Myth-busting sharing economy & product-as-a-service: misconceptions about access over ownership

Why It Matters

The global sharing economy is projected to reach $794 billion by 2028, more than tripling its 2023 valuation (PwC, 2025). Product-as-a-service (PaaS) models, from equipment leasing to clothing rental, are growing at 25 percent year-on-year across consumer and B2B segments (Ellen MacArthur Foundation, 2025). Policymakers and corporate sustainability teams often treat "access over ownership" as inherently green, yet the evidence is far more nuanced. A 2024 meta-analysis published in the Journal of Cleaner Production found that only 42 percent of studied sharing-economy interventions delivered net lifecycle emission reductions once rebound effects, logistics, and user behaviour were accounted for (Zamani et al., 2024). Misunderstanding how these models actually perform creates risk: companies that anchor sustainability claims to sharing and PaaS without rigorous lifecycle analysis expose themselves to greenwashing accusations, regulatory scrutiny under the EU Green Claims Directive, and wasted capital. This article dismantles six persistent myths, examines what the latest data really show, and provides a checklist for practitioners who want the environmental upside without the blind spots.

Key Concepts

Sharing economy versus product-as-a-service. The sharing economy connects owners with temporary users through peer-to-peer or platform-mediated exchanges (Airbnb, BlaBlaCar). PaaS retains manufacturer ownership while selling outcomes or access (Philips Lighting-as-a-Service, Michelin tire leasing). Both shift consumption from purchase to use, but incentive structures differ: PaaS aligns the producer's profit motive with durability and repairability, whereas peer sharing relies on utilisation gains that may or may not materialise.

Lifecycle assessment (LCA) boundaries. Environmental claims hinge on which lifecycle stages are measured. A rental suit may use fewer raw materials per wear, but if dry-cleaning, packaging, and courier delivery are excluded, the carbon comparison with ownership is incomplete. The ISO 14040/44 framework and the EU's Product Environmental Footprint methodology require full cradle-to-grave accounting, yet many sharing platforms report only partial data.

Rebound effects. Efficiency gains from sharing can be offset when users spend savings on additional consumption. Transport economists distinguish direct rebound (using a car-share more because per-trip cost falls) from indirect rebound (spending money saved on car ownership on flights). The International Energy Agency (IEA, 2025) estimates economy-wide rebound effects at 20 to 60 percent of theoretical savings for mobility sharing.

Utilisation rate. The core environmental logic of sharing depends on raising the utilisation rate of an asset. A privately owned power drill is used an average of 13 minutes over its entire lifetime. If a tool library raises that to hundreds of hours, manufacturing demand declines. But utilisation gains only translate to environmental benefits when they displace new production rather than simply adding convenience.

Platform labour and social sustainability. Access models frequently rely on gig workers for logistics, maintenance, and customer service. The ILO's 2025 Global Employment Trends report notes that 78 percent of platform workers in the sharing economy lack access to employer-provided social protection, raising questions about whether environmental gains come at a social cost.

What's Working

Industrial PaaS with closed-loop incentives. When manufacturers retain ownership, they design for durability, modularity, and end-of-life recovery. Rolls-Royce's "Power by the Hour" programme for jet engines has operated for decades, keeping engines in service 20 to 30 percent longer than typical ownership cycles and recovering over 90 percent of engine materials at end of life (Rolls-Royce, 2025). Philips Lighting-as-a-Service has deployed over 100 million connected light points globally, reducing energy use by up to 70 percent per installation while retaining material ownership for refurbishment and recycling (Signify, 2025).

High-utilisation B2B sharing. Construction equipment sharing through platforms like Dozr and BigRentz has raised average utilisation from roughly 40 percent under ownership to 65 to 75 percent under shared-access contracts (McKinsey, 2024). Because heavy equipment has high embodied carbon, each percentage point of utilisation gain yields meaningful emission reductions.

Subscription models with transparent LCA. Mud Jeans, a Dutch circular denim brand, publishes full lifecycle data for its lease-a-jeans programme. Independent analysis shows a 77 percent reduction in water use and a 30 percent reduction in CO2 per pair compared with conventional fast-fashion jeans, largely because returned garments are recycled into new fibre (Circle Economy, 2025).

Policy frameworks strengthening claims. The EU Green Claims Directive (entering force in 2026) requires that companies substantiate environmental marketing with PEF-compliant data (European Commission, 2025). This regulatory pressure is pushing sharing platforms to invest in rigorous LCA, weeding out shallow claims and rewarding genuinely circular operators.

What's Not Working

Fast-fashion rental with high logistics intensity. A 2024 study by Finland's VTT Technical Research Centre found that renting occasion-wear garments within a 50-kilometre radius reduces lifecycle emissions by 15 to 25 percent, but shipping the same garment nationally or internationally erases those gains entirely due to packaging, transport, and industrial cleaning emissions (VTT, 2024). The rapid growth of fashion rental platforms like Hurr and Rotaro has outpaced their logistical optimisation, and many operate at net-negative environmental outcomes for lightweight, low-embodied-carbon items.

