When vandals broke into Stephanie Ciancio’s vehicle in 2014 and stole her car stereo, she did not have time and money to replace it. It was particularly vexing for Ciancio, a 34-year-old San Francisco resident, because she had planned to take a four-day road trip to Fern Canyon, Calif., over the long July 4 weekend, and the idea of making the eight-hour drive without music was depressing.
So she logged on Peerby.com, typed in her predicament, and within 40 minutes was connected with someone willing to lend her a Beats wireless Bluetooth speaker for her car trip.
“I thought, ‘Oh, my God, it’s so easy,’ and it was free!” Ciancio said. “It was easier and faster than buying one or ordering one on Amazon.”
Ciancio is among a growing number of people who are using mobile apps to find, borrow or rent items as diverse as power drills and drones from people living nearby. It is an extension of the successful Airbnb, Uber and Lyft model, but for household items.
Want to try out an iPad before buying one? Got it. Need a bike while visiting another city? No problem. Want a power drill to help you hang those blinds? It’s just a mouse click away.
A flurry of websites has appeared to tap the trend, with Peerby.com a front-runner. Since its beginning in Amsterdam in 2012, Peerby has expanded to 20 cities in Europe and it is doing pilot projects in 10 U.S. cities, including New York. It expects to have a network of owners and renters in all major American cities by 2017. It has processed more than 100,000 transactions, has more than $1 billion worth of items in its database and expects to have 500,000 members signed up by the end of 2015, says founder Daan Weddepohl.
It all sounds promising. However, its future as a viable moneymaking business is far from certain. The road to profitability is littered with the carcasses of early startups that went belly-up in this niche: CrowdRent, Share Some Sugar, Bid & Borrow, Ecomodo, ThingLoop, OhSoWe and Hey Neighbor!, which started between 2007 and 2010, all folded. Can Peerby succeed where others failed?
Some experts say it is all about timing: The failed startups hit the scene before mobile apps and the sharing economy trend really took off. Others blame poor business models.
On the surface, it seems like a no-brainer. Who has not amassed a stockpile of household items, unwanted Christmas gifts and even clothing collecting dust in a basement or storage unit?
Advocates are betting that people would willingly share those items if a neighbor asked for them. The 2008 recession and the ubiquity of the smartphone app seemed to trigger the “sharing economy” revolution, said Rachel Botsman, author of “What’s Mine Is Yours: The Rise of Collaborative Consumption.”
People sought out creative ways to raise extra cash, and there was a shift toward renting and sharing items, rather than buying them.
“We’re shifting from an ownership society to an access society,” with much of it happening through the smartphone, said Simon Rothman, a partner at Greylock Partners, whose firm was an early investor in such companies as Airbnb and Facebook.
Millennials are particularly big on sharing rather than owning, said Ann Miura-Ko, a founder of Floodgate, which has invested in such startups as Chegg, Lyft and TaskRabbit. And nothing seems off-limits: There is borrowmydoggy.com for people who want to share ownership of their pets.
A recent survey by Ericsson ConsumerLab found that more than half of smartphone users were open to renting other people’s leisure equipment, rooms and household appliances.
“People are used to the idea of renting a car or getting a taxi ride just by using an app,” and sharing household items is just an extension of that, said Michael Bjorn, the report’s author.
Sure, there could be “trust” issues: What happens if a friendly neighbor returns an item broken or does not return it at all? Or predators use the site to lure people to their homes?
“If it isn’t a trust issue to have a stranger spend the night in your house, then it won’t be a trust issue to have a stranger rent your lawn mower,” Rothman said, contrasting Peerby’s business model with that of Airbnb.
In September 2012, Peerby was born. The name combines “peer 2 peer” with “nearby.”
The site took off, catching the attention of investors. Weddepohl raised about $3 million.
Herman Kienhuis, investment director at SanomaVentures, became the company’s first and largest investor.
“Peerby is indeed exploring a market with limited proven models yet,” he said.