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Peer-to-peer renting refers to the process of an individual renting an owned good, service, or property to another individual. It is also referred to as Person-to-Person rental, P2P renting, Collaborative Consumption, the sharing economy and Product Service System. The term is mainly used to describe online enabled rental transactions between individuals.
Individuals have been renting from each other for decades, particularly in the real estate domain, however, with the Internet acting as a facilitator, there is a growing trend of websites that offer to facilitate peer-to-peer rental transactions. All of these sites are encouraging something academics call collaborative consumption — in other words, peer-to-peer sharing or renting. The trend is taking off partly as a result of the recession; renting something you don't need to use very often makes a lot more sense than buying it and letting it collect dust in your garage. There's a green aspect as well, since sharing helps cut down on overall use of resources. But one of collaborative consumption's most surprising benefits turns out to be social. In an era when families are scattered around the country and we may not know the people down the street from us, sharing things — even with strangers we've just met online — allows us to make meaningful connections.
The term Peer-to-peer renting is inspired from the computer networking term Peer-to-peer, which allows cumulative network bandwidth through direct and multiple connectivity between users. With the development of the Internet on one hand and of the Social Networks on the other hand, online tools and services tend to have more and more usability and impact in the actual world. Peer-to-peer lending, Peer to peer banking and Peer-to-peer renting are three examples of actual transactions between individuals, enabled and empowered by virtual services.
The fast development of this market is due to a combination of the following trends:
- Networking infrastructure and high-bandwidth penetration reaching a level allowing social networks and consumer-to-consumer marketplaces
- Limited storage space in dense urban environment preventing consumers from keeping all the goods they occasionally use
- Increasing environmental concerns of consumers leading towards limitations of waste of resources and over-consumption
- Evolution of consuming behaviors from owners to users
Peer-to-peer renting services and platforms are usually online marketplaces connecting individuals and enabling rental transactions between them. Peer-to-peer marketplaces are an evolution from the traditional Business-to-business marketplaces (also referred to as B2B), and Business-to-consumer marketplaces (also referred to as B2C). These latter B2B or B2C marketplaces have been developed, some remaining operational, since 2000. For instance, the European B2C marketplace erento has been operating since 2003 and is dedicated to the rental business, but does not allow peer-to-peer renting transactions.
Peer-to-peer renting services and platforms started appearing between 2000 and 2001, and were short-lived. Since 2006, various platforms have been launched in all parts of the world, and with today's economy, have seen rapid growth in popularity over the past several years.
- Collaborative consumption
- Sharing economy
- Social peer-to-peer processes
- Peer-to-peer carsharing
- Peer-to-peer property rental
Notes and references
- Walsh, Bryan (5 December 2010). "Borrow Don't Buy: Websites That Let Strangers Share". Time. Retrieved 7 July 2011.
- Johnston, Susan. "May I Rent Your Lawn Mower? Sharing Meets Web 2.0". Mint Financial. Retrieved 7 July 2011.