Deep dive: Sharing economy & product-as-a-service — what's working, what's not, and what's next

Why It Matters

The global sharing economy reached an estimated $450 billion in platform-mediated transaction value in 2025, up from $150 billion in 2014, and is projected to surpass $600 billion by 2028 (PwC, 2025). Product-as-a-service (PaaS) models, where users pay for access to goods rather than owning them outright, are increasingly positioned as a lever for decoupling resource consumption from economic growth. The Ellen MacArthur Foundation (2025) calculates that shifting just 20% of durable-goods purchases in the EU to access-based models could reduce associated material extraction by 12% and cut lifecycle greenhouse-gas emissions by up to 17%. Yet the environmental promise of shared and servitised consumption is far from guaranteed. Rebound effects, in which cost savings from sharing lead to increased consumption elsewhere, can erode 20% to 60% of the expected emissions reductions (Warmington-Lundström and Laurenti, 2024). The sector sits at an inflection point: unit economics are maturing in several verticals, regulatory frameworks are catching up, and lifecycle evidence is becoming granular enough to distinguish models that genuinely reduce impact from those that simply redistribute it.

Key Concepts

Sharing economy. An economic model in which individuals and organisations share access to underutilised assets, typically coordinated through digital platforms. Canonical examples include ride-hailing (Uber, Lyft), short-term accommodation (Airbnb), and peer-to-peer goods lending (Fat Llama). The core environmental thesis is that higher asset-utilisation rates reduce the total stock of manufactured goods needed to serve a given level of demand.

Product-as-a-service (PaaS). A business model in which manufacturers or intermediaries retain ownership of physical products and sell outcomes or usage time to customers. Subscribers pay per use, per hour, or per month, and the provider handles maintenance, repair, and end-of-life recovery. PaaS models create direct financial incentives for durability, repairability, and high utilisation because the asset remains on the provider's balance sheet.

Circular economy integration. PaaS sits within the broader circular-economy framework as a strategy for extending product lifetimes and closing material loops. When combined with design-for-disassembly and remanufacturing, PaaS can extend asset lifecycles by 2x to 5x compared to linear purchase-and-dispose patterns (Accenture, 2024).

Rebound effects. The phenomenon whereby efficiency gains or cost savings from sharing are partly or fully offset by additional consumption. Direct rebound occurs when cheaper access leads to more use of the shared product (e.g., more kilometres driven because ride-hailing is cheap). Indirect rebound occurs when money saved on one category is spent on other resource-intensive goods or services.

Asset-utilisation rate. The percentage of available time or capacity during which an asset is actively used. Privately owned cars sit idle approximately 95% of the time (OECD, 2024). Shared vehicles can achieve 30% to 60% utilisation, and industrial PaaS equipment often exceeds 70%.

Total cost of ownership (TCO) vs. total cost of access (TCA). TCO captures purchase price, maintenance, insurance, depreciation, and disposal costs over an asset's life. TCA captures subscription fees, usage charges, and any penalties. For consumers, TCA is typically lower when utilisation is below 40% to 50% of capacity; above that threshold, ownership often becomes cheaper.

What's Working and What Isn't

What's Working

B2B equipment-as-a-service is scaling profitably. Hilti's Fleet Management programme, which leases power tools to construction firms with full maintenance and replacement coverage, now serves over 300,000 customers across 120 countries and has driven a measurable 2.5x increase in average tool lifespan compared to customer-owned equivalents (Hilti, 2025). Hilti reports that Fleet customers generate higher lifetime value and lower churn than outright purchasers. Rolls-Royce's TotalCare programme, which charges airlines per engine flying hour rather than selling engines outright, now covers more than 50% of the company's installed wide-body fleet and has reduced unplanned engine removals by 25% through predictive maintenance enabled by sensor data (Rolls-Royce, 2025).

