Using business model design to promote care in leased products

Sharing, renting and leasing business models are expected to contribute to sustainability by increasing the use and extending the lifespan of products. However, in practice this might look different. Are leased products indeed less well looked after than their owned counterparts? A new study in the Journal of Business Research reveals that there is truth there to the saying “don't be gentle it's a rental” and draws on work with designers to come up with solutions for what can be done about this.

The sharing economy and circular economy have both touted access-models as alternatives to ownership that will help us reach our sustainability goals. When it comes to short-term rental business models, there is increasing evidence that this is not necessarily the case. Shared mobility, like the notorious e-scooter, are frequently found in strange places and poor condition.

Lower levels of care for leased washing machines

Leasing, on the other hand, seems to resemble ownership more closely as a single user keeps a product for a longer time and as a result must also carry out basic maintenance. This could include, for instance, pumping the tires of a leased bicycle or preventing moisture build-up and mold inside washing machines through cleaning and leaving the door open. But does this extended form of rental really make a difference to how well a product is cared for?

It’s clear that consumers are less gentle with leased products, however, this can be addressed through a range of different, practical design strategies and solutions that we provide in our paper

The authors surveyed users of leased and owned washing machines and found significantly lower care levels for leased washing machines. “This is problematic as low care levels mean that products might break sooner and might be discarded prematurely by the provider – thus reducing or eliminating the sustainability potential of this business model,” explains author Vivian Tunn, an assistant professor at Utrecht University’s Copernicus Institute of Sustainable Development.

Ten design strategies to stimulate product care

To address this issue, the authors collaborated with expert designers to envisage business model design strategies that would stimulate product care for leased washing machines. This resulted in ten design strategies and 23 design solutions.

“To test the utility of these design strategies, we then interviewed practitioners working for companies that lease washing machines,” explains Tunn. These interviews highlighted the strategies perceived as most realistic and most likely to stimulate desirable user behaviour. In addition, the interviews revealed levers and barriers to promoting product care. For example, the range of products impacts a provider’s ability to implement product-specific care strategies, the leasing service can be designed to deter or attract certain user groups, and provider control over the supply chain determines which product care strategies they can implement.

“It’s clear that consumers are less gentle with leased products, however, this can be addressed through a range of different, practical design strategies and solutions that we provide in our paper,” concludes Tunn.