Month: May 2016

The Sharing Economy in Diverse Places

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In many places, people tend to overlook that doing business is a given right. To own a start-up, to be able to legally operate one, as well as find business partners without having to resort to underground or illicit methods in doing so are all taken for granted.

In most countries, sharing economy start-ups fall in between the grey area of semi-legal to being governed by unclear laws, regulations and jurisdictions.

In others, most, if not all businesses are banned or made illegal due to strict property laws (Cuba for example, where property cannot be sold) and sharing businesses as a result pop up to feed growing hospitality and tourism industries.

cp_cuba

The two main sectors affected by such developments in the legal landscape are also the biggest by far, ride-sharing and home-sharing or property-sharing. These are sometimes not strictly speaking, sharing economy start-ups, but they do fall under that category.

A point to note is that while the sharing economy has its roots in a non-profit driven model, to operate in a market driven economy and to deal with costs, start-ups have adapted their business model to generate some form of revenue to keep their costs covered.

As such, some have evolved completely from a non-profit driven model to a for profit sharing startup model. While revenue is needed to cover costs, profits should not be the be all and end all goal of sharing start-ups, and many would do well to remember that.

One country to look at where an organic model of the sharing economy has taken root for some years due to an eclectic mix of factors is Cuba. Yes, surprisingly, it’s Cuba.

Cuba has a slow but very steady growing tourism industry, with tourism bringing in hard cash in the form of US dollars and Euros. In Cuba, the monthly government salary is about 10 US dollars a month, with the local Cuban currency being worth a lot less on the international market.

Cuba_casa_particular

However, since buying and selling property is not permitted in Cuba, as well as development and refurbishment of existing hotels and other residential properties is quite difficult due to the embargo, enterprising Cubans have turned to renting out their houses and villas in a sharing economy style arrangement for profit.

One night at a Cuban villa, paid in US dollars, or the local equivalent can be a monthly salary and more for a Cuban homeowner. The way this is done is simple – the owners of the house get people who usually guide tourists around at the airport to recommend them their rooms, or villas, as well as distributing their business cards to any potential customers.

Casa particular (Spanish for “private house”) is a phrase meaning private accommodation or private homestays in Cuba. As a result of more government action, Cubans are now also allowed to rent out their rooms to tourists. 

Casa Particulars

The difference between an Airbnb apartment and a casa particular is simple – you rent a room online via Airbnb, you get the keys, the owner shows you the house, and then you stay there. It’s a transaction.

Casa particulars however, have their owners still living in them alongside you in an actual sharing arrangement. As such, you can ask them where to visit, or request breakfast or dinner cooked for you at a agreed rate. Perhaps, this is what sharing should have been?

This is not to suggest that the sharing economy should be limited, or that it should be kept small scale and not be able to scale up. But the fact still remains that the sharing economy at its core is meant to serve a very human need – to be able to distribute resources efficiently while putting people in touch with other people, not acting as a platform for just transactions, but also for the human connection.

Ride-sharing done different

A great example of another start-up going back to the sharing economy roots is based in Austin, Texas. Now, if you remember correctly – America is a hot battleground for the two largest ride-sharing app start-ups in the world, Uber and Lyft. However, both companies have been stopped dead in their tracks in Austin Texas, as the saying goes, because the town ain’t big enough for the both of them.

Austin, Texas is really large, it’s just that the city has rules limiting and regulating ridesharing companies. Now, this rule isn’t so much related to worker welfare, or pay at all, but rather was about identification and private data concerning drivers.

Due to this, both Uber and Lyft have stopped operating in the city till now.

Enter RideAustin, a not-for-profit app that follows the regulations as well as has a heart for the local poor and needy. RideAustin has the feature for riders to round up their fares to the next dollar, with the difference in the actual amount and rounded up amount being donated to a charity of the rider’s choice.

There’s also another interesting feature that deals with the revenue and finance side of things – Uber is famous for its surge pricing model, and it’s a model that people think of when they hear of the sharing economy. However, RideAustin has made it entirely optional. Riders who pay the surge pricing of course, get first pick of rides, but riders can also choose to wait it out in the virtual queue of people waiting for a ride.

So far – RideAustin starts all their operations in June, having already had the support of local companies who have prepaid for rides along with donations from private locals to fund this venture.

