There’s an old saying that if you like sailing, don’t buy a boat, just make friends with someone who owns one. That saying goes a long way towards describing one of the most interesting long-term cultural shifts underway. Ownership is becoming less of a benefit across a variety of goods and services. That’s particularly interesting because ownership used to seem like such a bedrock of our genetic makeup. Like a toddler proclaiming “mine,” it’s deep in the human psychology to declare what’s ours.
Yet the trend away from ownership is unmistakable. The valuation of Uber isn’t based on replacing taxis but on replacing car ownership. With an increasing percentage of the world’s population moving into cities, there’s less appetite for the rising costs of individual car ownership. Pride of ownership has been deeply rooted in our homes for generations. Yet home ownership is falling among millennials. The recession and related mortgage crisis were the original explanation, but rental prices have risen significantly in the past two years and the trend continues. Airbnb is focused on vacation and short-term rentals for now, but it’s clear long-term mission is the Uberization of housing as well.
The trend trickles down through numerous categories. The rise of the cloud has made software ownership obsolete. Businesses and consumers alike now see it as less useful to have software on their own computers. The ability to access software from anywhere and avoid the hassle of upgrades and backups make it a preferred option. Music is yet another example. iTunes is scrambling to develop their own streaming Beats service as they’ve watched their once revolutionary purchase model lose share to Pandora and Spotify users. The benefits of ownership have been supplanted by the benefits of access. Being able to get a ride in minutes to wherever I want to go is more important than owning a car. Being able to listen to my favorite band whenever I want is more important than having them in my personal music collection.
Interestingly, this is a trend that often moves from the bottom up economically. The path to Uber started with car leasing in the 1980s as a way to give people the means to drive cars they otherwise couldn’t afford. But when the trend moves up to premium items, it’s less about avoiding cost constraints than avoiding the constraints of ownership. One source calculates that it takes a family over three years (600 loads) to justify purchasing a washer and dryer. If companies make it cheaper and more convenient to do your laundry on their machines, why bother? This hints at how this trend will impact every consumer durable. In this light, we’ll see access overtake ownership in appliances (Lavanda), clothing (Crossroads Trading), and furniture (Furlenco). People will increasingly switch among homes and the things in them with the same mindset they apply to switching tracks on their Pandora soundtrack.
The Ryan Report 