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What are you willing to share?

29-09-2017 | Redacción CEU

Let's share! That is the premise over which the sharing economy concept is built, although not everybody looks at the supposed distributive formula favorably. The popularization of services through platforms like Uber, Blablacar, Airbnb or Wallapop have made this new economic model come out. The collaborative revolution captures the press headlines' attention but, do we know what it really consists of? Is it just a new business model or a whole change of system? Will we end up sharing everything in the future?

 

From sustainable and ecological models, such as repairing your toaster by an unknown in a "repair café" to ingenious and practical systems, like the agreement through a platform with a traveler to carry in his suitcase ham, a gift and the last Christmas forgotten jacket to your cousin Maria who lives on the other side of the country. Collaborative economics can take many and varied forms, but, what is hidden under this concept?

Its retractors consider it an aggressive competitive practice under the guise of benevolence that put  at risk the traditional sectors viability –such as the taxi sector, one of its bigger critics–. Its standard bearers believe that it is an opportunity for both business and citizen empowerment –such as the advocates of cooperatives for the common good–. Fair or not, this new economic model has come strong enough to stay, at least, for a while. At the moment, this emerging economy moves about 28,000 million euros per year in Europe and represents the 1.4% of Spanish GDP. It is expected that in 2025 these figures rocket and, even, multiply.

Mine is yours and yours is mine

Its limits are not very defined and there is no clear consensus in its definition. In general terms, all seem to agree that it is a new economic model that is based on the exchange of goods or services between individuals. It can be online or offline, but is often based on digital platforms that play the intermediary role. Precisely, the technology has been key for its popularization and expansion.

The collaborative economy appears as an innovative response to market failures. In crisis times, money was an even more precious asset and the shared spending was an ingenious idea that allowed everybody to make ends meet. Young companies realized about the business opportunity and began to work on the development of exchange platforms that promoted that sharing economy. Since then, its users and customers share cars, bicycles, houses, wifi, furniture, routes, offices, professional services, knowledge and even umbrellas.

Among the main types of collaborative economy, we can highlight three:

  1. Pure collaborative economy: it is a relationship between equals, services or goods are shared or exchanged, for example, couchsurfing
  2. Between users and professionals: the claimant cannot offer a similar service or equivalent back, they need someone specialized
  3. Shared access: the service or product is offered for a certain time like carsharing or coworking
What are you willing to share?

What happens with the taxis?

The development of this new economic modality has had a strong impact in the mobility sector. In Spain, companies like Uber or Blablacar have turned upside down traditional sectors like the taxi one. The users of this type of transport are caught up between disputes about ethics and savings. For some, the arrival of these shared formulas is a symptom of liberation from a sector cling to the past, for others it is a practice that seriously undermines the competitiveness principles protected under the farce of a more distributive and democratic model. In the same way, the debate crosses other territories like lodging, tourism and the hotel sector, or SMEs and the purchase and sale platforms.

The truth is that we like it or not, the economic system advances increasingly towards this type of  collaborative systems. An example is that after strikes and complaints, the taxi sector in Madrid has decided to reformulate its services so it is not overshadowed by this new type of shared business. They have just announced the launch of a NTaxi app that allows their users to share the same route and cost. These sectors are forced to protect themselves under the premise "renewing or dying" to try to compete in similar conditions and not to disappear.

The controversies of sharing

The proliferation of these kind of projects and peer-to-peer startups has generated a heated debate about the traditional economic scenario transformation:

Regularization and legislation

The push of this sharing economy is often faster than the accompanying legislation. The regulatory framework does not always consider the specificities of these new initiatives. Courts are filled with complaints from the sectors affected by the activity of collaborative economy companies. And in many cases, there is a legal vacuum that can protect an uncompensated development of companies working with this modality.

Service complexity

In order to have a profitable collaborative business, it often begins by offering itself as a free service, users get used to it and do not want to pay later for it. On the other hand, the intermediaries have to face a double challenge: to capture both demand and supply. In addition, in innovative fields such as these are often those who work in this type of business, legislation can be ambiguous and there are risks –an example of this could be the Factoo case–.

Underground economy and transparency

The transparency of collaborative business is at stake. Some companies are criticized for the non-audited services offered by those professionals, or their own taxation in tax havens is called into question.

The labor conditions

Professionals who offer services through these platforms are usually protected by a poor social protection. The freedom and independence that they gain on one hand, is lost in job security on the other. This is the phenomenon known as gig economy.

Is it the way to a better world?

While for some, this model makes clear a change towards a system where the center of everything is the people and the adaptation of services to their particular needs –the future of the common good–. Others show a much less optimistic approach and point out that the large companies interests are still those that mark the economy like, for example, the essayist Tom Slee defended in his book What's yours is mine.

Everything points to the fact that in the next few years the collaborative model will become stronger in our society. This is a great opportunity for progress and innovation, in order to make it sustainable and positive it is essential working on compliance and the development of a regulatory framework, the increase of labor rights, the protection of people who use these means, the good competition and the transparency. In the future of the "let's share!", what are you willing to share?