Shortly after Leah Busque and her husband turned their distaste for having to fetch dog food for their 100-pound yellow Labrador into what would become TaskRabbit, an online marketplace for locally outsourcing small jobs and errands, the Great Recession of 2008 went into in full swing.

It was an interesting time to launch a technology company, recalled Jamie Viggiano, TaskRabbit’s head of marketing. The site’s founders had expected its earliest errand providers to be students. Instead, in what became a critical influence on the company’s direction, they found that many participants were out-of-work lawyers and bankers.

“We were having highly skilled professionals using the service because they were simply unemployed or underemployed,” Viggiano said during a panel discussion titled, “The Shared Economy: Why Own When You Can Share?” at the most recent BizTech@Wharton Conference. “And that actually continues to today. The economy is back on the uptick, unemployment is [lower], but people are finding this to be a really interesting way to make a living, a really interesting way to build a career in the context of your life. We’re seeing our TaskRabbits really embracing the lifestyle of freelancing, just picking up jobs when they want to. So, from an employment perspective, I certainly think that people are seeing these new models of work as here to stay.”

The shared economy, perhaps best known for crowd-powered marketplaces such as travel accommodation site Airbnb and transportation-focused Lyft, blossomed as the recession set in. At the same time, social platforms were establishing broad footholds. Collaborative consumption, made more feasible by evolving technology, offered consumers ways to personalize their experiences without having to own their own cars, vacation homes and items that may be out of reach financially. It also presented fresh streams of income for people with something to spare or share.

“We could have been sharing our houses and cars a long time ago. Why now?”— J.R. Reagan

Viggiano was joined on the panel by Steve Webb, director of communications at RelayRides, a peer-to-peer car-sharing market; and Michael Taormina, chief financial officer and co-founder of CommonBond, which connects student borrowers and alumni investors to crowd-sourced loans. J.R. Reagan, chief innovation leader for the federal practice at Deloitte Services, moderated the discussion.

The public’s broad openness to shared-economy models, Taormina said, is due less to a technological transformation than to a mental and regulatory transformation — “a mental willingness on the part of consumers to participate in something like this, whereas, in the past, maybe they wouldn’t [have tried it]. Maybe they wouldn’t have let a stranger into their house. But they’ve heard this is something that is acceptable. There is also an increased tolerance, I think, on the part of regulators to allow for activity like this to take place.”

The success of companies like Airbnb, Reagan noted, seems to hinge on trust. “We could have been sharing our houses and cars a long time ago,” he pointed out. “Why now? What is the difference now, especially with the trust — how does that scale? Are we going to be able to trust everyone as we get up the ladder?”

Why Now?

Viggiano noted that TaskRabbit’s founding coincided with a growth spurt among social networks such as Facebook and Twitter. “People were sharing updates, sharing personal information — and it was a little uncomfortable,” she said. “What we then tried to do was say, ‘We’re going to connect you guys online, then you’re going to take it offline. You’re actually going to have an interpersonal experience.’ And that was an additional barrier that we had to get over.

“Trust and safety was always our No. 1 priority,” Viggiano added. “[All users are] background-checked; everybody is fully vetted. I think as people become more comfortable transacting online, the evolution is toward taking things offline.” The sustained success of companies that facilitate face-to-face meetings, Viggiano said, depends on such an infrastructure.

RelayRides, Webb noted, has to be especially attuned to such concerns. “If you’re convincing someone to rent out their second-most-valuable asset [i.e., a vehicle], obviously trust and safety is a huge thing. When the company was founded in 2008, it took us two years before we [officially] launched. The reason why is because we had to create an insurance product.”

Taormina and his colleagues at CommonBond, meanwhile, witnessed in the wake of the financial crisis the trend of banks exiting the college financial aid space en masse. “Securitization markets were drying up,” he noted. “There was a reluctance to lend warehouse lines, which are the lifeblood of the traditional student-loan model. The lack of trust cut both ways — a lack of trust in the banks to provide what we believe is a fair lending rate to student borrowers, and then banks not treating borrowers like anything more than a loan.”

“As people become more comfortable transacting online, the evolution is toward taking things offline.” –Jamie Viggiano

The goal of CommonBond, he added, was to “create a [lending] platform [for] people who price risk accordingly and are willing to lend at fair rates that reflect the underlying credit fundamentals … and that’s what has proven out so far.”

