Get the knowledge: the benefits of new ownership models

What do product-as-a-service and access-based models look like?

Under PaaS, manufacturers and retailers would remain the owners of the product, with maintenance and repair becoming part of the package (and remember, items that are looked after properly last longer). How this concept works can vary depending on the product and business supplying it. Here are some examples:

•       Long-term leasing-style models, where you pay a subscription to have a product for a period of time, for example a car or a home appliance. At the end of the period, the manufacturer takes the item back, ensures it’s in good condition, and then makes it available for someone else.
•       Shorter-term rental-style models, which gives you access to an item you only need for a short period of time, such as a special outfit or a piece of garden equipment.
•       Sharing models, which connect you with those in your local community to facilitate the sharing and borrowing of items. ShareShed is a great example of this.

PaaS has obvious immediate environmental benefits, enabling consumers to do what they need to do without having to purchase new items that put further pressure on the planet’s already-stretched resources. But there’s a longer-term benefit, too. 

The products we own today tend to have low usage rates so they have short life spans; we don’t use our lawn mowers every single day, for example, or wear a tuxedo every night, so they’re not designed to withstand constant use. 

As producer-owned PaaS models become more commonplace, goods will have much higher usage rates and will therefore need to be developed with longer life spans in mind, so premature obsolescence will be phased out.

Making the move to product-as-a-service

PaaS sounds great in theory, but will it really work in practice at a meaningful scale? The good news is that many companies are already adopting access-based models in their operations. O2, for example, launched its ‘Refresh’ plan, which allows users to rent the latest available phone and continually exchange it for the latest models. Upscale department store Selfridges, meanwhile, has launched a designer clothes rental service (adding to the many others already on the market).

There are also major opportunities for PaaS in a business context. Tech brand Philips, for example, has launched Signify, which provides lighting as a service to companies of all sizes.

And at a government level, PaaS is gaining traction as part of wider circular economy initiatives. In the European Commission’s new Circular Economy Action Plan, for example, sustainable consumption and product policy hold a central role, and producer ownership is one solution for achieving these goals.

PaaS is not a silver bullet solution to consumerism, though, and it could have some unintended consequences, especially as the concept goes mainstream. Companies may have to produce more goods (and therefore consume more resources) at the outset to ensure there is enough choice and availability for customers, and this can have additional knock-on effects. 

AirBnb, for example, has been accused of driving unsustainable urban transformation, while Spotify’s model has widely been condemned for shortchanging its artists.  

How these initial challenges will be addressed is yet to be completely understood, but PaaS nonetheless represents a solution to many problems even outside the direct sustainability narrative. 

Companies are facing higher prices and supply chain issues, while global economic turbulence means consumers are always seeking cheaper, more cost-effective ways of living. As such, the traditional concept of ‘ownership’ is quickly becoming outdated, and sustainable business models that are kinder to the planet and consumers’ bank balances are set to steadily take centre stage.

This article was first published 05/09/22 but has been updated to reflect the latest research and developments in this area.