Mobility sharing is consolidating around sustainable unit economics. After years of unprofitable growth, shared-mobility providers are reaching scale in dense urban markets. Lime reported its first full year of EBITDA-positive operations in 2024, driven by improved vehicle durability (fourth-generation e-scooters with 24-month lifespans versus 3 months for first-generation units) and dynamic pricing (Lime, 2025). Citroën's Ami, a lightweight two-seat EV designed for urban car-sharing, has been deployed across Free2Move fleets in Paris, Madrid, and Washington, D.C., with average utilisation rates above 35%.

Fashion rental and resale are proving environmental benefits at scale. The global secondhand and rental apparel market reached $257 billion in 2025, growing 15 times faster than the broader retail clothing sector (ThredUp, 2025). Rent the Runway, which operates a clothing-rental subscription service, published lifecycle-assessment data showing that each rented garment displaces an average of 3.2 new purchases over its serviceable life, reducing per-wear carbon intensity by 62% after accounting for logistics and dry-cleaning emissions (Rent the Runway, 2025). Vestiaire Collective, a luxury resale platform, processed 23 million items in 2025 and commissioned a study finding that resale extends average garment life by 2.2 years.

Regulatory tailwinds are strengthening. The EU's Ecodesign for Sustainable Products Regulation (ESPR), which entered force in 2024, mandates durability, repairability, and recyclability requirements for a widening range of product categories. Digital Product Passports, required for textiles and electronics from 2027, will provide the data infrastructure that PaaS providers need to track asset condition, maintenance history, and material composition across multiple use cycles (European Commission, 2024). France's anti-waste law (AGEC) already requires manufacturers to display repairability scores, and early evidence suggests this has shifted consumer preferences toward more durable products.

What Isn't Working

Consumer sharing platforms struggle with rebound effects. Research by Warmington-Lundström and Laurenti (2024) analysing ride-hailing data across 12 European cities found that 35% of ride-hailing trips replaced walking, cycling, or public transit rather than private car use, and that users spent savings from not owning a car on air travel and electronics. The net lifecycle emissions reduction from car-sharing was only 40% of the gross estimate once rebound was incorporated. Airbnb's expansion has been linked to increased total travel demand in several markets, complicating claims about resource efficiency.

Last-mile logistics erode environmental gains in consumer PaaS. Subscription services for everyday goods, such as Grover's electronics rental or Swapfiets' bicycle subscription, require frequent collection, delivery, inspection, and redistribution of assets. A 2025 study by the Fraunhofer Institute found that reverse-logistics emissions accounted for 18% to 30% of the total lifecycle carbon footprint for consumer electronics rental, partially offsetting the benefits of extended asset life (Fraunhofer, 2025). The environmental calculus is most favourable for high-value, low-frequency-swap items and least favourable for low-value items shipped frequently.

Small-scale peer-to-peer sharing has stalled. Platforms enabling neighbours to share tools, kitchen appliances, and outdoor equipment have struggled to achieve the critical mass needed for convenient, reliable matching. Peerby, a Dutch P2P lending app, pivoted to a managed rental model after finding that organic peer transactions plateaued at low volumes. The transaction costs (listing, messaging, coordinating handoff) relative to the value of items shared remain prohibitively high for sub-$50 goods.

Affordability and equity concerns persist. PaaS subscription fees can exclude lower-income households, who may find upfront purchase of a used item cheaper than ongoing rental payments. Grover's electronics subscription, for instance, charges a monthly fee that over 24 months exceeds the retail price of many devices. Without subsidised tiers or income-adjusted pricing, PaaS risks becoming a convenience product for affluent consumers rather than a pathway to broad-based sustainable consumption.

Key Players

Established Leaders

• Hilti — B2B tool-fleet-management pioneer; 300,000+ customers; 2.5x asset-life extension.
• Rolls-Royce — TotalCare engine-as-a-service programme covering 50%+ of wide-body fleet.
• Rent the Runway — Fashion-rental subscription with published LCA data; NYSE-listed.
• Lime — Global shared micromobility operator; EBITDA-positive in 2024.
• Vestiaire Collective — Luxury fashion resale; 23 million items processed in 2025.

