Elegance With a Purpose: Assessing the Environmental and Social Efficacy of a High-End Clothing and Bag Rental Model in Jakarta

Abstract

My research analyzed the environmental and social efficacy of the high-end fashion rental business model in Jakarta. With fashion waste contributing 10% of global greenhouse gas (GHG) emissions, the fast fashion industry has exacerbated this issue by lowering the average fashion goods utilization rate, with items on average discarded after only seven wears (McKinsey and Company, 2023; Shank & Bédat, 2016). Despite its economic benefits, the industry's environmental harm necessitated exploring circular fashion business models, such as fashion rental, to mitigate waste and emissions. Experts have advocated for reuse with maintenance over recycling due to higher utilization rates. The rental model reduced new production and landfill waste. While previous research focused on fashion recycling and resale, studies on rental models, particularly in developing countries with weaker environmental regulations, were lacking (Farfetch, 2019; Herold & Prokop, 2023; Semba et al., 2020). Additionally, garment factories had high accident rates due to unethical labor practices. A rental business model allowing workers to repair items from home could improve livelihoods. Thus, my research examined both the environmental and social efficacy of implementing this model in Jakarta, using Luxeloop, a peer-to-peer high-end fashion rental platform, as a case study. To address my research questions, I analyzed Luxeloop’s customer and employee data from June 2024 to February 2025. First, I measured displacement rates by surveying customers who had rented during this period, estimating how rentals reduced new purchases. The findings confirmed that high-end fashion rentals mitigated the need to buy new items. Second, using Luxeloop’s transaction history database, I estimated the carbon dioxide (CO