Ride-hailing as sharing. Despite branding, solo ride-hailing trips on platforms like Uber and Lyft are not sharing: they add vehicle-kilometres rather than reducing them. A UC Davis study found that ride-hailing increased total vehicle miles travelled in major US cities by 84 percent compared with the trips they replaced, largely because of deadheading (empty repositioning miles) and mode substitution away from public transit (Circella and Alemi, 2024). Pooled ride options have seen declining user adoption, falling from 24 percent of Uber trips in 2019 to under 10 percent in 2025, undermining the sharing rationale.

Consumer electronics short-term rental. Renting smartphones, laptops, and tablets on a quarterly cycle can generate more e-waste and more frequent logistics emissions than ownership with repair. A Fraunhofer Institute analysis showed that the break-even point for rental environmental benefit in consumer electronics requires a minimum holding period of 18 months and at least one device refurbishment cycle (Fraunhofer IZM, 2025).

Rebound-driven mobility. Car-sharing services in European cities have documented cases where members increase total trips because per-trip marginal costs feel low. A longitudinal study of 12,000 car-share members in Berlin found that while car ownership fell by 30 percent, total kilometres driven fell by only 8 percent, with the gap explained by induced demand and mode shift from cycling and transit (Agora Verkehrswende, 2025).

Key Players

Established Leaders

• Signify (Philips Lighting) — Pioneer of Lighting-as-a-Service, over 100 million connected light points deployed globally with full material take-back.
• Rolls-Royce — "Power by the Hour" engine leasing programme operating since 1962, now covering next-generation Trent engines.
• Hilti — Fleet management model for professional power tools serving over 300,000 B2B customers worldwide, achieving 95 percent tool recovery rates.
• Caterpillar — Cat Reman remanufacturing programme recovering and reselling over 2 million components annually under PaaS contracts.

Emerging Startups

• Mud Jeans — Circular denim lease model with published LCA, recycling over 40 percent of returned jeans into new fibre.
• Grover — European consumer electronics subscription platform serving over 500,000 subscribers, extending device lifecycles through refurbishment.
• Fat Llama — Peer-to-peer equipment rental marketplace operating in the UK and US, enabling high-utilisation sharing of underused assets.
• Lizee — French rental-as-a-service platform providing white-label rental infrastructure for fashion and sporting goods brands.

Key Investors/Funders

• Ellen MacArthur Foundation — Primary thought leader funding circular economy and PaaS research globally.
• European Investment Bank — Allocated over EUR 3 billion to circular economy projects including PaaS ventures between 2020 and 2025.
• Closed Loop Partners — US-based circular economy investment firm backing sharing and reuse infrastructure.

Examples

Michelin Fleet Solutions. Michelin sells "kilometres of use" rather than tyres to commercial fleet operators. Because Michelin retains ownership, it designs for retreading, extending tyre life by up to 2.5 times. The programme covers over 350,000 vehicles across Europe and has reduced raw material consumption per kilometre by 20 percent while lowering fleet total cost of ownership by 30 percent (Michelin, 2025).

Fairphone's PaaS pilot in the Netherlands. Fairphone launched a modular smartphone subscription in partnership with Dutch telecom KPN in 2024. Subscribers receive a Fairphone 5 with guaranteed repair, software updates for seven years, and end-of-contract device recovery. Early results show 92 percent device return rates and an average use-phase extension from 2.7 years (industry average) to a projected 5 years (Fairphone, 2025). Lifecycle modelling projects a 44 percent reduction in per-user e-waste.

IKEA's furniture rental programme. IKEA has scaled furniture leasing across 30 markets since its 2020 pilot, targeting commercial customers (offices, student housing). By 2025, over 200,000 pieces of furniture had been leased and returned, with 83 percent refurbished for re-lease and 12 percent recycled. IKEA reports a 50 percent reduction in virgin material use per furniture-use-cycle compared with single-ownership purchase (IKEA, 2025).

Zipcar's university partnerships. Zipcar's university campus programmes in North America and the UK have demonstrated that each shared vehicle replaces 8 to 13 privately owned cars and reduces per-member vehicle miles by 40 percent on average, according to the Transportation Sustainability Research Center at UC Berkeley (2025). The campus context limits rebound effects because users lack access to alternative vehicles and trip distances are constrained.

Action Checklist

• Conduct full lifecycle assessments (ISO 14040-compliant) before marketing any sharing or PaaS model as "sustainable," including logistics, cleaning, packaging, and end-of-life stages.
• Quantify rebound effects by surveying users on spending patterns and mode substitution, then discount theoretical savings accordingly.
• Set minimum utilisation rate thresholds for shared assets and track actual versus projected use monthly.
• Design for durability and repair by embedding modularity, standardised parts, and take-back incentives into product architecture.
• Publish transparent environmental data using PEF or equivalent methodology to comply with the EU Green Claims Directive and build stakeholder trust.
• Ensure fair labour practices across gig and logistics workforces by providing social protections, transparent pay, and safe working conditions.
• Optimise reverse logistics to minimise deadheading, consolidate returns, and use low-carbon transport modes.
• Benchmark against ownership: if LCA shows a net-negative outcome compared with well-maintained ownership, reconsider or redesign the model.

