In case you are unfamiliar, the hot new trend amongst forward-thinking millennials is the notion of the "sharing economy", which is a loose term for a sort of Utopian society in which people do not own property, but instead basically "rent" everything.

The concept of not owning property will probably seem absurd to older generations, but, if done right, could actually be much more efficient for the economy as a whole.

Take cars, for example. If you own a car, then how much are you really driving it? I drive mine for my 30 minute commute to work and my 30 minute commute home every day, and maybe about the same amount of time on the weekend, give or take. All in all, it's about an hour a day, which means that the other 23 hours of the day, my car is sitting idle in a parking spot somewhere (which in some cases I have to pay for!).

To add to this, many people have dedicated parking spots for their cars. Most have a spot or two at their place of residence, and they may have a spot at their place of business. This means that for every person who owns a car, society usually has to provide at least two parking spots for them somewhere, which, considering the cost of real estate in some places, is sort of a lot of money that we are just throwing away.

Imagine though, what if no one owned a car, but everyone still had access to a car? Well, if autonomous cars do indeed become a thing one day, then this could very well be a reality for everyone. Think of it: instead of walking outside to your expensive piece of metal that sits dormant most of the time, you'd just walk outside and get in a self-driving car that is waiting for you, and it drops you off where you need to go. Once you get out, it can go drive other people around. This way, the car gets used to its full potential, and more importantly, there is almost no need for parking spaces, since the cars would never really need to park!

This concept was portrayed in the extremely philosophically insightful movie Hot Tub Time Machine 2:

Now, this has pretty much been a way of life for people in large cities for some time (it's called "hailing a taxi"), but anyone in America outside of the biggest metropolitan areas probably owns a car and uses it to get around everywhere. Services like Uber, however, have made it easier for anyone to basically become a freelance taxi driver, which has allowed the concept of an "on-call driver" to extend beyond the realms of America's largest cities, and into smaller towns.

Airbnb is another internet startup that has gained significant popularity, and works in much the same way, except applied to lodging. Think of it: if you have a guest bedroom in your home, how often do you really have guests? It's probably not that often, which means that the extra room is just a waste of money. But, what if you could rent that room out to someone who needs a place to stay for the night? Airbnb allows you to do just that (with the other option being to rent out a full house or apartment that you aren't staying in).

You could take this concept to a further extreme and ask the question: "how much time of the day do you actually spend in your home?" If you're like many working Americans, then you probably just spend the nights there and most of the day at work, which means that you really only need a place to spend the nights, but you are paying for a place to stay all the time.

Renting out your house during the day would have some obvious drawbacks, which is a bit of a window into some of the bigger drawbacks of the sharing economy...

Will People Want to Share Everything?

The concept of ownership is a very primal one, which can be seen in children from a young age who constantly yell "mine!" when they pick up a toy. Adults must constantly remind children that "sharing is caring" and positively reinforce the behavior in order for it to be ingrained into adulthood.

While most people in polite society actively share things, there is still something of a revulsion to it, depending on the item being shared. Even something as trivial as lending someone a pen can induce just the slightest bit of anxiety at the moment that the pen is exchanged. It's subtle, and most people probably don't consider it, but it definitely seems to be there. One can then wonder, if sharing isn't exactly our nature, then will we want to make it an integral component of our economy?

Now, that aversion to sharing really only comes with something for which one feels a sense of ownership. When I get off of a commercial airliner that I am effectively "renting" for that flight, I don't feel a strong sense of ownership for the plane, and don't feel much remorse leaving it. Although, even in situations such as these, people still feel a strong sense of ownership for their seat, as was displayed by David Dao when he refused to leave his. Even though it wasn't his plane, Mr. Dao still felt that he was entitled to his seat on the plane because he had paid for it for that flight, and he felt so strongly about this that he refused to get up.

One seemingly insignificant phenomenon that could serve as a sign of future rejection to the sharing economy is the rise of vinyl record sales. In spite of the fact that any song can be easily digitally streamed on a wide array of devices, the supposedly obsolete vinyl record market has experienced sales growth for 9 years straight, according to this article by The Guardian. What's more interesting is that sales of vinyl records are not just from nostalgic Baby Boomers, but also from younger Millennials, who would not have been old enough to listen to vinyl records when they were the dominant medium for music.

To explain why younger generations are interested in vinyl, here's what a record CEO had to say:

People think millennials just stream and are just digital but actually I think we are going to see increasingly over this coming year that young people still want something tangible and real and that’s where vinyl is taking on the role that the CD used to have.

- Vanessa Higgins, the CEO of Regent Street and Gold Bar Records

The key here is that vinyl is tangible and it's something that you own. I used to stream music on the website Grooveshark, and had a nice playlist of songs saved on there, but one day the website was taken down and my songs were lost. Now, I wasn't too mad about this because I never actually paid for those songs, but the point is that music which exists on an online playlist is inherently volatile, it's not something that you really own. A record, on the other hand, belongs to the physical world, and can only be taken away from you if someone physically takes it away or destroys it.

Even though listening to music that is digitally streamed is pretty much the same as music that is played on a turntable (you heard me right, audiophiles, don't get on your high horse about how vinyl is better, you can't tell the difference!), people have still shown that they are willing to pay for something that they can own, even when a cheaper and more convenient alternative exists.

