The Sharing Economy: What’s In It For Cities?

Sally Kneeshaw

By Sally Kneeshaw, on May 20th, 2014

> Read Sally Kneeshaw's articles

Connectivity and digital technologies are fundamentally changing the way we live, work, learn, socialise, and connect. Part of this revolution has involved the rise of peer-to-peer services, allowing people to share everything from their cars and homes to their talent and time. There is nothing new in swapping and sharing, and in fact city life has always facilitated the sharing of space, infrastructure, leisure and culture. But with increasing connectivity this activity is moving to a different level and the so called sharing economy appears to be taking off.

The sharing economy has relevance for city leaders for a number of reasons. It holds the potential to exploit valuable resources more efficiently and more sustainably, a constant challenge for many cities, especially within the current austerity framework. It is no coincidence that many of the recent sharing economy models really took off between 2008 and 2012 in the aftermath of the economic crisis. Of perhaps equal interest is evidence that the experience of sharing builds trust and community cohesion. At a time when the public’s trust in government and institutions is damaged, perhaps city sponsored sharing initiatives can play a role in galvanising citizen involvement and improving social capital.

At the recent OECD Forum 2014,  the Sharing Economy was the focus of one of the main panel debates. Experts from around the globe debated its future as an innovative approach to better sustainability.

Knowledge gap in cities

April Rinne, Sharing Economy and Shareable Cities Expert at Collaborative Consumption, a comprehensive online resource and network,   reported a knowledge gap. Many policy makers currently have low levels of awareness about the sharing economy. She stressed the need for cities to connect, to learn, to share practice and gain insights from each other, in much the same way that URBACT networks do.  April cited Seoul as the best international role model, in part due to the way it uses the sharing concept as a key principle in urban planning. The South Korean megacity has the advantages of a well-developed tech infrastructure, widespread public wifi, and high levels of digital literacy. The Sharing City project launched in Seoul aims to expand sharing infrastructure, promote existing sharing enterprises, incubate sharing economy start-ups, utilise idle public resources, and provide more access to data and digital works.
Models for building trust

Frédéric Mazzella is CEO of successful ride sharing company BlaBlaCar, that allows drivers to find paying passengers on long distance trips.  He described the model that his company has developed to build trust between strangers, by using online profiles, ratings and active moderation of the web platform. BlaBlaCar has conducted surveys on trust levels, and Frédéric believes these studies show that entering ‘sharing mode’ encourages positive behaviours. Lessons from sharing services could be useful for policies aiming to encourage behaviour change in other policy areas such as energy efficiency and mobility.

Regulatory challenges

The sharing economy is creating new business models based on trust and access rather than ownership. But most legal systems are based on ownership and mistrust. The challenge for policy makers is to re-frame regulations to enable rather than impede sharing services.  The ride sharing platform Uber has lawsuits and strong opposition from taxi industries in many of the cities where it has been introduced, and the rapid growth of Air BnB is causing concern about avoidance of tax, displacement of income from the hospitality industry and the need to police commercial abuse.  Sang Woo Kim of Samsung Electronics, one of the major players supplying the technology that enables the sharing economy,  argued that this is one of the signs of disruptive innovation. New models challenge outdated rules and vested interests.

Understanding the impacts

As with many new paradigms there is also a need for new metrics. GDP is based on production of goods and services. The sharing economy creates value from existing assets, so is a jolt to conventional economics. How can we measure the sharing economy and its benefits? Does AirBnB, for instance, bring new local economic benefit, as it claims, to neighbourhoods outside of city centres, where many hosts offer space? How can we better capture both the positive and negative spin offs for the city?

Share your sharing!

In the coming months URBACT aims to deepen knowledge on the sharing economy in cities. We would like to know how cities are supporting such initiatives, what results shared economy approaches are achieving in the most advanced cities, and how results are being measured.

If you have interesting examples to show, we would like to hear about them.  URBACT- which itself is a sharing programme, in the sense of sharing knowledge between cities- will continue to present new cases, in order to support  understanding of the potential benefits of urban collaborative consumption.

Nesta, together with Collaborative Consumption,  is also conducting a survey entitled Taking stock of the European collaborative economy: surveying those operating in it.

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by Sally Kneeshaw, URBACT Thematic Pole Manager

3 Responses to “The Sharing Economy: What’s In It For Cities?”

  1. Eurasmus says:

    https://docs.google.com/forms/d/1oeBVEwwEd9s_HJ3ewoEYRP7VRiS1NBA8i1XpXup81Hw/viewform?usp=send_form

    I’m looking to find out about more about who uses collaborative sharing services such as airbnb or zipcar etc., what trends there are, what are the motivations to use these services, how they can be improved and finally how companies should look to create market in which their products can be shared.

    The results of the survey are available to everyone once you complete the survey. It would be really great to get as many results as possible so that the results actually mean something.
    Thanks in advance!
    Also, if anyone has any suggestions or feedback (constructive please) then that would be great.
    Go Sharing Economy!

  2. [...] car-sharing company Uber have faced regulatory hurdles everywhere they’ve expanded, a true sign of technological disruption. Now, urban darlings like Barcelona, Amsterdam, New York, and San Francisco must ask themselves [...]

  3. [...] car-sharing company Uber have faced regulatory hurdles everywhere they’ve expanded, a true sign of technological disruption. Now, urban darlings like Barcelona, Amsterdam, New York, and San Francisco must ask themselves [...]

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