Perhaps, this time, David will beat Goliath again?

 

A Tale of Two Sharing Cities: Amsterdam and Taipei

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Amsterdam and Taipei are two very different cities. One is located in the liberal heart of Western Europe, while the other sits at the edge of the ocean, and is an Asian city with a very different culture.

Taipei is known for its modernity, it’s food and temperate climate, as well as its geography and unique culture which sets it apart from it’s larger neighbour China. Amsterdam known for its nightlife, its extensive canal system, historic architecture and “coffee-shops” as well as its vibrant culture and as a melting pot of ethnicities and people.

Amsterdam Sharing City

Sharing culture is growing steadily, and becoming an accepted and preferred way of life.

Both however, share a very common factor:

The sharing culture is growing steadily, and becoming an accepted and preferred way of life, and led not only by the government, but with business and civic partners leading the way as well.

Amsterdam

Taking a look at Amsterdam, it has been on the cusp of becoming the regions sharing city capital for some years, with sharing start-ups leading the way. Since February 2nd, Amsterdam has officially captured the title of Europe’s first sharing city. This has only been possible due to government participation and effort, as well as sharing start-ups in the city and other normal businesses as well.

This collaborative effort to tackle issues and opportunities faced and presented by becoming a sharing city was only possible with the efforts of all actors involved. The prize? A more socially connected city – as well as a more efficient and enterprising economic landscape for both start-ups, businesses and customers.

As Amsterdam has a local government (as compared to some countries with only federal or country-wide governments) , easing and changing rules and regulations to make the city more friendly to sharing start-ups as well as initiatives is easier. They have also been the world first in developing regulations for AirBnB rental transactions – a key concern amongst locals worldwide.

amsterdam-bikes

Bikes in Amsterdam

The sharing economy in Amsterdam is not only confined to home-sharing or ride-sharing, but also includes borrowing platforms, which connects people who need stuff to people who can lend it, much like the libraries of things we covered in a previous article.

It must be understood that while Amsterdam still has some headway to make, bigger businesses like banks and insurance companies in Amsterdam are also looking at how they can utilize the sharing community and the power of collaborative consumption to make the city a more connected, liveable space.

On the other side of the world, in Taiwan and the city of Taipei, the issue of liveability – traffic congestion as well as pollution is a major headache in many Asian metropolises. Regardless of wealth, the amount of cars on roads only increases pollution, and with the ever increasing costs of owning a car, city officials are hard pressed to look for alternative.

The solutions to these problems have been many, and some have worked, and some haven’t. Some countries have banned cars with starting even numbers on their licence plates on even numbered days, and conversely, for starting odd numbered cars on odd numbered days. Others, have imposed fines and heavy tolls for cars entering certain areas at certain times to lower traffic congestion, or raised the cost of a car to astronomically high prices for licences or taxes to limit the number of car owners.

All of these have met with some limited success, to one degree or another. But to take people away from cars doesn’t solve the main problem, that people need transportation that is affordable, yet available and if possible, environmentally friendly.

Taipei

Enter Taipei’s solution. Taiwanese have always ridden bikes, and they have a culture of bike riding, since their temperature and climate is moderate enough to allow for it.

The Taiwanese have taken it a step further, with the YouBike system, as it is called in English, and informally known as the Taipei bike sharing system.Youbike-Taipei11

The simplicity of the model combined with the availability and widespread use of the bikes are what makes this project an ongoing and longstanding success.

For NT$10, one time users can use the bikes as well as people who buy an EasyCard (a wireless payment card used for public transport). What’s more, EasyCard users get the first 30 minutes ride free to encourage the use of the bikes.

Of course, the EasyCard costs about NT$100 which is roughly USD$3 to purchase. As for non EasyCard holders, every 30 minutes of use costs roughly just USD$0.31! The popularity of the system is attested by the empty stands which hold these bikes – the locals use them so much that they are empty most of the time!

In addition to being affordable as well as being widely distributed, as they can be found outside underground train station exits, as well as busy interchanges and transit points, bikes are given leeway and a special path on most roads in the city as well.

The local government, of course, encourages the use of these bikes, as well as creating regulations to create a safe environment for people who use the bikes.