Now, apply this to something bigger, like a car. If people could freely use cars that they didn't own, and experience all of the benefits of owning a car (being able to get anywhere at any time) without any of the drawbacks (having to care for and maintain a car) for a fraction of the price of owning a car, then would they still choose to do it? I'm sure a lot of people would, because money talks, but I venture that owning a car for oneself might come back around eventually.

Will It Really Be That Much More Efficient?

Going with the example of shared cars, which seems to be the best example I can think of for a sharing economy, there is a fairly strong argument to be made that such a system would be more efficient for the populace as a whole. As it currently stands, there are 797 cars per 1000 people in America, giving America the third-highest per capita car ownership rate in the world. If about a quarter of Americans are under 18, then one can make a reasonable assumption that there is about 1 car for every person in America old enough to drive, which is quite a lot of cars.

If, however, we created a system in which a pool of cars would just drive around everywhere, carting people around, dropping them off, and then picking up more people, then in theory the number of cars could be significantly reduced (which would also mean that the cost of using a car would be reduced).

To understand why this could be the case, consider this: if you were an architect for a large office building and had to decide how many bathroom stalls to put in the bathroom, would you put in one stall for every single person in the building? Obviously not, because then the bathroom would probably be as big as the building itself. While this setup would guarantee that no one would ever have to wait for a bathroom stall, it would also be an incredibly inefficient allocation of resources. In practicality, people aren't going to the bathroom all the time, so you only need to have a small fraction of bathroom stalls for a given number of people, and in most cases people still don't need to wait for a stall if you've done the math right (and as long as everyone's digestive system isn't on the same schedule).

Going with this logic, since most people are probably only using their car for a small fraction of the day, we would in theory only need a small fraction of cars for the given population. The problem, though, is that people's use of cars is not quite as random as people's use of bathrooms. Take, for example, a city in which a large portion of the population lives at one end but works at the other. If all these people went to work at the same time, then you'd need a large amount of cars to facilitate it for that time of day (as well as when they want to go home), but the cars would see little use for the rest of the day. It's also possible that during given times of day, there would be a higher demand for cars to take people to one general area, but to pick people up from a different area. This would mean that the cars would be driving without people for possibly a larger portion of the time than desirable.

Now, this problem could be mitigated if we changed the work culture in America to something other than the typical "9-5" work day, so that there was a more steady stream of people going to/coming home from work throughout the day rather than everyone just going to/coming home at the same time. Such a system could also be implemented today and solve a lot of our traffic issues.

With these problems in mind, one can conceive that a shared car system, if designed in such a way as to meet demand, might end up with more cars driving more miles than we currently have today. Of course, if people are willing to be more flexible with their car use, then the number of cars could be limited, but that starts to get into the last issue with the sharing economy: could it ever be as good as private ownership?

Is It Possible to Get the Same Utility Out of Shared Products?

Up to this point in society, several industries, such as the automobile industry that I have been talking about for most of this article, have been synonymous with private ownership due to a favorable cost/benefit ratio. The cost of owning a car, while high, is still outweighed by the benefits it brings to people who purchase them. The reason why private ownership of airplanes as a form of transportation is not as prevalent is because the cost of owning a plane capable of the same speeds and ranges as a commercial airliner, along with the cost associated with learning to fly it (or paying someone to fly it), is much more than the cost of a plane ticket, so it really only exists as an option for the very rich.

If shared cars are to become a thing that the average person is on-board with, then the cost/benefit of a shared car would have to be comparable to the cost/benefit of a privately owned car. Cost is the easy thing to calculate, one could just simply compare how much it is to use a car for their average drives over the course of a year and compare that to the cost of owning a car. The benefit is much more subjective, as the main benefit that I see in owning a car is that I know that my car will be there waiting for me when I walk to my parking spot. The current problem with using a service like Uber is that you don't really know how long you'll have to wait on the car to come to you. This uncertainty creates a bit of anxiety, which is fine every now and then, but I don't know if I'd like to make it a daily thing.

It's certainly possible, though, that as services become more widespread, they get better. A shared-car service could one day be good enough so that the wait time is minimal, giving it nearly the same benefit as owning a car. If services ever got that good, though, would they still be able to keep costs down? It would eventually become a question of how much people are willing to pay versus how long they are willing to wait.

My guess is that it will be difficult to keep wait times low enough to be negligible for a given person, so in my mind the cost of a shared car will have to be significantly less than owning a regular car for people to choose it over car ownership. Even so, people may still choose to own one car per family as a backup, which would still reduce car ownership and could be considered a net benefit to the economy.

Will It Make Us Miserable?

Now, it's possible that costs of shared cars (or shared anything) could eventually be low enough to motivate a large number of people into using them, but it's also possible that they wouldn't enjoy the experience as much as ownership. As I talked about with public transportation, using public transit, while cheap and efficient, also comes with a host of drawbacks. As someone who grew up driving around in a car, having to rely on public transit when I lived abroad wore on me after awhile.

We have seen from the airline industry, though, that people are much more motivated by price than comfort, so we may one day accept shared things as a way of life, even if we hate every minute of it.