Sunday Strategist: The Sharing Economy May Never Be the Same

(Bloomberg Businessweek) -- Economic crises, in general, are terrible for mental health. This one, however, goes far beyond numbers in a portfolio, darkening every transaction, both social and commercial. How we behave as consumers may be fundamentally changed long after this pandemic is a dark footnote of history.  

“It’s akin to a PTSD,” said Ilene Green, a Manhattan clinical psychologist. “All of this will be on people’s minds in really quiet ways indefinitely. …I would not call it a mental illness, but this kind of thing does get folded into the psyche.”

The best recent proxy, according to Green, may be the 9/11 attacks. She never goes through Grand Central Station anymore without scanning for danger, triangulating escape routes. Days ago, Green did a similar sort of morbid calculus to return a sweater.

It doesn’t help that we will likely be negotiating more than a year of gray area from the end of self-containment to the relative all-clear of a coronavirus vaccine. Those will be fraught months in which every transaction—every restaurant meal, every vacation—will be cranked through a cost-benefit analysis, overlaid and weighted by the news of the moment, namely fatality and infection rates.

Consider the sharing economy. While health officials urge millions of people to shut their homes to friends and family, lending one’s car to a stranger is still fair game (at least it was when I wrote this).

The country’s burgeoning car-sharing platforms are limping along, albeit with assurances that vehicles are cleaner than ever. Zipcar, a unit of Avis Budget Group, said it has upgraded its cleaning process with antiviral solutions and is waiving cancellation fees. It’s also encouraging members with Covid-19 symptoms to contact the company, so it can isolate and sanitize any vehicles they used, before returning them to the fleet. 

Turo, a San Francisco-based platform with 10 million members, has also implemented a no-penalty cancellation policy and provided users tips for disinfecting cars and swapping keys remotely. 

The average American sedan or SUV, it turns out, is often a speeding petri dish of sorts. Vehicles swapped widely among users aren’t unlike restaurant tables, albeit with more nooks and crannies to cultivate germs.

Not surprisingly, car-sharing demand has declined, according to Turo, though the company would not quantify the dropoff. Car-swap platforms benefits from so-called network effects: the more people who use them, they better they work (and the more richly they are valued by investors like IAC and Softbank). In just a few weeks, however, Coronavirus has reversed and weaponized that chummy feedback loop. Volume, scale, foot traffic—all dirty words at the moment.

The equation is similar across the sharing economy, from the dress racks of Rent-the-Runway to the scooter fleets of San Francisco. Green, the therapist, says consumers are running risk algorithms in their heads at a frenzied pace, a pace that will be hard to slow.

“Are people going to want to come to my Airbnb? Do I want people in my Airbnb?” she wonders. “I do think it’s going to have an impact on how willing we are to engage in the same sorts of social transactions we did before.”

How quickly companies recover from Covid-19 will have much to do with how carefully they consider the post-traumatic stress of pandemic consumers. If you run a retail empire, for example, you would be advised to build a system for remote and "no-contact" pick up. If you run a car dealership, the whole transaction ought to be iPhone-able, from the financing to the curbside delivery. And if you run an airline, a theater chain or cruise fleet (God help you), a sanitizing strategy will be as critical as a smooth supply chain. We might not be traveling much for the next 18 months, but when we do, germ-free seats will be fetching a premium.

That's just logistics and marketing, however. There will be a human capital component as well. Imagine a restaurant staffed entirely by Covid-19 survivors? Stranger things have happened; they’re happening every day, unfortunately.

Businessweek and Beyond

• Factories consider WWII-style retooling
• Car dealers make house calls to move metal
• The potential for an “ epidemic yo-yo” is terrifying
• Harley may give up on millennials and double-down on boomers
• DIY TP (service journalism)

©2020 Bloomberg L.P.