The sharing economy is not a silver bullet for the world’s problems, but if we can address the unknowns, it has unprecedented power to take us towards more caring, collective and sustainable future. By April Rinne, consultant and WEF young global leader.
In but a few short years, the so-called sharing economy has taken the world by storm. It’s an economy based on “access over ownership” and decentralised networks of people connected through new technologies. One needs not look far for examples – from Airbnb to carsharing, bikesharing, tool lending libraries, skillsharing and so on – or statistics regarding its growth: multi-billion dollar company valuations and triple- digit uptake curves amongst almost every demographic imaginable, from Millennials to the elderly.
Yet it is still early, and for every sharing economy opportunity that is praised, it seems there is another critique: incumbents feel threatened, policy-makers are often confused, and labour activists paint doomsday scenarios about the end of employment as we know it.
Today’s sharing economy remains far from reaching its full potential. It may well hold a key to more sustainable, compassionate business and more connected, thriving communities. But to reach this reality will require enlightened leadership (in both private and public sectors), smarter communications, and deeper engagement amongst both grassroots and “grasstops” stakeholders.
To better understand what we’re looking at, let’s briefly take a closer look at what’s driving and enabling the sharing economy. I break this down into three fundamental principles, all of which are required for a true sharing economy platform to succeed:
RESOURCE (UNDER) UTILISATION:
How much we use the things we have. Think about the classic case of the car, which sits idle on average 23 hours per day, or appliances that are used only on rare occasions
New technologies that enable us to connect directly with one another rather than via an intermediary. Think peer-to-peer (P2P) platforms rather than large corporations.
RELATIONSHIPS AND TRUST
New opportunities to build social capital and community Of these three principles, in my opinion the real game- changer is the last one. Pause for a moment and think about the effects of overconsumption. In an ownership era, when the goal is for everyone to own the things they need, this often leads to isolation and disconnectedness. At an extreme, the hallmark of “success” means we don’t know our neighbours. The sharing economy doesn’t solve these problems, but it does start to chip away at what’s gone wrong: it brings us back into relationship with one another.
The sharing economy allows us to rethink both compassion and sustainability, at both micro and macro levels. On the one hand, it allows us to adopt more collaborative and resource-efficient lifestyles – in other words, incorporating compassion and sustainability on an individual basis. It brings us back into relationship with one another and is kinder to our pocketbook, too. On the other hand, the sharing economy enables more connected, resilient cities and can boost societal sustainability. It’s better business for the planet.
For all of these benefits, however, we must also thoughtfully address the unknowns. The sharing economy is neither a panacea nor a silver bullet, and it requires us to be responsible and smart about how it is harnessed.
Let me offer a few examples. First, it is true that many platforms have jumped on the sharing bandwagon but are not necessarily sharing – what some people have called “sharewashing”. In my experience, in 99 per cent of these cases this happens because the third principle – relationships – is missing; it is strictly transactional, rather than tapping into the transformational power of new human connections.
Second, few sharing economy companies proactively track or measure the environmental effects of their activities. The public and policy makers often assume that they do, but with a few exceptions such as Airbnb’s sustainability reports, they are mistaken. For us to really understand the magnitude of potential sustainability benefits, it is essential that sharing economy platforms, participants and researchers prioritise these needs.
And finally, in today’s economy we are faced with a dearth of legal structures that allow us to effectively implement a broader sharing economy vision – one that promotes inclusive business and rethinks ownership on many levels.
I imagine a future in which we may have structures that take advantage of the benefits of both corporations and cooperatives. For example, think about a driver-owned (or partly-driver-owned) ride-sharing platform that also allows for external capital investment for growth. This would be a significant improvement on today’s options, which allow drivers to benefit by earning income but essentially remove them from ownership of the company and thereby from bigger, longer-term upsides.
Moving forward, there is reason to be optimistic that we can address such issues. And if we can do this, we will see not only that the sharing economy is an opportunity to be seized rather than a problem to be solved, but also that it has unprecedented power to improve the world. It can be an extraordinarily powerful, helpful tool in any leader’s toolbox for building better business, making better decisions and creating a brighter, shared future.
SHARING IS CARING