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Over the last six years I’ve seen many commercial attempts to make sharing or fractional ownership work, particularly for boats and property. Very few are still in business. The time seems right for this, but the commercial schemes, generally for two to six partners, have two fundamental flaws. They try to:
- find a solution that fits all, particularly allocating dates
- prevent the potential owners from meeting before the sale is made
Consider this scenario, a holiday homes’ company is selling quarter shares and has allocated each share every fourth week in rotation. The first potential customers have school-age children and want three weeks together in peak season. The next couple avoid travelling in school holidays but want 2-3 weeks in both May-June and September-October. The next person is interested in a whole month at both the beginning and end of the year. Hard on their heels are a couple who would like occasional dates throughout the year; they want to use the property at short notice if available.
None of these prospective buyers fits the fixed model. But if they sat down together, I think there is sufficient compatibility to enable a deal to be done. I’m exaggerating, but you get the picture.
The second flaw is even bigger. I wouldn’t even contemplate buying a share without meeting the other buyers. I’d want to be convinced that my fellow owners had similar values, that I could trust them and happily work matters out in future should something go wrong.
Is there an alternative? I think there is, but I haven’t seen anyone doing it yet. I think I could offer a process where people register their interest and indicate their key requirements, followed by matching and facilitation to introduce the potential partners, create a syndicate and manage it if required.
If you are selling holiday accommodation, boats, motorhomes or other big ticket items which could be owned and managed by a private syndicate, I’d be interested to speak to you. Maybe together we could make it work.
Last night’s edition of Channel 4′s Location, location, location with Kirsty Allsopp and Phil Spencer was interesting as it showed three friends buying a property in London together.
What I particularly liked was this was a sensible look at the shared option, with the neither the pros or cons sensationalised, just simply laid out. It struck me that the three friends had thought about it carefully and it was likely to work well for them. It would be very interesting to go back to see how they get on after a year.
I’m always a bit concerned by young first time buyers buying together: often money is extremely tight and they try to cut corners with insufficient legal advice, their careers are moving swiftly so they may need to move on within a year or two, and they simply lack the wisdom to think everything through. In this case, the three friends were older, had evidentally thought things through and understood the compromises that they were prepared to make.
The point that the friends need their solicitors to draw up a Trust Deed was clearly made, defining exactly how the sharing arrangement will work, and particularly the exit strategy.
Looking back at 2011, one the biggest areas of change has been sharing cars (sharing the ownership of cars rather than the equally important lift sharing). Cars represent a huge opportunity for sharing because of the number of very expensive assets which spend the vast proportion of their time unused. Shared ownership of cars used to be relatively difficult to manage. Until recently most shared cars were in private syndicates, predominantly set up to own sports, classic or super cars.
Often the owners had found each other through car owners’ clubs. Because the cars are used infrequently, it is relatively easy to work out when the owners can use the car. The owners are also usually relatively wealthy and relieved simply to reduce the costs and responsibilities of ownership, so apportioning costs is fairly straightforward.
Car clubs like Zipcar and City Car Club have been gathering momentum for some time in the UK, USA and across Europe: the recession has definitely helped them. Car clubs bring people together around a car and manage all aspects of the shared ownership. But they generally operate in cities and suburbs. There are small car clubs in towns and rural areas, but few survive long.
A different model was required if car sharing was to hit the mainstream and I believe this has recently emerged with peer-to-peer rental. This allows people to advertise their car for hire by the hour, day or month. Like ebay, Couchsurfing and many collaborative consumption services, these systems depend upon reviews to develop the necessary trust systems. The owner reviews how well the renter looks after the car: cleanliness, tidiness, petrol as agreed, timeliness of return. Similarly the renter reviews the owner: was the car as advertised, clean, tidy, available etc.
RelayRides in the USA and WhipCar in the UK have forged the peer-to-peer car sharing way forward. In the USA, RelayRides led a change in the law in California to enable peer-to-peer rental: previous laws classified it as normal car hire and effectively made it impossible. HiGear is also pioneering peer-to-peer rental of luxury cars in the USA.
Finally the major car manufacturers are now getting involved. They probably hoped they wouldn’t have to, but they realise that car sharing may become mainstream and if they aren’t part of it, they will suffer. They also know that a shared car is often a person’s first car and they will be looking to hook them to their brand for life. Daimler has a new electric car club called car2go; Ford supplies many cars to Zipcar; BMW and Sixt car rental have created DriveNow car club (German); and Renault supplies Hertz On Demand (a hybrid of car hire and car club).
For more about sharing cars.
Over the last five years there has been an increase in tenants letting accommodation on a Monday to Friday basis. Usually these are people who work away from home and had become fed up with living in hotels or bed and breakfasts all week.
There are some major advantages for Monday to Friday landlords compared with full-time tenants:
- Use of the room at weekends
- Lodger tends to bring a lot less stuff – just what they need for the weekend
- Their house isn’t the lodger’s permanent residence.
Some people working away from home have made a long term commitment to this way of life and buy a small apartment in which to live during the week.
Have any of these people considered letting their accommodation at the weekends when they aren’t there? One recent ad on yours2share is looking for somewhere more “permanent” to stay at weekends only. The advertiser lives in Manchester, but his girlfriend lives in Sheffield and he wants a base in Sheffield for the weekends.
