Construction companies traditionally view workers’ earnings as a variable cost and the capital that.

Construction companies traditionally view workers’ earnings
as a variable cost and the capital that the firm owns—particularly heavy
equipment such as bulldozers—as a fixed cost. The sharing economy is changing
that. When Platinum Pipeline Inc., a firm that installs water and sewer lines,
won a new job, it needed a third bulldozer. Rather than buy one, the firm’s
president, Manuel de Freitas, merely called up an app on his phone and found a
Caterpillar D6T dozer that he could rent for two months at $7,500 a month. The
rental firm, Yard Club Inc., finds idle heavy equipment and rents it—much
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Construction companies traditionally view workers’ earnings
as a variable cost and the capital that the firm owns—particularly heavy
equipment such as bulldozers—as a fixed cost. The sharing economy is changing
that. When Platinum Pipeline Inc., a firm that installs water and sewer lines,
won a new job, it needed a third bulldozer. Rather than buy one, the firm’s
president, Manuel de Freitas, merely called up an app on his phone and found a
Caterpillar D6T dozer that he could rent for two months at $7,500 a month. The
rental firm, Yard Club Inc., finds idle heavy equipment and rents it—much as
Airbnb Inc. does with spare bedrooms. Often, rental companies own this
equipment. Renting construction equipment is catching on. In 2014, rental
companies owned 54% of U.S. construction equipment, up from 40% a decade earlier.
According to one forecast, the share could top 60% within the next 5 to 10
years. In 2018, Global Market Insights predicted that the construction
equipment rental market will grow at over 4% a year from 2018 to 2024. If
construction firms can rent heavy equipment, their long run may be much shorter
than if they have to buy the equipment.

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