More than ever before, people are renting their way to the American Dream. According to Zumper’s 2021 State of the American Renter, 35% of Americans have no ambitions to own a home. The demand for commitment-free living is exploding, from homes to furniture, cars, art, clothing, and more.
On Wednesday, January 19th, 2022, Zumper hosted a roundtable conversation with key players in the sharing economy to discuss this increased demand for renting and flexible living, and where the industry is going next.
Moderated by journalist Joel Stein, five panelists—Anthemos Georgiades, CEO and Co-founder of Zumper, Kristin Toth, COO of the direct-to-consumer furniture and decor service Fernish, Mio Asatani, Founder & CEO of Curina, a rent-to-own proprietor for art, John Kim, President of the vacation rental platform VRBO, and Andrew Mok, the CMO of Turo, the world’s largest peer-to-peer car sharing marketplace—discussed the trends and issues in the rental economy and what to expect in its future.
Some of the key highlights from the hour-long conversation include:
Renting eliminates financial stress and exclusivity associated with ownership, for both suppliers and renters
“The average car sits idle 95% of the time. It’s a crazy waste of resources,” said Andrew Mok, Turo CMO.
Major purchases like houses and cars are often financially unaffordable for today’s consumers, and wildly expensive to maintain for those who do own them. The cost of car upkeep, or mortgage and property taxes of a second home, can be offset by renting out these items during periods of unuse. This facilitates the demand for those consumers who can’t afford these items or want the flexibility, financial and otherwise, to access that which is unavailable.
Founder & CEO of Curina, Mio Asatani, knows that expensive can also mean exclusive. Historically, art has been a costly item purchased almost exclusively through galleries. Business professionals in their 30s and 40s—“We call them HENRYs: High earners not rich yet”—who don’t have a background in art and might not know where to start their search, can rent art for their walls before purchasing. Should they later decide to buy, they’ll spend a fraction of price they would in a gallery. “Art is so emotional. You want to connect with it in person and live with it and then commit later.”
Life changes all the time. Flexibility is crucial to adapting to and acquiring the lifestyle you want
The rise of remote work has led to a boom in demand for flexible leasing and living. “People want to getaway. The idea is not just for vacation, but I can work from anywhere,” said President of VRBO, John Kim.
As Anthemos Georgiades, Zumper CEO, noted, “Residentry and hospitality are meeting in the middle, and we’re bringing those people together. People want to do a six-month stay in Napa, and they don’t want to own in Napa, but they want to work from there…[We need to] support them in the extended period time where they want to stay loose.”
As our homes become schools and offices in addition to our places of rest, and as the work-from-anywhere trend continues to grow, renters are looking for more options to better adjust to life’s changes more quickly. As Kristin Toth, CEO of Fernish, said, “Life changes all the time, and your home should adapt to you…We’re giving people flexibility so you don’t feel like renting is a ‘bad decision.’”
Trust has to be built into rental technology, and constantly evolve
Trust in our fellow Americans is not as strong as it once was, but the sharing economy is built on trust. With eroded faith in each other, it’s more crucial now than ever to leverage technology that upholds trust in the sharing economy.
One major key is to underpin your marketplace with tools that build that trust into the product. Georgiades said, “There’s an onus on us to provide trust on both sides of the transaction. You’ve got to evolve.” Tools for fraud and identity verification have gotten better, and continue to improve, but one of Turo’s core beliefs is that people are fundamentally good. “Some people may think this is naive, but generally people are good. It’s up to us to facilitate that trust as much as possible,” said Mok.
VRBO’s Kim echoed the sentiment that the majority of people are good, reporting that less than 1% of his users would be considered “bad apples.” But there needs to be recourse for those who do break the trust renters need. “People have to understand that reputation lasts for a long time.”
For consumers, sustainability used to be a ‘nice to have’ when making purchases, but is becoming a larger part of their decision-making process
As Toth said, “As awareness grows, sustainability will become a larger part of the consideration for consumers.”
For the last few years, there’s been a growing interest in purchasing and patronizing businesses that have sustainable practices. As we move into a world where GenZ has more purchasing power, that desire will continue to grow. “Gen Z is all in on sustainability. They really want their products to be ethical and have a mission,” said Kim.
Consumers who care about the environment still make their decisions based on what makes personal economic sense, but with ownership costs as high as they are, the sustainability inherent in renting is yet another reason to participate in the rental economy.
“It has to make environmental sense and personal economic sense. In general, it’s making more economic sense for people to rent EVs. 7% of our new listings are electric vehicles, as compared to 2% of EV adoption in the US,” said Mok.
With the development of Web 3.0 comes fractional ownership, but that isn’t a threat to the sharing economy—it’s a part of its future
Even though the sharing economy demonstrates a greater interest in flexibility and experiences over ownership, some technology trends, like the growing interest in NFTs, demonstrate a demand for ownership, even if that ownership is fractional.
While that appears to be contradictory to renting, it provides an opportunity for the sharing economy to grow and adapt.
“The crypto world would see Zumper as a Web 2.0 company. But there’s an opportunity for all of us on this call to build a Web 3.0 experience,” said Georgiades. That could take a number of different forms, but ownership of major items—like homes or cars—to then rent out wouldn’t be left to those who have the financial means for upfront purchase. There’s plenty of room to explore this as the future of the web and of cryptocurrency develop. “A Web2 company making Web3 investments makes sense. But for a Web2 company to become a Web3 company overnight isn’t possible,” said Kim.
To hear more from the panelists, watch the full conversation here.
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