Again, public and civic cooperation along with business partnerships go a long way to furthering the sharing economy and culture across the globe. Without such cooperation, initiatives are less likely to succeed.

Sharing City Seoul

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Seoul – capital of South Korea, a gleaming metropolis set in Asia, a modern city, and now, with government initiatives, Asia’s first sharing city.

Let’s look at why Seoul has seen the need to become a sharing city.

Seoul declared itself as sharing city

seoul_sharing_cityTheir Sharing City Initiative defines itself by stating its overall vision as a “city that solves urban problems by facilitating people to share idle products, time, information and space”.

Why does Seoul need sharing though? The constraints of living in an urban metropolis has changed the living environments and landscape over the years, putting constraints on both natural and human resources, such as space, leading to the need to utilize resources as efficiently as possible.

To understand why Seoul needs sharing in the first place, let’s look at the history of Korea, Seoul, and the Korean people.

“Sharing is the way of life
for sustainable tomorrow”

South Korea is a very traditional country, and a very traditional Asian society that focuses on the family as a core societal unit, with elders and age being venerated and respected, and it is also a very patriarchal society as a whole.

South Korea came out of their war with North Korea devastated with few natural resources and an enemy at the border. After which, rapid industrialization and modernization followed by years of growth marked it as one of the four Asian tigers.

“The youth were particularly affected by the increased inequality”

In this rapid period of growth, the traditionally closeted and conservative chaebols (Korean: 재벌), or family businesses dominated the economy, and as years passed, higher costs of living, increased income inequality and slowed growth has led to an modern urban metropolis with a lack in community spirit.

The youth were particularly affected, as the lack of growth and job opportunities has affected their ability to live in bigger cities like Seoul.

The purpose of this sharing initiative then, is two-fold.

  1. To make cities more affordable and liveable for everyone,
  2. To foster a sense of community lost in an urban metropolis, to make a place to feel at home with friends.

It is not possible to keep bloating the public sector with more jobs to achieve this, nor is it possible in the capitalistic model to keep exploiting and utilizing already overstretched and shrinking finite resources such as space.

“The idea behind the sharing city is to utilize existing facilities, resources with new practices centred around trust”

However, this isn’t going to be free bonanza of sharing – it is a pragmatic approach to the constraints of the city. It is a pragmatic approach to a very real problem, of more tourists, having less places to stay, less people having places to stay, not enough parking lots, not enough books and crayons for needy children; the list goes on.

Over 60 Sharing Services are encouraged by the government in Seoul:

Seoul Sharing Services

source: http://english.sharehub.kr/services-infographics/

Tourists – the city is actively encouraging tourists to stay at local B&B’s or rent empty rooms within a house for their stay in Seoul.  As with the lack of apartments to stay in – the cost of living has a factor to play in this as well as trust. In a very economy driven city like Seoul, most times, apartments stand empty not because there are no landlords leasing the out, it is because prices are too high.

Businesses – the aim of the project is to allow organizations and entities also to participate in the project, with a motivational sum of a 9 million Won ($7,700* USD) project grant, as long as the organization or entity has its service activities in the city of Seoul.

The city also goes further by listing several areas and laws that need to be acted upon that prohibit or make the sharing economy harder to operate.

Transportation – Article 81 of Passenger Transport Service Act, eases the ban on the usage of private vehicles for commercial public transport! This is easy to understand, since the popularity of ride sharing services is well know, as is the alleviation of traffic congestion due to the lowered number of cars on the road.

Taxation – Article 50 of the Restriction of Special Local Taxation Act, to exempt taxes on religious organizations when they share facilities with the public. This is interesting, especially since it could promote social cohesion and dialogue between different generations and sub-cultures within Korean society.

Food Industry – Article 37 of the Food Sanitation Act  eases regulations when dealing with restaurants who share their space with the public.

As for the other areas, they call for new regulations in the areas of Insurance and Construction, with Insurance being vague, and construction calling for the use of sharing practices in the design of new buildings.

It remains to be seen if the Korean government at large will be able to implement these practices and actions quickly enough to cope with the changing urban landscape and societal attitudes. However, the proposals and measured outlined in their document bears hope for a better, more sharing, and caring Seoul.
*KRW to USD rate as of May 7, 2016