What is Mutual Resource Utilization and How Does it Work?

Mutual consumption is the shared use of goods or services by a group. For more than a decade Uber and Ola are sharing their ride services. It is a form of peer-to-peer sharing, renting. It allows consumers to obtain resources that they need, while also allowing them to provide resources that other needs have not been fully utilized. It can be seen in society in numerous ways like lending, battering, renting, gifting, swapping, banking etc.

Collaborative consumption differs from individual consumption in that the resources, goods or services are shared by the whole group rather than individuals. It works because complete costs get divided across large groups. So overall cost gets reduced. However it sometimes faces criticism of not abiding regulation as by conventional companies.

Airbnb created an online platform that allowed owners of home and villas to rent their extra space of the house. This might be done for the owners who live in their house partly or out of their house for a long time, or they have some extra space that they are absolutely not using. Renters might not be able to afford such good residence themselves. So by dividing the cost across multiple renters it can become affordable. These types of business require licensing and other regulatory related fees in order to operate legally. Similar legal challenges also arose between ride services of Uber and Lyft. The operator of the taxi company claimed that Ola and Ubers are offering illegal forms of services and creating competition in the market.

There are thousands of forms of mutual consumption. However these all are segregated into three types:

Product-service system

There are products like drill machines,saw, spa machines. They are used 6 to 7 times a year. But they are privately owned products. In PSS people are shifting their mindset to make money out of it. They want benefits from their product but they don’t need to own it. They can order it whenever they are required.

Redistribution market

Cardboard is something that is of high capacity and is much needed when shifting from one place to another. On an average Canadian people throw away10 millions of cardboard annually. These are goods that can be swapped from a person who used it to one who needs it now. It will also help in reducing the environmental problems by reducing reusing and recycling. A great initiative towards sustainable development.

Collaborative lifestyle

Renting your house is an example of collaborative consumption. People of similar needs, interest collaborate and share their assets like time space and skills. This is usually at the local level. It is not a nice collaboration. It creates value for things that are left used. It is occurring at a global scale like peer to peer lending, travelling and many more.


Author: A.C.

Dr. Chakraborty is a researcher in electronics and has authored numerous articles in the domain. She is also an avid blogger and shares a penchant for domains like technology, business and science.

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