Rent your way out of the credit crunch online
FRANKFURT (Reuters) - Don't let that Prada handbag, your camera and the rollerblades you never use gather dust in your closet. Put them to work on the rental market.
A growing breed of online marketplaces offering to rent everything from baby prams to bulldozers have seen a boom in business as the credit crunch bites from consumers and companies discovering the rental market can save and make you money.
Online rental marketplaces provide an Internet platform for individuals and hire companies to rent out their wares -- like a rental version of eBay.
Gary Cige, 28, co-founder of Zilok (uk.zilok.com), says individuals are renting out more and more of their personal belongings to earn pocket money.
A Paris-based member of his website has rented his single lens reflex camera out several times, earning around 800 euros ($1,015) in 9 months. Another member has made around 600 euros in 3 to 4 months by renting his camera, roller blades and game console.
Cige says the website has been growing around 25 percent a month since it was founded one year ago, and he thinks the credit crisis will likely boost growth.
"People have difficulties making ends meet at the end of the month, they try to find ways to save money and to earn a little more," he said.
Items available for rent on Zilok include dog costumes, a candy floss maker and an inflatable castle.
Zilok, who has taught macroeconomics at university, believes that the success of online rental marketplaces is symptomatic of a general shift of society away from valuing ownership toward valuing usage. Other examples of this shift were the "velib" bike hire scheme launched in Paris and the car-sharing networks now in place worldwide.
Such schemes enable people to be more ecological, by providing monetary motivation, he said.
Dominique Bourg, a French philosopher who has written about the so-called economy of functionality, told Reuters:
"It costs a lot less to rent an object you do not intend to use much than to buy it. And if you own that object you can also earn money by renting it out. So there is a double advantage, both for the person who owns and for the person who doesn't."
The concept of renting out a luxury handbag when you are on a tight budget first enamored fashionistas worldwide when it featured in the summer hit movie "Sex and the City."
But, while bag rental companies have existed as a niche service in the United States for several years, online rental marketplaces are seeking to make this service mainstream and universal.
The founders of these marketplaces say consumers are increasingly preferring to rent rather than buy in order to save both money and the environment -- a trend that has been boosted by the ongoing credit crisis.
"People say -- 'I could afford to buy a Prada handbag for this sum of money, but I would rather rent it out, and also get a stretch limousine, a convertible and some other things'," said Chris Moeller, the 36-year old founder of German online rental marketplace Erento (www.erento.co.uk).
Prada handbags can be rented out on Erento for 10 pounds ($15.44) a week and a limousine can cost 120 pounds an hour.
Moeller told Reuters that companies, which are currently struggling to obtain bank loans to finance the purchase of heavy machinery, are also looking to rent.
"At the moment, some companies can't get credit from banks because the latter are very skeptical, so the company says, 'okay, I need this machine for some jobs I have to do', and then they hire it out," he said.
Moeller said Erento, which he founded in 2003 and which now has around 470,000 registered hirers, has been profitable since its second year online and is expanding abroad rapidly.
As a private company, it does not disclose profits, but it says it brings hire companies about one million euros of rental business each day.
- Search for Malaysian plane may extend to Indian Ocean - U.S |
- Russia holds war games near Ukraine; Merkel warns of catastrophe |
- New York City gas explosion subject of federal probe |
- White House tried to mediate dispute between Senate, CIA panel: source
- Missing jet may have strayed to west, Malaysia military says |