Models of Scale

Peer-to-peer sharing, Reagan pointed out, implies individuals doing business with other individuals. “So where do the large corporations fit into this?” he asked. “Do they have to go down this road? Is there a place for them? Or are we having two separate worlds here that are sort of colliding?”

Among the investors in RelayRides are General Motors and Avis. That might seem counterintuitive, Webb said, given the shared economy’s tendency to disrupt industries, “but I think that big companies — in our space, at least — have seen the potential for this peer-to-peer model.”

He added that, in many respects, the company isn’t competing directly with such firms. “We’re not competing with GM directly because GM’s average car owner is 50 years old, and they see RelayRides as an opportunity to expose more young people to GM cars,” he pointed out. “For Avis, while it’s easy to compare RelayRides and Avis, we’re a marketplace and they are fleet managers. The way that they make the majority of their revenue, I believe, is through after-market sales. Big companies are getting involved to see how they can make this work for them, but I don’t think that they feel it’s going to erode the business.”

From the beginning, Viggiano and her colleagues noticed that people were leveraging TaskRabbit to build businesses. Small start-ups, she said, were tapping into the site’s population when they otherwise might have consulted a temp agency, because they could do so “without the bureaucratic clutter” that often comes with using the latter.

The effects of the shared economy on the financial services industry, Taormina noted, are a more difficult read. CommonBond’s three co-founders each had come from a large financial institution — Taormina had been a vice president at J.P. Morgan Asset Management. Such firms are “not set up to nimbly apply what we were learning in collaborative consumption to [build] a model like ours,” he said.

Viggiano sees the shared-economy model as adding value to the marketplace: “We’re making the pie bigger,” she noted. “We’re creating more efficiency, which means we’re allowing people to focus on the things that they’re best at.”

RelayRides initially was meant to emulate Zipcar, Webb said, referring to the popular membership-based car-sharing club. Webb’s company found, however, that both owners and renters preferred long-term rentals. Many renters own vehicles, he noted, and they turn to RelayRides for unique purposes, such as when traveling.

People in San Francisco, for instance, might own a relatively compact Prius for navigating the city’s narrow streets. When they drive to Lake Tahoe, however, they might prefer an SUV that can hold more luggage and supplies. The sharing economy creates new opportunities, he noted, and “forces these existing players to be more efficient.

“Our supply [of vehicles] now, especially in major metropolitan areas, is big … and the key for us has been constantly evolving our product to make sure that people are seeing the different types of vehicles and the different uses,” Webb noted. “And I pretty shamelessly admit that we like to emulate Airbnb in this sense. They create an experience around a destination, and the house [users rent] is part of that, and that’s what we’d like to do with our product, as well.”

Supply and Demand

Collaborative consumption, of course, depends on access to the supply. A successful company, broadly speaking, will find ways to tap more far-flung locations, beyond population centers like New York City or a San Francisco.

“Big companies are getting involved to see how they can make this work for them, but I don’t think that they feel it’s going to erode the business.” –Steve Webb

“We’re very cognizant of our launch strategies,” Viggiano said. “We start in those urban areas where there is a concentration of people. But what you naturally see are the concentric circles outside the major metropolitan area, and people adopting the service [there]…. The suburbs are not necessarily the early adopters, so you may have to wait a couple of years, but gradually, we will be there.”

Webb noted that RelayRides, though a small company, has grown tenfold during the past two years. Its marketplace includes vehicles in 1,900 American cities. “There are cars in the Aleutian Islands that are closer to mainland Russia than to RelayRides’ headquarters in San Francisco,” he said. “This peer-to-peer model creates something that traditional, fleet-based car-sharing doesn’t.”

There is no capital-intensive investment, for instance, in a fleet of vehicles requiring certain utilization rates. The owners of cars participating in RelayRides, Webb said, aren’t necessarily trying to reap profits or meet such rates. “That’s what’s enabled us to be in Topeka or the Aleutian Islands.”

Reagan pondered which industries might not be suitable for the shared economy. Viggiano imagined conditions in which the unemployment rate was near zero: “That’s an experiment we haven’t run, when everything is just so rosy,” she said. “But, frankly, we haven’t seen anything not work yet.”