When it comes to the circular economy, waste prevention is king. After all, reducing the amount of waste we generate and finding new ways to reuse materials are what will lead us to a more sustainable future. However, the tricky part is how to get there.
Fortunately, the rise of the sharing economy and access to affordable digital tools make it easier than ever before for businesses to leverage rentals as a way to increase their asset utilization. In this article, we’ll explore why renting assets will be essential for companies that want to execute on a circular business model and why you should do so as well.
Table of Contents
What is the circular economy?
The circular economy is exactly what it sounds like: we’re moving away from linear consumption and production cycles and towards closed-loop systems that allow materials to be cycled back through our economy again and again. The theory behind the circular economy is that the resources we use for goods and services can be reused indefinitely if we design systems that allow for continuous reuse. This is different from a traditional linear economy where the lifecycle of natural resources is finite, and use of those materials is unsustainable.
Why renting is essential for a circular economy
The rise of co-working, shared office spaces, and peer-to-peer marketplaces have made it easier than ever before for companies to get started with asset-light models. However, it’s important to think beyond just having easy access to these assets. While renting makes it easy to get access to the resources you need to run your business, it also helps maximize the lifespan of your assets. This is where renting can be truly transformative for the circular economy.
How does the circular economy benefit businesses?
By moving towards a circular economy, companies can reduce costs associated with purchasing new goods and increase their profit margins. This is because rental businesses can charge for the full cost of goods. Multiple studies and articles outline how the majority of goods will be rented in the future. If you want to take advantage of this shift and implement a circular model in your business, then it’s essential you start renting your assets.
3 ways bicycle rentals are helping companies move to a circular economy
Bicycle rentals are a great example of how asset rentals are helping businesses move to a more circular economy. Bike sharing has become hugely popular in many cities around the world and it’s predicted that the industry will grow to be worth almost $7 billion by 2022. There are a number of ways bicycle rentals are contributing to a circular economy.
1 - Rentals reduce the need to buy new bicycles
They help increase mobility and access to goods, and they reduce CO2 emissions from people taking cars to run simple errands.
2 - Bicycle rentals can extend the life of old bikes
When properly managed, a rental bicycle can have a second or third or even fourth life after the initial rental use is over. Because rental bicycles are typically professionally maintained, they can last a very long time and be reused by hundreds of happy riders.
3 - Ebike rentals allow people to opt out of car use
With the growing availability of rental ebikes, which are typically high price items, more and more non-cyclists are now able to experience the joy of bicycle touring and commuting, making car ownership and use less of a necessity for modern life.
2 reasons more businesses should embrace asset rentals
If you’re still not convinced that more businesses should embrace asset rentals, here are two reasons why you should be using them. -
Maximize asset utilization.
It’s estimated that between 10 and 20 percent of the world’s assets are used at any given time. This means that many assets go completely unused. By renting out the assets you already own, you’ll be able to use them more and extend their lifespan.
Expand your customer base.
By renting out assets to new customers, you can expand your customer base and bring in more revenue. This can also help you build a loyal customer base by providing them with more value.
The bottom line is that the circular economy is good for both the environment and businesses. But it requires a massive shift in mindset from a consumer mentality to user mentality. In order to make this happen, we’ll need to change how we present ownership versus use and experience.
By adopting a different mindset and prioritizing long-term use over short-term gains, we can begin to see real progress. The key will be to maximize the utilization of our assets through the use of digital tools and access to rental markets. For businesses, this means moving away from a “buy and own” model towards a “rent and share” model that better supports a circular economy.