I recently attended the excellent and thought-provoking Thinking Digital conference. Amongst the many stimulating talks was a session involving a Q&A with a representative from Uber, who went to great lengths to emphasise all of the benefits of the Uber business model to drivers. Coincidentally, I had read a news article earlier that day reporting on Uber’s recent ‘poaching’ of a significant portion of the robotics and autonomous vehicles experts at Carnegie Mellon University to accelerate the company’s push towards driverless vehicles as a means to boost profit.
As a shift to driverless vehicles (in the longer term) sits at the heart of Uber’s strategy, I felt all the talk of looking after drivers’ best interests rang a little hollow. The same discussion also included multiple references to the ‘sharing economy’ and this caused me to reflect upon what, if anything, this label still means. Are Airbnb, Uber, Zipcar, etc all exemplars of the sharing economy, or do we need to look a little deeper at our definitions?
The Oxford Dictionaries Online added the term sharing economy in February 2015 and defined it as ‘an economic system in which assets or services are shared between private individuals, either for free or for a fee, typically by means of the internet’. For me, the confusion starts right here as I would only consider the sharing of assets or services between private individuals for free as ‘sharing’. If there is a fee involved, I would favour terms such as ‘renting’, ‘hiring’ or simply ‘supplying’.
‘Collaborative consumption’ is another term that is often used interchangeably with the sharing economy but here the fit is good. Here, we see technology used to scale more traditional market and ‘community’ behaviours such as lending, donating, exchanging, etc. For example, Freecycle helps individuals to gift their unwanted items to others rather than sending them to landfill.
‘Collaborative economics’ is different however, and characterised by the use of decentralised marketplaces to match owners of underused assets with those that wish to use them – often disintermediating traditional stockists or service providers along the way. For example, I do not own a car but am happy to use a Zipcar on the occasions that I require one. What is important here is that the market owner will take a cut on each transaction and may, as in the case of Zipcar, own the assets involved.
A further blurring of lines comes with ‘on-demand’. It is here I would place companies such as Uber that operate a platform matching immediate customer needs to providers that are able to fulfil them. I do not see anything being shared here.
So what is the sharing economy? There is clearly some overlap between the business models of the many companies that claim to operate in this space. For me, the key distinction should be one of ethics and principles. When I hear the term sharing economy used, I see this as a signal that I need to look more deeply and understand the underlying business and value model.
If a company claims to be a part of the sharing economy it will need to clearly demonstrate its supply side is well treated and valued, that it operates transparently and with a desire to promote a collective good that is built up through a community, and that customers benefit through efficient access rather than ownership. This is, after all, what sharing means.