Why buy that dress, movie, car or bike when you can rent?


Businesses like Netflix have fueled a culture of borrowers. (Justin Sullivan/GETTY IMAGES)
March 4, 2012

A power tie for a job interview, an educational puzzle for a teething 2-year-old, a dress for a White House gala. A decade ago, we bought these items at the mall. Today, we rent them with a smartphone.

Pay a monthly fee. Rent your object of desire. Return it when it bores or becomes useless. It’s easy, on-demand, noncommittal. Consumerism is being redefined for the mobile age, and the model is spreading among professionals and families in ways that were little anticipated, even by the venture capitalists funding this new era of cooperative capitalism.

Businesses such as Netflix, Zipcar and Capital Bikeshare have fueled this culture of borrowers and lenders. Experts have coined a term for the phenomenon: collaborative consumption. The sharing economy. It’s moving past Generation Y to reach a broader audience, just as a host of companies pave the way for the sharing of niche products.

“I’ve been renting the tartan plaid ties that are trendy right now,” said Masai McDougall, 29, a lawyer at the D.C. office of Bingham McCutchen. “It’s nice to try out styles without having to spend 100 bucks on a tie.” That’s the sensibility that drove native Washingtonians Zac Gittens, 28, and Otis Collins, 27, to create Tie Society in November.

The childhood friends run their business out of Gittens’s rowhouse in Adams Morgan. For a monthly minimum of $11, they mail members the sorts of designer ties found only in high-end department stores. Clients select organically sanitized ties from 300 styles. When a subscriber tires of the ties or wants to try a different style, he mails them back and selects more.

The start-up went from local to national in less than a month. Quaite Dodson, 21, a college student and Bank of America teller from Sierra Vista, Ariz., needed ties to wear to work, and he found the Netflix-style rental model perfect for an entry-level salary. “I found it on Reddit and joined. . . . I’m not a corporate big fish yet, and you need to dress for the position you want, so Tie Society gave me a better selection of designer ties than what I normally get at Macy’s,” Dodson said.

It was convenience — not cost — that drew Juliet Teimoori to rent educational toys online. “The biggest draw for me was that it helped get rid of the clutter,” said Teimoori, 31, an account executive from Albany, N.Y., who recently signed up for a subscription to the two-month-old Spark Box for daughter Della, 3.

For $23 a month, the company delivers a box of educational, creative and, yes, sanitized toys to your doorstep. The roller-ball shape sorters or “Mozart Magic Cubes” are tailored to a child’s learning style. When little Suzy has mastered them, ship them back and get a new assortment.

It’s a concept that Teimoori is buying into — or at least renting.

“These companies couldn’t have existed five or 10 years ago . . . without the ubiquity of an increasingly mobile Internet,” said former AOL chairman Steve Case, founder of Revolution, a Washington-based investment firm that has stakes in Zipcar and LivingSocial.

Entrepreneur Magazine valued the ride-sharing industry at $117 billion and the product-rental market at $85 billion. But in an era of virtual over-sharing, doesn’t all this push the paradigm a bit too far?

Quickly growing

Not in the minds of Alice Wang, 30, and Pegah Ebrahimi, 31, who founded Spark Box late last year.

“We saw the idea of Netflix as very applicable to educational toys,” Wang said. “Once we see a movie, its value plummets. It’s the same with toys. Toys are very critical at one stage and become obsolete very quickly.”

But the sanitation. The germ-spreading. Don’t parents worry?

“My oldest son is diabetic, so I was concerned with how the toys were cleaned,” Teimoori said. “But I talked with the company, and they described the process and how they’re packaged” through a five-step organic process. “They allayed all my concerns.”

Since January, Spark Box has tripled its membership and expects to reach profitability by year’s end.

Tie Society, too, is having early success, doubling its membership in one month, and continuing to grow through word-of-mouth advertising — on Twitter, of course. Gittens says 20 percent of customers are local, and while most members are young, professional men, Tie Society counts women and retirees among its clients, too.

“We know the service is niche. Our market is smaller than movies,” Gittens said. “A good number of men have to wear ties and don’t want to invest in a collection. The majority of our members are young professionals entering the workforce. . . . The service works for them.”

“We have one member who’s in medical school, and he’s going on interviews for residency,” said Collins of a local subscriber. “He needed ties for a couple months. Instead of spending $300 on five ties, he could be a member for six months and use them when he needs them.”

Bill Burris, too, saw the value of renting essentials on demand and founded Rent Our Boxes, an eco-friendly moving-box company. He started the company in 2010 after he “got tired of getting ripped off on moving boxes.”

He came up with the idea after his wife died. “I couldn’t even find the boxes we needed, and when I did, I ended up spending $495 on them. . . . I just thought ‘There has to be a better way.’ ” The D.C.-based company, which also serves Virginia and Baltimore, began franchising in November and plans to expand this year.

Cost-saving reasons prompt women in Washington to use established designer dress rental services. “I used Rent the Runway for the White House correspondents dinner,” said Angie Goff, an NBC4 news anchor. “With all the engagements that come with the job, it’s silly to buy a new dress every time. And I wore Halston! I’ll never have the chance to buy a Halston gown, but 100 bucks to feel good? Sure, I’ll rent it.”

Owning less

All this sharing seems to defy another deep-seated American value: ownership. We were once a country of garage sales and oversize closets. But collaborative consumption mirrors a cultural change, a shift cemented in the past decade by tech whizzes in dorm rooms. The rise of the sharing economy is deeply intertwined with our over-sharing society. We’re revising the privacy settings of our real lives, too.

“Facebook shifted the cultural norm of how much information you share in a big way,” said Craig Shapiro, founder of Collaborative Fund, a venture capital fund that invests in companies that subscribe to the sharing ethos. “In only one generation, we’ve applied this idea of sharing offline, and it’s become socially acceptable to share . . . the most personal of things.”

Which is why it doesn’t seem weird to share ties and toys with strangers. You’ve already shared your sonogram with 4,317 of your closest Facebook friends.

“It’s partly generational: The millennials are likely to be the earliest adopters of these companies,” Case said. “But there are also economic drivers and a concern for the environment that have created this sort of perfect storm that resulted in . . . these businesses developing so quickly.”

Whether all of these boutique businesses survive, investors agree that over-the-Internet-back-fence sharing is here to stay. “It’s like the lights went on at the party,” Shapiro said. “Now everyone with an idea is applying these sharing models to specific industries, and many are having success.”

“We’re still in the relatively early phase, but a revolution is occurring,” Case echoed. “In the next five or 10 years, we’re fastening our seat belt and getting ready for the ride.”

In a Zipcar, of course.

Katherine Boyle reports on arts, museums and culture for the Style section.
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