Emerging Startups

• Grover — Consumer electronics subscription service across 5 European markets; 500,000 active subscribers.
• Swapfiets — Bicycle-as-a-service in 50+ European cities with integrated maintenance.
• Cocycles — B2B circular-logistics platform optimising PaaS reverse supply chains.
• Lizee — White-label rental-as-a-service SaaS enabling brands (Decathlon, Petit Bateau) to launch rental programmes.

Key Investors/Funders

• Ellen MacArthur Foundation — Drives circular-economy research and convenes the CE100 network of PaaS practitioners.
• European Investment Bank — Provided €200 million in circular-economy lending in 2024, including PaaS model financing.
• Circularity Capital — Scotland-based growth-equity fund focused exclusively on circular and sharing-economy businesses.
• Goldman Sachs Sustainability — Led funding rounds for Vestiaire Collective and Grover.

Examples

Decathlon's rental programme. The French sporting-goods retailer launched equipment rental in 900 stores across 25 countries in 2024, allowing customers to rent tents, kayaks, and ski gear for short-term use. Internal data show that rented items achieve 7x higher utilisation than purchased equivalents and that 85% of rental customers are incremental (they would not have purchased the item). Decathlon projects that rental will represent 10% of revenue by 2028 and has partnered with Lizee to manage reverse logistics, cleaning, and quality inspection (Decathlon, 2025).

Signify's Light-as-a-Service. Signify (formerly Philips Lighting) retains ownership of lighting hardware installed in commercial buildings and charges customers per lux of illumination delivered. Because Signify earns more by keeping fixtures operational longer, it has redesigned luminaires for modularity, enabling component-level replacement rather than whole-unit disposal. Schiphol Airport, a flagship customer, achieved 50% energy savings and a fully circular lighting system under this model (Signify, 2025). The LaaS contracts typically run 10 to 15 years, and Signify recovers and remanufactures 95% of returned components.

Volvo's Care by Volvo subscription. Volvo offers all-inclusive vehicle subscriptions covering insurance, maintenance, and roadside assistance in 12 markets. The programme now accounts for over 15% of Volvo's retail deliveries in Sweden and is being expanded to electric models exclusively from 2026. Volvo reports that subscription vehicles are returned in better condition than leased vehicles, enabling higher residual values and more effective second-life remarketing (Volvo, 2025). The company uses subscription-fleet telematics data to optimise maintenance intervals, reducing per-vehicle service costs by 12%.

Action Checklist

• Evaluate PaaS fit for your product portfolio. Identify products with high idle time, significant maintenance requirements, or rapid technology cycles where access models can outperform ownership on both cost and sustainability.
• Model lifecycle emissions including reverse logistics. Use lifecycle assessment (LCA) that accounts for collection, cleaning, refurbishment, and redistribution to ensure net environmental benefit.
• Quantify and mitigate rebound effects. Track how cost savings from sharing are spent and design nudges, carbon budgets, or bundled offsets to address indirect rebound.
• Design for durability and modularity. PaaS unit economics improve dramatically when products survive multiple use cycles. Prioritise component-level replaceability, standardised fasteners, and durable materials.
• Build digital-asset tracking infrastructure. Implement Digital Product Passports or equivalent systems to monitor asset condition, maintenance history, and material composition across the lifecycle.
• Ensure equitable access. Offer income-adjusted pricing tiers, partner with social-housing associations, or deploy assets in underserved communities to prevent PaaS from becoming a premium-only proposition.
• Prepare for ESPR and DPP compliance. Map your product categories against the EU's Ecodesign for Sustainable Products Regulation timeline and begin collecting the data required for Digital Product Passports.

FAQ

Does sharing actually reduce emissions, or do rebound effects cancel out the benefits? The answer depends on the model and context. B2B PaaS with controlled asset pools (Hilti, Rolls-Royce, Signify) consistently demonstrates net reductions of 25% to 60% in lifecycle emissions because the provider internalises incentives for durability and efficiency. Consumer sharing platforms show more mixed results. Warmington-Lundström and Laurenti (2024) found that rebound effects erode 20% to 60% of gross savings in mobility sharing. The key determinant is whether sharing displaces new production or merely adds a new consumption channel alongside existing ownership.

