For the millions of American households that remained on the “nice” list during 2017, the holiday season often meant receiving mounds of new gifts.
But sometimes staying on the “nice” list means receiving holiday gifts that are well-meaning, but miss the mark. As a result, millions of Americans return some $90 billion worth of unwanted holiday merchandise every year.
Thanks to the growth of the sharing economy, though, the hassle of returning presents might soon be a thing of past. The rise of sharing economy services mean everyday people can turn unwanted or undesirable gifts into an opportunity to make recurring additional revenue.
That’s an opportunity on which peer-to-peer marketplace Rentah is betting. The Brooklyn, New York-based company allows users to rent their stuff or skills to others for a fee. Founder Anup Desai recently spoke with PYMNTS about Rentah’s origins and how he sees the company as an improvement on the sharing economy.
Occupying the sharing economy
Desai compared Rentah’s business model to a more modern form of Craigslist — one that accepts digital payments, quickly disburses funds to users, facilitates communication between parties and allows users to both build profiles and submit ratings based on their experiences.
The idea is to help users tap into the commercial potential of renting their property instead of selling it once, Desai said.
“My hope is we become the Amazon of renting,” he explained. “[I also hope that] people’s first instinct is not to buy something and hide it in their house, but to look at everything like skills and the stuff we have as an investment.”
The company started in 2013 as a platform for users to list services — such as house cleaning or car washing — and eventually expanded to allow users to rent items they had around the house — like lawnmowers, power drills or steam vacuums. The platform can also be used by people with creative skills — such as blogging, consulting or beauty services like hair and makeup styling — to offer those services to interested clients.
In addition to being Rentah’s founder, Desai is an adjunct professor of geography and political science at CUNY College of Staten Island. He also described himself as “somewhat of an activist” and spent time with Occupy Wall Street protesters when the movement gained steam in 2011. According to Desai, the inspiration for Rentah came from listening to protesters’ frustrations with large corporations that don’t always have consumers’ best interest in their focus.
Following that experience, Desai said he was inspired to start a new service that allowed users to earn revenue from their belongings.
“[I realized] renting can be recycling without being so heavy handed about it,” he said. “Something clicked in my mind that this is where the world is going.”
In addition to helping users make money off their property and skills, Desai also hopes the Rentah platform will lead to better relationships among local community members by helping make introductions between neighbors who might otherwise never have crossed paths.
Disbursing rental payments
Once a request for an item is made, Rentah’s system holds the fee from the consumer interested in making the rental. After the product owner agrees to the terms of the deal, the funds are disbursed directly to his or her checking account within 48 to 72 hours.
Like Craigslist, Rentah allows those with items and services to list them on the platform for free. Unlike Craigslist, though, the platform steps in to help both parties exchange money and can keep track of communication between them. If a user is concerned about renting his stuff, the platform allows property owners to request a deposit to be held in case something goes awry with the rental.
This approach helps modernize the Craigslist model by taking older payment methods like cash and checks off the table, said Desai. It also makes the rental arrangement more appealing and secure when dealing and meeting with strangers.
When posting items for rent, Rentah recommends users charge about 10 to 20 percent of the overall cost of the product. For example, if a video game enthusiast owns a $200 console, he might consider renting the console for approximately $25. The company makes revenue by charging a 5 percent surcharge to the users that rent products and services.
Owners of products can also list their items for more than the recommended rate of 10 to 20 percent of the overall cost. For example, the console owner might ask for $200 to rent the game system. While making a move like this could be profitable, Desai noted it also carries a risk of alienating customers.
“That’s the beauty of capitalism,” he said. “I don’t think anyone is going to rent [a game console] for that much. And if they do, then cool. You made $200.”
Reinventing the sharing economy
By some accounts, the “sharing economy” is poised to grow to $335 billion by 2025. Notable players contributing to the growth of the market include rideshare companies like Uber and Lyft and home rental services like Airbnb.
But Desai said he hopes Rentah stands apart from other players in the rental market by offering more financial empowerment to the people offering their goods and services.
“One of the downsides we saw about the sharing economy is that companies like Uber, Lyft, Handy and TaskRabbit were getting rich off of the people who are working by taking really big cuts,” Desai said. “At the same time, they didn’t want to treat them like employees.”
Part of the problem he sees among bigger players in the sharing economy is a disconnect between the service the companies intend to offer and the impact it leaves on those offering their services through it. Desai noted some companies like TaskRabbit take a 30 percent surcharge from workers performing the jobs.
Rentah, though, is trying to differentiate itself other sharing economy players by charging a lower fee of 5 percent to those seeking to rent goods or services and incorporating the charges into their final bills. This allows those offering items and skills on the platform to list them for free and to set their own prices.
As the sharing economy expands, more opportunities will arise for people to make money from their property and skills. Desai hopes the Rentah model will make the sharing economy more appealing by offering users a faster way to access their funds, a free platform to list items and relief from carrying cash — and serve as an icebreaker among community members.
While some folks might be disappointed in the gifts they received over the holidays, a sharing economy service that helps people make money off their goods could make staying on the “nice” list all year worth the effort.