Many people regularly visit a place at weekends, staying in hotels, B&Bs, even friends’ sofas. There are two main reasons:
- visiting children living with an ex
- visiting elderly relatives
But visiting sweethearts is equally valid. So is simply having a second home – for fun! When I moved to Norfolk, a rural county in England about two hours north east of London, I soon found that one place in which many Norfolk people wanted to own a second home was London (interestingly many of them have second homes on their own coast). I personally would be very interested in having a base in London that I could use at weekends, but I was surprised to find that I was not on my own.
If these situations are so common, why aren’t more people sharing? I think it is simply because there are no services other to yours2share that can accommodate this and it isn’t a well known service, so it doesn’t occur to people to ask.
Sharing, or “Collaborative Consumption” as it is often now called, really started to gain traction in 2011. I started yours2share in 2006 and frankly most people thought I was insane. Now I hear about new sharing related websites daily and it seems like all my friends and relations are busy Couchsurfing, AirBnB-ing, freecycling, car clubbing, co-working etc. If you want to know more about Collaborative Consumption, I highly recommend Rachel Botsman and Roo Roger’s book “What’s Mine Is Yours: How Collaborative Consumption is Changing the Way We Live”
I am now heavily involved in several other areas of collaborative consumption as well as yours2share. I run a co-working group Norwich Jelly which enables homeworkers, freelancers, self employed and anyone working on their own to co-work together once a month in Norwich, Norfolk. This is part of an international network of Jellys. Most people, like me, work on their own from home, but we’ve seen an increase in professional people with full time jobs based entirely home. Everyone appreciates a day when they can interact with people, laugh a little and share ideas, hints and tips.
I’ve also helped to set up a LETS (Local Exchange Trading System) in the Chet Valley, my local area of Norfolk, which enables local people to trade goods and services for a local “virtual” currency. Our system is still very new, but I’m encouraged at the enthusiasm with which it has been greeted so far.
Finally, we’ve had a few more couchsurfing visitors and they’ve all been a pleasure to have staying with us. We are planning trips to Berlin and to Italy next year and I’m hoping to surf a few couches whilst we are there!
And on that note, I’ll wish a healthy, happy and collaborative New Year.
Last night I went to Transition Norwich’s third birthday celebration to hear Rob Hopkins of the Transition Network speak. He’s a very good speaker and the messages were clear:
- Sustainability makes sense, however you look at the future
- Work towards sustainabiity and resilience improves
- The route to sustainability is different for each community
- The best way to work out how to make it work is to try things out and find out what works for your community
- There are many aspects to sustainability: reducing energy use, local food, local currencies, community building, developing skills, co-housing
Rob Hopkins has written several books about transition towns and how to start, the latest is The Transition Companion: Making Your Community More Resilient in Uncertain Times . I’m waiting for my copy to arrive, I’ll review it here in a week or two.
Interesting interview of Lauren Anderson, Innovation Director at Collaborative Consumption, a hub dedicated to swapping, sharing, bartering, trading and renting, by Andrew Keen of TechCrunch, a high tech magazine website, as she explains why collaborative consumption could be as significant as the Industrial Revolution.
We’ve a great new boat sharing case study, Andrew A has sold a share in his Fairline Phantom 48 based in Mallorca, to create a new private syndicate using Net Lawman’s contract templates. Read about it here.
The second of two posts about ways that sharing can help people find suitable accomodation solutions, specificaly looking at:
Housing co-operatives
For those who want to move on from the house/flat/home share scenario, who need more space and somewhere long term to live, and who may have children too, the options are getting ever more constrained. Even if they can pay the mortgage, have they got the deposit? Is their credit rating good enough? Is the bank feeling helpful today.
One route forward is to get together with a group of like-minded people and families, and buy a large property together. One mechanism which protects everyone (in what can be a complex legal and financial situation) is to form a not-for-profit, fully mutual co-operative which purchases the property. Each person pays rents to the co-operative, which is used to pay the mortgage taken out by the co-operative. This arrangement makes it easier for people to leave/join, but also gives the “tenants” total control upon the property.
The end result is that people have a way of affording a decent living space, usually with a bigger garden and living area, often in a better location. There may also be other benefits such as helping each other with childcare etc. Radical Routes website has some good information and they also lend money to housing co-operatives to form the deposit. They are rightly very demanding of potential housing co-operatives; they want clear evidence that people have discussed all the possibilities and fully understand what they are doing.
Homeshare and housing co-operatives won’t work for everyone and they need careful consideration, but I can see both growing steadily over the next few years.
Many people are struggling with housing costs, whether they want to rent or buy. Students and recent graduates are having a particularly hard time. If they want to buy in the future they need to save, but rents are so high that this can be impossible. Families with young children are also finding it difficult to afford bigger houses to accommodate their needs.
Two completely different strategies offer ways forward.
Homeshare
Whilst 20-somethings are looking for somewhere reasonable to rent in the cities as well as enabling them to save, many elderly but fit people would like to continue living in their family house. But they often need some help shopping and cleaning as well as some company and conversation. It doesn’t require a big leap in imagination to see the potential win-win here.
Homeshare explains how this works and gives details of homeshare programmes across the world. Programmes are run by not-for-profit agencies and the people running them usually have a background in social work. All the agencies work differently, but they all manage the application process and most screen the applicants and personally match people. I’m surprised that there aren’t even more Homeshare programmes, I think there should be at least one in every county and city.
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