Which product categories are best suited to PaaS models? Products that are expensive, used intermittently, require maintenance, or depreciate rapidly are strongest candidates. Industrial tools, lighting systems, heavy construction equipment, medical devices, and high-end fashion perform well. Low-value, frequently used everyday items (kitchenware, basic clothing) are generally poor fits because reverse-logistics costs overwhelm the per-use revenue.

How do PaaS models affect manufacturer profitability? Initially, PaaS compresses revenue recognition because income is spread over the service period rather than booked at point of sale. However, mature programmes report higher customer lifetime value, more predictable revenue streams, and valuable usage data that informs R&D. Hilti's Fleet Management customers generate 30% higher lifetime revenue than one-time purchasers (Hilti, 2025). The transition requires significant working-capital investment because the manufacturer retains ownership of the asset fleet.

What role does regulation play in accelerating PaaS adoption? Regulation is becoming a major catalyst. The EU's ESPR creates mandatory durability and repairability requirements that favour PaaS-oriented design. Digital Product Passports provide the data backbone for tracking assets across multiple use cycles. France's AGEC law and its repairability index have already shifted consumer preferences. Extended Producer Responsibility (EPR) schemes that hold manufacturers financially responsible for end-of-life management further incentivise ownership-retention models.

Is PaaS accessible to small and medium enterprises? Yes, increasingly so. White-label PaaS enablers such as Lizee and Cocycles allow SMEs to launch rental programmes without building in-house logistics. Cloud-based asset-management platforms reduce the IT investment required. The EIB's circular-economy lending facility and national green-finance programmes in France, Germany, and the Netherlands offer concessional financing for SMEs transitioning to service models.

Sources

• PwC. (2025). The Sharing Economy: Global Market Sizing and Growth Projections 2025-2030. PricewaterhouseCoopers.
• Ellen MacArthur Foundation. (2025). Access Over Ownership: Material and Emissions Reduction Potential in the EU. Ellen MacArthur Foundation.
• Warmington-Lundström, J. and Laurenti, R. (2024). Rebound Effects in the Sharing Economy: A Multi-City Analysis of Ride-Hailing and Car-Sharing. Journal of Cleaner Production, 434, 139982.
• Accenture. (2024). Product-as-a-Service: Lifecycle Extension and Circular Value Creation. Accenture Strategy.
• OECD. (2024). Urban Mobility Indicators: Vehicle Utilisation Rates Across OECD Cities. OECD Publishing.
• Hilti. (2025). Fleet Management Impact Report: Asset Longevity, Customer Retention, and Environmental Performance. Hilti Group.
• Rolls-Royce. (2025). TotalCare Programme: Performance Metrics and Predictive Maintenance Outcomes. Rolls-Royce Holdings.
• Lime. (2025). Annual Impact Report: Vehicle Durability, Utilisation, and Financial Performance. Lime.
• ThredUp. (2025). Resale Market Report: Global Secondhand and Rental Apparel Market Sizing. ThredUp.
• Rent the Runway. (2025). Lifecycle Assessment: Per-Wear Carbon Intensity of Rented vs. Purchased Garments. Rent the Runway.
• Fraunhofer Institute. (2025). Reverse Logistics Emissions in Consumer Electronics Rental: A Lifecycle Perspective. Fraunhofer ISI.
• European Commission. (2024). Ecodesign for Sustainable Products Regulation: Implementation Roadmap and Digital Product Passport Requirements. European Commission.
• Decathlon. (2025). Circular Services Report: Equipment Rental Programme Performance and Expansion Plans. Decathlon.
• Signify. (2025). Light-as-a-Service: Circular Lighting at Schiphol Airport and Commercial Portfolio. Signify.
• Volvo. (2025). Care by Volvo Subscription Programme: Fleet Performance and Sustainability Metrics. Volvo Cars.