Growing pains in the sharing economy


As a business writer, I’ve got used to the corporate jargon. But at one time I found it pretty confusing. Why did everyone want to share information with me? Were they going to divide it into pieces, like a cake? Once I was asked if I’d share my phone. But how was that possible without going back to the old party line days? What they wanted, of course, was my number, not my handset or my line.

Now we’re talking about the sharing economy. And here, the word makes more sense – as does the concept. The idea is to reuse, borrow or pass around existing assets (cars, DIY equipment and the like) rather than buy new things that mostly sit in a cupboard, but that have eaten up a lot of raw materials and energy in their manufacture.

So how good are we at sharing? It certainly doesn’t come naturally. As children, we have to be taught to share our toys and birthday cakes (search online for “teaching your child to share” and you’ll find a wealth of advice).

For adults, some things are easy to share – even preferable when it means less hassle. Just look at the increasing numbers of people using car share services such as Zipcar. And who needs to have their garage clogged up with DIY equipment that’s seldom used when a power drill or stepladder could be borrowed from a neighbour?

Of course, people have been doing this for generations. But the web – the world’s matchmaker – is turbo-charging the sharing economy, connecting people who’ve never met and in ways that would not otherwise be possible.

Sites that facilitate sharing and exchanging are proliferating. There are services likeAirbnb for those who want to share their homes. Swapdom makes possible group exchanges, where users can give to one person but receive from another.

And on Yerdle, people can pass on things they don’t want and earn credits that can be used to get things they do want. A customised list they receive daily lets them know what people are giving away.

Yet when it comes to sharing, it isn’t always easy. London taxi drivers weren’t too happy when Uber, the car service app, started sharing their customer base, for instance.

There are practical problems, too. Some assets aren’t easily shared. It would be great if we could reduce the energy and waste needed for the production of large household appliances, but how exactly are we to share dishwashers or refrigerators?

And while the web makes it easy to share your accommodation and generate some extra income, it’s one thing to do so when your home is a house – but another when living cheek by jowl in an apartment building where your neighbours have to put up with tourists traipsing up and down the corridor.

When it comes to reusing or leasing products and services, there are other questions to tackle. Whose responsibility is it, for example, if something passed on via a sharing website turns out to be toxic or physically unsafe? In some jurisdictions, home sharing means breaching the terms of tenant leases or contravening local legislation banning short-term renting.

Some are addressing these questions. Law firm Allen & Overy is working with Circle Economy – which works to accelerate the shift to a circular economy – to identify and resolve legal uncertainties such as who owns products that are fixed to the superstructure of a building and who is responsible for insuring leased goods.

The road to the sharing economy won’t be easy. New rules will have to be devised to ensure that when we share other people’s stuff, we can expect the same safety standards we enjoy when using a product we own. Regulators need to move faster, to keep up with innovation and advances in technology.

Here’s why. With consumption levels more than doubling in the past 50 years and up to 2bn more aspiring consumers on the planet, humanity is, as the WorldWatch Institute puts it, “outstripping its resource base at an unprecedented global scale”.

In short, the world is fast running out of natural resources. And there are only so many efficiencies to be gained by cutting waste and energy from manufacturing and service provision. In the end, the sharing economy is an idea we’ll all need to get used to.

This post originally appeared on my LinkedIn Influencer page

Posted in Business & Environment >, Business & Society >, The Future of Capitalism>, Tomorrow's Economy > |

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