The Wall Street Journal, October 18, 2019: The Rental Economy Is At Risk In A Downturn
Americans don’t own stuff like they used to.
Fewer of them own the homes they live in than in the past, opting to rent instead. A growing share have opted to lease the car they drive—if they drive at all—rather than hold the car’s title. And it seems only aficionados own DVDs or music recordings instead of a streaming subscription.
The shift away from ownership to what KKR’s Paula Campbell Roberts has called the asset-light consumer represents a reshaping of the economy, borne of a confluence of factors, including the scars left by the 2008 financial crisis and the advent of new technologies. It is giving households increased flexibility in how they finance their lives, lowering the debt burden that often comes with ownership.
Investors are loving the rental economy too, paying up for businesses with steady cash flows. But the asset-light consumer’s behavior remains largely untested in a downturn—a rising risk—that could hold nasty surprises.
