Mom always told you to share. But it turns out her advice might not always be best—at least, not when it comes to saving money during a recession.
According to the Washington Post, companies with a business model based around the concept of sharing are faring well lately, with car services like ZipCar seeing a 70 percent bump in membership since last year and the book-swapping website BookMooch increasing its membership roster by 30 percent.
While sharing sure sounds recession-friendly, we couldn’t help but wonder if it works out as well for the people doing the sharing as it does for the companies themselves. To find out, we’ve did the math on some of the most popular sharing-based businesses.
For a monthly membership fee of $5 to $15, sites like Bag Borrow or Steal and From Bags to Riches let users rent handbags for months at a time. But membership fees aren’t all users have to pay, since actually renting the designer purse can cost an additional $20 to $200 (or more!) per month.
How It Adds Up: Bag Borrow or Steal users looking to rent the Furla “Elizabeth” handbag can expect to pay $75 for one month, in addition to membership fees and shipping costs. Shoppers looking to buy the bag outright, meanwhile, can expect to pay $649 for a brand new version. After eight or nine months, you’d be paying above retail for that bag.
Verdict: If you’re planning to keep a quality bag for more than a few months, you’re probably better off buying, since rental costs will nearly always be more in the long run. LOSER.
For a fee of $20 to $50 a year, companies like ZipCar and WeCar give members access to fleets of automobiles, which they can then rent for $7 to $10 an hour, with daily rates starting as low as $77.
How It Adds Up: ZipCar reports its users save an average of $500 a year over the cost of car ownership, and it’s nearly always cheaper than renting a car from a standard car renting company. Whereas someone looking to rent a Nissan Altima Hybrid from Hertz could expect to spend $149 a day—plus insurance and gas—the same driver borrowing the same car from ZipCar could expect to spend $89 a day or $13 an hour, including gas and insurance fees.
The Verdict: For driving occasionally in the city, car sharing programs are nearly always more budget-friendly than owning. And sharing programs generally end up being cheaper than standard car rental companies, since their daily rates include gas and insurance. WINNER!
For women living in New York or Los Angeles, “rental salons” such as Wardrobe NYC rent party dresses from every mega-designer under the sun in exchange for a $250 consultation fee and 15 percent of the cost of the gowns.
How It Adds Up: Someone who wants to wear a Carolina Herrera gown to a big-time event can expect to pay $6,000 (or more) at retail; at Wardrobe NYC she would be paying $900, plus a $250 consultation fee that goes towards the first rental.
Verdict: For women who wouldn’t wear the same dress to two events anyway, the service may not be an entirely bad investment. For the 99.9 percent of us who don’t wear designer gowns on a regular basis, however, $900 for a rental doesn’t seem like such a bargain. DRAW.
For as little as $8.99 per month, Netflix users can rent an unlimited number of DVDs, chosen from a selection of 100,000 titles. There’s no shipping costs, and no late fees, either.
How It Adds Up: The $8.99 plan only allows you to rent one movie at a time, but it’s still far cheaper than the cost for movie enthusiasts who buy their DVDs at retail, often for $15 or more each.
Verdict: Unless you like only watching one movie a month, over and over, joining an online rental plan is nearly always the budget-friendly option. WINNER.
Shelves groaning with books? You can sign up for BookMooch and list the books you’re willing to give away for free. Users earn points for each book they list, which they can eventually redeem to “buy” other books from fellow users.
How It Adds Up: The pivotal concept behind BookMooch is that the entire site is free. With the exception of paying for postage, users can send and receive as many books as they want without paying a dime.
Verdict: Barnes and Nobles can’t compete with free, which gives BookMooch the lead. WINNER.
Who hasn’t complained about the costs of college textbooks before? Now a company called Chegg says it can help by allowing students to go online, reserve the textbooks they need, and return them when the semester is over—all for around 85 percent off the retail price.
How It Adds Up: A student whose professor requires the textbook Biology with MasteringBiology for class can expect to spend $141 to buy the book new or an average of $100 to buy it used. With Chegg, however, the cost us $46.95 for the semester, including free shipping, with the option of buying the book for a reduced price at any time.
Verdict: Nobody actually reads old textbooks once college is over, and selling them back at a used bookstore won’t help recoup much of the original cost, which is why renting textbooks with Chegg clearly comes out to the more budget friendly option. WINNER.
PETS (Ed Note: After this story was published, a colleague noted that FlexPetz is out of business)
Believe it or not, there is a company out there that lets you share animals. For a monthly fee of $99.95, the flexible pet ownership company FlexPetz lets members “rent” shelter dogs for $25 to $45 a day. Users can spend as much or as little time with their dog as they wish, although they will be billed for a minimum of four pet visits each month.
How It Adds Up: In addition to the monthly fees and per-visit costs, FlexPetz users must fork over $150 for an in-home orientation upon first joining the program, an annual “administration fee” of $99, and a $25 charge every time a pet is delivered to their home or office, adding up to a minimum cost of about $3,360 a year. How this adds up to the cost of typical pet ownership, however, depends largely on how often your pooch attends doggy daycare, gets walked by a dog walker, or—most importantly—whether he or she gets sick, requiring major vet bills.
Verdict: If you want a dog for companionship, head down to a local shelter. If you want a dog to pick up on guys/girls, ask a friend if you can walk her pooch. Either way is probably a better option than renting an animal. LOSER.