rethink sustainability
The CLIC® Chronicles: Pioneering circularity - the rise of the sharing economy for everyday items
For just one use a year, many would baulk at the idea of paying hundreds of euros for a gazebo. Or a steam cleaner for the driveway. Or a karaoke machine for a one off singalong at a party. Now there is a solution – the option to rent important items that are only used occasionally via an online platform for a fraction of the price.
As part of the rapid growth of the sharing economy, which is projected to grow to $335bn by 20251, a number of companies across the US and Europe are renting out everyday items on a daily, weekly or monthly basis. Some hold a bank of stock themselves, refurbishing items when necessary, while others operate platforms for owners to earn some extra cash by renting out their belongings.
A suite of computers for an office, a high-end games console for the holidays, power tools for a home renovation or a chocolate fountain for a dinner party - all are available in this latest chapter of the sharing economy. For the consumer, the advantage is clear - avoiding large bills for big-ticket items which will be used only occasionally without storage or repair worries.
The subscription model for high-end tech
Among the first companies to experiment with such a model was German startup Grover, which rents out new and "as new" digital technology such as drones, laptops, smart watches and tablets on a monthly subscription (a new MacBook Air starts from $44.90 per month to rent). The longer you rent the lower the price, with the option of purchase using funds already paid as part of the subscription.
Founded in 2015, Grover aims to give people affordable access to high-end tech while reducing global e-waste, estimated to hit 57.4 million metric tonnes in 20212. After expanding to Austria, the Netherlands and Spain, by 2021 the company was renting out almost a quarter of a million products and went on to raise $1bn to begin a rollout into the US3. The expansion is expected to increase product circulations to five million by 2024, while saving 24,000 tonnes of e-waste. The rental model means that, rather than buying a new tech product and then sending it to landfill when the latest upgrade comes out, the hardware can be rented as and when needed. Once returned, products are refurbished and recirculated, and when they do reach the end of their lifecycle, Grover ensures that the materials are reused or recycled. According to Grover's new head of US operations, Andrew Draft: "We have the ability to provide Americans with a solution to save and spend money smarter on consumer tech that they need, while circulating and refurbishing products to keep our efforts sustainable and long-lasting."
Read also: The CLIC® Chronicles: 10 ways to build a circular economy and the companies leading the way
Why buy when you can rent?
In the UK, WhyBuy works to a similar model, offering a wider range of everyday items, from kitchen gadgets and appliances to party equipment, tools and children's toys. Currently covering the London area, the company owns or sources these products and provides a specially prepared one-page setup guide with every rental. In 2019, WhyBuy received £300,000 of pre-launch funding via Seedrs4, and went on to raise an additional £1.32m in June 20215. The startup has partnered with supermarket Tesco, opening a bricks-and-mortar outlet at the Surrey Quays branch in London, where consumers can browse and rent a selection of popular items at a 20% discount. "[In the future], renting will become the norm," said the company's Chief Commercial Officer, James Welch6. "WhyBuy is set up to make it easy for people to embrace this future sooner rather than later."
Business models like Grover's and WhyBuy's dramatically cut carbon emissions by allowing goods to circulate and reducing e-waste. They also align sustainability with profitability, as companies boost their bottom line by repeatedly recovering the value of items.
The peer-to-peer sharing model
Other item sharing startups work with a slightly different model. In Switzerland, Sharely provides a platform that lets owners upload photos and descriptions of their items available to rent, and receive requests directly from interested parties. Payment is processed via the platform, with Sharely taking a 20% commission and providing collection and delivery. With over 45,000 users and 28,000 objects available for rent, the company is Switzerland's largest platform of its kind since it was started in 2013. CEO, Lucie Rein, secured CHF 660,000 in funding and his future plans include providing traditional rental companies, such as ski suppliers, with a ready-made rental platform.
Read also: The CLICTM Chronicles: Now you can subscribe to a new sofa – the rise of furniture rentals
A post-pandemic cultural shift
The pandemic has prompted people to try out new hobbies, intensify their use of technology, and host gatherings at home rather than meet in crowded public places. All three companies have benefited as a result. Grover's revenue grew by 150% in 20207, and WhyBuy launched in mid-2020 after noticing demand for entertainment related rentals8. As Sharely's Dominique Locher, said: “The pandemic has given the circular economy another boost."9
For investors, this new tranche of companies offer a fresh opportunity as a result of the pandemic. Those within the industry suggest that 'sharing is the new consumption' and although others within the sharing economy struggled during the peaks of lockdowns, this new generation of firms which are hinged on changing consumer habits have caught the eye of investors.
As consumers become more environmentally aware, sharing platforms provide a way to enjoy luxury, top-of-the-range items in a more sustainable, circular way. At the same time, the ease and price of renting is encouraging more and more people to consider it as an alternative to ownership. Sharely CEO Lucie Rein said: “We cannot hope that people will rent something from us just because it is more sustainable. The most important drivers for consumption are convenience and value for money – that's the only way to reach the masses."10
1 https://www.forbes.com/sites/forbeslacouncil/2019/03/04/the-sharing-economy-is-still-growing-and-businesses-should-take-note/
2 https://www.weforum.org/agenda/2021/10/2021-years-e-waste-outweigh-great-wall-of-china/
3 http://press.grover.com/149859-grover-secures-1bn-to-democratize-access-to-consumer-tech
4 https://www.seedrs.com/whybuy/
5 https://pitchbook.com/profiles/company/464344-21#overview
6 https://www.linkedin.com/pulse/rental-revolution-coming-whybuy-owns-100s-products-so-james-welch/
7 http://press.grover.com/156737-grover-global-leader-for-renting-consumer-electronics-launches-in-the-united-states-to-democratize-access-to-premium-consumer-technology
8 https://www.whybuy.app/introducing-whybuy/
9 https://www.handelszeitung.ch/unternehmen/sharely-mit-finanzierungsrunde-und-neuen-investoren
10 https://www.nzz.ch/wirtschaft/sharely-ceo-lucie-rein-wir-muessen-mehr-bieten-als-nachhaltig
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