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The Rise of the Gen Y 'Sharing Economy'

Posted: 07/07/11 08:29 PM ET

I was an only child and loved it. There was a brief time when, at age 5, I told my parents I wanted a little sister. When my mom informed me that if I had a sibling, I would have to share all my toys, even my favorite ones, that was the last of my wanting a baby sister.

Call me selfish, but in my defense, I'm a Gen Xer (born between 1965 and 1981). Most of us were raised as latchkey kids with both parents working. Fifty percent of us are products of divorce, and due to the advent of birth control and the women's movement in the '60s, many of us were only children. We are known for our independence and are the quintessential "me" generation.

On the other hand, Generation Y (people born between 1981 and 1995) were raised by aging Baby Boomers -- soccer moms and stay-at-home dads. They've been taught to get along with their brothers and sisters, play fair, and be team players. If Generation X is independent, Generation Y is interdependent. For them, hanging out in groups has taken the place of traditional dating. They go everywhere together and even apply for jobs together. It's almost a throwback to their parents' experiments in communal living back in the '60s. And they seem to have embraced the idea that sharing material goods is better than owning them.

Like many today, high unemployment, the housing bubble, environmental distress and the scandal surrounding Wall Street have frustrated Gen Yers. In a backlash, Gen Yers are reevaluating standard methods of living and questioning traditional success status symbols.

Facilitated by the ease of connecting through the Internet, Gen Yers are shunning the idea that ownership equates to achievement, and this has given rise to the Sharing Economy.

Why Buy New When You Can Swap?

ThredUp.com is a children's toy and clothing swap site. ThredUp gives parents another option to buying expensive new children's clothes that will be outgrown in less than six months. According to the site, the idea originated one night on a napkin over a beer.

The site allows parents to buy a box of toys or gently used children's clothes for five dollars. The site categorizes the boxes of goods by age, gender, types of clothing and even clothing designer, with the seller's name listed prominently next to the box. The buyer can look at reviews of the sellers' past boxes posted on the site by previous buyers. ThredUp customers follow guidelines to ensure that each box is filled with quality goods. Violate the policy and you risk being banned from the swapping process. There is a seller ranking system that gives sellers bonus points for a variety of categories such as boxes with the most stylish clothing.

What differentiates ThredUp.com from other used children's clothing stores is that each buyer is asked to list a box of their own child's outgrown clothing on the site in exchange for purchasing a box.

Why Lease Long-Term When You Can Let For As Little Time As You Want?

An iPhone app called LiquidSpace matches unused or underutilized office space with people looking for a temporary place to work. These range from people on the road who need a more convenient place than a hotel lobby to get work done, to the person with a home office who needs a conference room for an important sales meeting. Anyone needing workspace can go to their LiquidSpace app and find the space they need on short notice with very little effort.

The space can be a public place such as a library, a building that rents by the hour, or a piece of commercial property lacking a permanent resident.

The consumer can rent time from 15 minutes to all day and invite their coworkers to join them. The customer can also specify certain requirements, such as access to a copier or a landline. The owners of the office space issues passes to the users and can decide not to let people return who treat their space like a dorm room.

Why Change Your Oil When You Can Just Change The Car?

The second most costly expenditure most of us make after our homes is our car. However, it is estimated that our cars are still idle almost 90 percent of the time. Sites like Getaround.com make it possible to share our cars with people in our community.

You can bypass car ownership entirely and rent a car on an as-needed basis for as short a time period as an hour, for fewer than $6. As a car owner you can turn your car into a revenue source by renting your car out when otherwise it would be sitting in the garage.

The company verifies that all drivers and vehicles meet certain standards. The company also carries insurance, lowering the risk for both parties. An app on your phone will give you the car location and a code that will unlock the car with the keys waiting inside. Drive the car for the needed time and return it to its original location. Following each rental, the renter and the rentee fill out an evaluation on the experience.

According to the site, finding a car to rent is as easy as buying something on Amazon.

Why Own When You Can Share?

It is predicted that the Sharing Economy is going to eat away at 10 percent of traditional retailer's revenue and generate more than $110 billion. As sharing Gen Yers dampen the demand for buying only new items, organizations may want to reexamine their product configuration to include items for purchase and a profitable system that allows their customers access to the products minus the commitment of ownership.

Connected Gen Yers have turned sharing from something we were taught to do as children into a new way of saving and making money. If we are going to thrive moving forward, everyone from big business to individuals will need to learn to share and share alike.

Larry Comments

This sharing concept is catching hold in cutting-edge companies that employ large numbers of Gen Yers. At Google, young engineers work in self-directed project teams that have access to the entire company's resource base through Google's intranet system called Moma (supposedly named for New York City's Museum of Modern Art because it contains so many masterpieces of information). If a team needs help with a project problem, they can access the help they need in an instant without having to plow through channels or contend with bureaucracy.

They also have an internal blogging system call B.I.G. (Blogger In Google), which enables all employees to share and comment on everything they are doing.

Innovation is usually the offspring of seeing someone else's idea and then embellishing it. For example, it was Apple who enlarged on Xerox's idea of using a mouse and icons to navigate around a computer. In many companies, innovative ideas are guarded and kept secret for fear of their leaking to competitors. At Google, innovation is made public within the company so it can nurture more innovation. To a great degree, the great strides in innovation that Google has made since Sergey Brin and Larry Page started it in 1998 can be thought of as an application of the Group Economy in the running of a business. And since the majority of Google employees are young Gen Yers, it suits them just fine and partially explains why Google was ranked fourth in this year's Fortune magazine list of the 100 Best Companies to Work For.