Sharing business or benevolence?

Home Technologist 05 Sharing business or benevolence?

Everyone has heard of Uber and AirBnB, but they are not the only game in town. Some platforms are purely altruistic, some very capitalistic. Technologist offers a road map of a complex landscape in an age when freedom is an asset and fewer people want to own a big place filled with objects they rarely use.

Bookserf, Erbil Sivaslioglu and Kerem Gunes

The idea of “sharing” has a warm and fuzzy connotation – let’s just be friends and not too possessive of our goods – and that indeed is how the first community-based initiatives, such as FreeCycle and Couchsurfing, were conceived. Soon, however, they inspired more ambitious entrepreneurs who rewired the concept to build businesses that, like Uber, are now valued in the billions. Clearly there is money to be made: the auditing company PwC recently estimated that by 2025 the sharing economy could generate annual revenues up to $335 billion worldwide.

Losing its substance in the process, the term “sharing” has been criticised as misleading. “Sharing, in its purest form, should be non-commercial and between people who know each other,” says Fleura Bardhi, professor of marketing at the Cass Business School, City University London. “As soon as a company is involved, it qualifies as a service, helping someone obtain something from someone else against a sum of money.” From this perspective, the sharing economy has seen its grounding social values turn into individualistic and utilitarian ones. In a study published in 2012, Bardhi and co- author Giana M. Eckhardt, a professor of marketing at Royal Holloway, University of London, decided to bust the myth. “Today, the sharing economy has mostly become an access economy, an economic exchange that gives momentary access to products,” Eckhardt says.

It is no accident that the sharing economy is thriving. Three main reasons are deeply rooted in the daily life of millennials, the generation that became young adults in the 21st century: an uncertain financial future, the threat of climate change and the mobile Internet boom. “On top of that, globalization is changing consumer habits,” says Bardhi. “The 21st century is characterized by a growing crowd of highly mobile urban professionals who have a completely different attitude towards ownership from their parents’.”

Cars, for example, used to be considered a hallmark of social status, but for many people they are now a financial and logistic burden. According to a recent survey by Co-operatives UK, eight out of 10 people believe that sharing makes them happy, and they know it is good for the environment, too. Not everyone is convinced. “So far, I think the sharing model is first and foremost media hype, says Frank-Martin Belz, professor of Corporate Sustainability at the Technische Universität München. If we look at the total numbers of car owners as compared to the number of car sharers, the latter is marginal. And cars still significantly symbolize social status in emerging economies.” Even from an environmental perspective, “the potential for change that the sharing economy represents is not yet clear,” says Elena Denaro, a PhD candidate in Sociology at the London School of Economics.

start-ups map

 

The sharing economy faces a challenge that has always existed in the world of commerce: trust. Cheques, contracts, guarantees – all were invented so that seller and buyer could seal a deal. The solution, says Frédéric Mazzella, founder of the French ride-sharing company BlaBlaCar, passes through the “reputation economy”, a new social contract based on online profiles and ratings that increasingly convince users that it is safe to deal with complete strangers. “Ten years ago, it was unusual to display personal information on a website, he says, but today it’s perfectly accepted. Coupled with a growing interest in sharing for different reasons, social networks emerged as the perfect marketplaces for the collaborative economy.”

If collaborative consumption is a business model that is here to stay, its scope is not yet fully understood. “What will happen over the next couple of years will tell us what the boundaries are going to be”, says Giana Eckart of Royal Holloway, University of London. “Entrepreneurs have to understand that the future of the sharing economy is highly product-dependant. For example, people pay a lot more attention to what they eat than what they use. For most users, sleeping at a stranger’s place seems safer than eating at a stranger’s table.

Karos_2Greener, cheaper, happier commute KAROS Tristan Croset + Olivier Binet Paris, France

What if you need a ride but haven’t had time to plan it in advance? The answer could be the French start-up Karos. “Our interface uses big data from geolocalisation, the commuting habits of users and machine-learning algorithms to exploit the short-distance segment that is ignored by ride-sharing platforms like BlaBlaCar”, explains co-founder Tristan Croiset. His partner, Olivier Binet, adds that “no one can anticipate and plan such short trips early enough to have a formal agreement with another user”. With the help of their algorithm, users can reach the ultimate mobility in their urban environment. Based on their habits and usual commute, pedestrians are notified if a driver going to a similar destination is expected to cross their path. The lift costs no more than a bus ticket for the same distance.

The library 2.0 BOOKSERF Erbil Sivaslıoglu + Kerem Gunes Istanbul, Turkey

“I thought it would be cool to meet people after knowing what books they loved, instead of vice-versa.” Kerem Güneş has a true passion for literature. But finding foreign-language or art books in Istanbul is rare and expensive. To build a community of like-minded people, he founded BookSerf together with his friend Erbil Sivaslıoğlu. “On BookSerf you write something about yourself, choose the book you’d like to borrow and why you’re interested in reading it. Anyone who has a copy can arrange a place and time to meet,” says Erbil. “Libraries don’t celebrate you for borrowing a novel. Every book you choose to read from BookSerf will be handed to you by someone who has read it and loved it,” he adds. And if you are short of inspiration, browsing the profiles will give you some ideas.

Daan Weddepohl, Peerby

Share what you need PEERBY Daan Weddepohl Amsterdam, Netherlands

What if you need a mixer or a ladder or a power drill, and you need it right away? Go straight to Peerby. To optimize the process and differentiate this sharing site from others, founder Daan Weddepohl turned the problem on its head. “Instead of having users list everything they own and would be happy to share, they can post a request for something they urgently need and reach out to the community,” he explains. The result is impressive. With Peerby 80 percent of requests are fulfilled within 30 minutes of posting. “Peerby works mostly for items people use only from time to time. This shows how the sharing economy can exploits idle capacity. It is more difficult for someone to find something, a bike for example, that everybody uses regularly.” Launched in 2012, the idea was initially tested in Amsterdam but has now expanded to 20 cities in Europe and 10 in North America.

By Luc Henry @heluc

 

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