers members access to discounted resources, pro-bono services, education, and peer support sessions. This includes accommodating meetups, keynote speakers, hackathons, programs and other events which see more than 1,000 people per month visit the warehouse in Ultimo, Sydney.

3) Accommodation

AIRbnb – www.airbnb.com.au & Trusted House Sitterstrustedhousesitters.com

House share

Accommodation is another area where the ‘share business’ model has really taken off. AIRbnb is now well known, and well used by travellers looking for affordable accommodation in virtually any city in the world. The paid version of one of the ultimate share businesses, Couch Surfing, AIRbnb home owners make a few dollars at the same time as meeting new people and forming connections. Many AIRbnb users choose to travel the AIRbnb way and stories are available all over the internet of people who’ve ended up in penthouses in Barcelona, or lush countryside homes in the south of France or trendy and conveniently located apartments in Paris, London or just about anywhere else.

“Last year we house sat in France for over 270 days straight. Even staying in very budget accommodation would have set us back close to six thousand euros.”
-James, frequent user of trustedhousesitters.com

There’s another version of AIRbnb for people looking to either get away for a couple of weeks or spend a whole year living abroad though – trustedhousesitters.com The only ‘catch’ if you can call it that is that you might end up looking after animals or tending a property. “Last year we house sat in France for over 270 days straight. This was made up of four different house sitting assignments (one was for five months) and during that time we looked after everything from cats and dogs to turtles and even a farm of alpacas. Even staying in very budget accommodation – say ten euros a night per person in a hostel – would have set us back close to six thousand euros,” says James, a house sitter who found assignments using trustedhousesitters.com and is still travelling through Spain while looking after other people’s houses and animals.

In the case of house-sitting, the home owner and house sitter don’t get monetary compensation, but both save on incidental costs involved in travel if they had to go the traditional route of booking accommodation or a professional pet-sitting service, for example. James also says that meeting home owners via Skype or Face Time was a good way to get to know the people whose house he would be looking after and made both parties feel more comfortable about the whole arrangement. “We also looked up each home on Google street view before arriving,” he adds.

When it comes to earning some income while house-sitting, James also says traditional travel work, such as fruit picking, might not be feasible. “There are also plenty of members who work for a number of months to save up and then house sit for another few months. I don’t think there’s necessarily a right way of doing things as it will depend on each person’s expertise and personal commitments, but without accommodation costs house sitting definitely opens up a lot more opportunities,” he adds. One happy customer, Charli earns an income while blogging about her house sitting assignments on her site, Wanderlusters. The site features house sitting FAQs, stories and useful hints and tips for those looking to start their rent-free year.

Because the site is run professionally and features extensive reviews and experiences, there aren’t as many ‘horror stories’ around about trustedhousesitters.com experiences (as compared to some couch surfing or AIRbnb stories, though there are means of resolving disputes with AIRbnb members and users can choose to only go for 5 star ratings and excellent reviews).

Roomz – www.roomz.com

If you’re looking for more permanent accommodation, but still want to find it through a share-business, you might want to try www.roomz.com. Roomz.com is a portal for housemates to find each other. The party with a room to rent lists on the website, and provides the price, accommodation details, whether bills are included and any other relevant details. The roommate looking for a place to stay chooses one they like and both parties sign a ‘shared living’ agreement, created and held with the website, with all the details of how the parties will share communal space and agree to live together.

Following an update to its pricing policy, as of August 2013 it is now completely free to list your room for rent with Roomz.com. Roomz.com also collects rent automatically and charges a 1.9% processing fee to the tenant on the rent collected. Deposits can be held in an escrow account. “Roomz is Australia’s only end-to-end experience for renting a room. Quite simply, Roomz makes living together easy,” explains roomz.com chief executive and co-founder Daniel Oertli. During the second half of August and the first half of September Roomz.com also decided to zero out all fees to customers as a special one off promotional event. Check the website for any further promotions or details.

4) E-commerce and fashion

FaceBuy – facebuy.com.au and The Clothing Exchange – clothingexchange.com.au

Woman using smartphone

“People look at eBay and don’t see it as young ‘cool’ or ‘fresh’ anymore. They think ‘it’s been around forever’ and use it because that’s the only option there and that’s what they know.”
-says 20 year old FaceBuy founder Stephen Chapman

When it comes to simply buying and selling, e-commerce is moving in a different direction from eBay, which is now 18 years old. With social media taking off the way it has, it was only a matter of time before someone came up with the platform to install a ‘buy’ function to facebook so that instead of posting photos of items for sale, or links to listings on external sites, and asking friends to message you for further details, the whole transaction can be done from inside facebook via PayPal. That’s now possible thanks to a new app called FaceBuy. “People look at eBay and don’t see it as young ‘cool’ or ‘fresh’ anymore. They think ‘it’s been around forever’ and use it because that’s the only option there and that’s what they know,” says 20 year old founder Stephen Chapman. “We want to provide people with the option so they don’t have to go to eBay for new tv’s or car parts [for example] and we will add in the sharing and social aspect as well.”

For Chapman the idea is to encourage more sharing, more swapping and buying and selling where friends promote listings from other friends on twitter and facebook. In that respect FaceBuy really acts as a conduit to connect buyers and sellers within the one platform. FaceBuy charges a $2 fee for items sold, and 30c of the selling price of each item.

Chapman says he got the idea for FaceBuy from his friends who were posting, particularly girls trying to sell dresses and clear the way to re-vamp their own wardrobe. “I’d see people, particularly girls, upload items and put the price in the comments, for example.”

Indeed clothes are a big area where we can spend on new made items that are worn once and stored in a cupboard. Not anymore though, thanks to businesses like FaceBuy and other websites such as The Clothing Exchange and even Open Shed making it easier than ever to let someone else give your favourite pieces a second life.

5) Finance and lending

SocietyOne – www.societyone.com.au

Lending and finance is another newer area for the ‘share business’ or peer to peer model as it’s known in a personal finance context. Like FaceBuy – peer to peer lender SocietyOne has decided to go mobile and capitalise on the growing number of smartphone users who are happy to transact on their phones. Already operating successfully on line for just under a year, the company introduced its SmartLoan mobile app at Finnovate Asia. SocietyOne co-founder Matt Symons cites research from Nielsen and Roy Morgan as evidence of the growth of mobile phone transactions. “Almost every authoritative research we’ve seen on the growth of mobile commerce, both on a global and local level, lists Australia among the countries in the world with the highest smartphone penetration,” he says. “Nielsen’s 2013 Mobile Consumer Report, for example, found that 86% of all Australians over the age of 16 use a mobile phone, one of the highest rates in the world. Of those, 65% owned a smartphone (Roy Morgan puts that number closer to 50%, which is still very significant on a global scale). Nielsen also found that Australians are among the most proficient in the world at using their smartphones for mobile banking (40%), after South Korea and China.”

Not only is SocietyOne Australia’s first peer to peer lending site, where investors bid for consumer loans keeping interest rates competitive for the borrower and offering a better return than a high interest savings account, the app is the first loan application, funding and approval process designed to work in under three minutes, with no offline process necessary. “This is a complete break from traditional mobile banking services that either optimise the display for mobile phones or simply automate some of the processes while the actual loan approval and funding can still take several weeks,” says Symons. The fact that so many of these businesses operate using new technology, or that transactions are made smoother with the use of smart phones or devices installed into cars, for example, only serves as evidence that the share business and the digital age go hand in hand.

Share businesses waiting for you to discover them find many many more at collaborativeconsumption.com.au.