Have you ever rented a movie from a video store? Or stayed in a hotel room? Do you belong to a fitness club or gym? If you can answer "yes" to any of these questions (and you probably can), then you’ve paid money not for a product, but rather a service or benefit: enjoying a film, getting a good night’s sleep, or a killer set of abs. All of these businesses fall into the category of the "product service system," and while these examples are really common, many other companies are recognizing the earnings potential that exist for "renting" products rather than selling them outright.

So, why would we care about this on a green lifestyle site? Product service systems (PSS for short) can not only make businesses a lot of money; they can also force them to adopt greener business practices. If you own a video store, constantly having to replace DVDs isn’t in your financial interest: you get paid for a customer’s use of that product, so it’s to your benefit to make those discs last as long as possible. Similarly, a gym that constantly has to replace stationary bikes and treadmills isn’t going to be very profitable. The PSS makes reuse and recycling not just nice ideas for the environment; rather, they become critical to a company’s financial success.

A couple of weeks ago, Rodger Vistacion, the founder and CEO of iLetYou, wrote a post on the company’s blog about the PSS concept:

…most everyday activity involves a Product Service System. You don’t
own the roads you drive on, you don’t own the restaurant or parks you
eat in, and you don’t own the health club that you work out in. When
you take a vacation, luckily you don’t need your own airplane and you
can conveniently get all the comforts of home, transplanted into a new,
relaxing (maybe) environment. If you rent your home, apartment or car,
you’re even more ensconced in Product Service Systems.

A Product Service System also very accurately describes what rental
is. Generally, rental is defined as when you physically pay a fee to
generally own an item for a set period of time. The only really
difference is the fee (it’s simply lending and borrowing otherwise) and
some Product Service Systems use shared, aggregated renting when
appropriate. The two concepts are basicly identical - in many ways, the
exact same thing.

New companies are emerging to fully embrace this trend. Zipcar is a leader in cars, BagBorrowOrSteal in handbags and designer goods, and there are many more emerging examples.

He’s right — there are some very exciting applications of this concept that have significant environmental benefits in terms of reducing, reusing and recycling:

• Interface, Inc.’s "Evergreen Carpet Leasing System" was revolutionary for the commercial floor covering industry: in this program, a customer pays for "floor covering service" rather than buying carpet or other coverings outright. The system has allowed Interface to focus on methods of reusing and recycling old floor covering, as well as maintaining it for as long as possible. If you haven’t reade Interface founder Ray Anderson’s Mid-Course Correction, it’s very inspiring! I can’t say for certain that this program still exists (having trouble finding anything on the Interface web sites).
• SunEdison has brought this concept to solar power: rather than buying solar panels, commercial clients can enter intro a contract with the company and just buy the electricity produced at a set rate. SunEdison owns and maintains the equipment. CitizenRE wants to implement such a system for the residential market… we’re not sure that it will work, though.

These are just two examples — there are plenty more. Companies that keep ownership of their products have a real incentive to "keep it green"… and that’s a model we’d love to see more.

WorldChanging:Product-Service Scenarios for the Bright Green City

Treehugger: Eco-Tip: Product Service Systems

sustainablog: GM, Whole Foods Using ‘Solar Service System’ (please note: sustainablog is my personal sustainability blog.)

Amazon Link: Natural Capitalism: Creating the Next Industrial Revolution