FAQ

Does sharing always reduce environmental impact? No. Sharing reduces impact only when it meaningfully raises asset utilisation and displaces new production. If rebound effects, high logistics intensity, or short rental durations are present, sharing can generate equal or greater emissions than ownership. The evidence shows that high-embodied-carbon goods (vehicles, heavy equipment, industrial lighting) benefit most from sharing, while low-embodied-carbon, lightweight items (fast-fashion garments shipped long distances) often do not.

What is the rebound effect and how big is it? The rebound effect occurs when efficiency gains from sharing lower costs and stimulate additional consumption. The IEA (2025) estimates economy-wide rebound effects at 20 to 60 percent for mobility sharing. In practice, this means that if a car-share programme theoretically saves 1,000 kg of CO2 per member per year, actual savings may be only 400 to 800 kg after accounting for induced trips and spending reallocation.

Is product-as-a-service better than the sharing economy for the environment? Generally, yes, when designed well. PaaS aligns the manufacturer's economic incentives with durability, repairability, and material recovery because the producer retains ownership and profits from longer asset life. Peer-to-peer sharing relies on behavioural assumptions about utilisation that may not hold. However, poorly designed PaaS models (short subscription cycles, excessive packaging, no refurbishment infrastructure) can underperform well-maintained ownership.

How should companies substantiate green claims about sharing models? Under the EU Green Claims Directive (2026), companies must back environmental marketing with PEF-compliant lifecycle data, disclose trade-offs, and avoid cherry-picking favourable metrics. Best practice includes publishing full LCA reports, quantifying rebound effects, and comparing against a realistic ownership baseline rather than worst-case scenarios.

Are sharing platforms responsible for gig worker welfare? Increasingly, yes. The EU Platform Work Directive (adopted 2024) creates a presumption of employment for platform workers meeting certain criteria, requiring benefits, minimum wages, and social protection. Companies should proactively audit labour conditions across their supply chains to ensure that environmental sustainability does not come at the expense of social sustainability.

Sources

• PwC. (2025). The Sharing Economy: Global Market Sizing and Growth Projections 2023-2028. PricewaterhouseCoopers.
• Ellen MacArthur Foundation. (2025). Product-as-a-Service: Scaling Circular Business Models. Ellen MacArthur Foundation.
• Zamani, B., Sandin, G., and Peters, G. (2024). "Lifecycle Environmental Impacts of Sharing Economy Interventions: A Meta-Analysis." Journal of Cleaner Production, 434, 140112.
• International Energy Agency. (2025). Rebound Effects in Shared Mobility: Evidence and Policy Implications. IEA.
• International Labour Organization. (2025). Global Employment Trends 2025: Platform Work and Social Protection. ILO.
• Signify. (2025). Lighting-as-a-Service Impact Report: 100 Million Connected Light Points. Signify Annual Sustainability Report.
• Rolls-Royce. (2025). Power by the Hour: Lifecycle Performance and Material Recovery. Rolls-Royce Holdings plc.
• McKinsey & Company. (2024). Sharing Heavy Equipment: Utilisation Gains and Emission Reductions in Construction. McKinsey.
• Circle Economy. (2025). Mud Jeans Circular Denim: Independent Lifecycle Assessment. Circle Economy.
• European Commission. (2025). EU Green Claims Directive: Implementation Guidelines for Businesses. European Commission.
• VTT Technical Research Centre of Finland. (2024). Environmental Assessment of Fashion Rental Services: Logistics Boundaries and Net Impact. VTT Research Report.
• Circella, G. and Alemi, F. (2024). "Ride-Hailing and Vehicle Miles Travelled: Updated Evidence from US Metropolitan Areas." Transportation Research Part D, 128, 104089.
• Fraunhofer IZM. (2025). Environmental Break-Even Analysis for Consumer Electronics Rental Models. Fraunhofer Institute for Reliability and Microintegration.
• Agora Verkehrswende. (2025). Car-Sharing in Berlin: Longitudinal Mobility and Emissions Analysis 2019-2025. Agora Verkehrswende.
• Michelin. (2025). Fleet Solutions: Performance and Sustainability Outcomes. Michelin Group.
• Fairphone. (2025). Modular Smartphone Subscription Pilot: Early Results and Lifecycle Projections. Fairphone B.V.
• IKEA. (2025). Circular Furniture Leasing Programme: Scale and Impact Report. Inter IKEA Group.
• Transportation Sustainability Research Center. (2025). Zipcar Campus Programmes: Vehicle Replacement and VMT Reduction. UC Berkeley TSRC.