Entries in sharing economy (3)


When the sharing economy starts to take

The sharing economy has swept the world, disrupting a number of industries, particularly the hospitality industry. From the onset, there was a significant push from consumers for this new business model, which launched as a model for the little guy, and companies within disrupted industries continue to face pressure from this new era of individuals and groups making money from underused assets, as PwC describes it.

Tom Slee, a well-known critic of the sharing economy model, however, suggests in this Harvard Business Review article that sharing economy leader Airbnb is “facing an existential expansion problem.” A model that started out as one that allowed individuals to rent out living spaces for extra income and to spur local economic growth has reached a tipping point, becoming a mass vehicle for tourism. But it is also beginning to erode the atmosphere and livability of the same locations it attempts to build up, claims Slee.   

The number of Airbnb listings in Paris has skyrocketed in recent years, starting at just 20,000 two years ago and now up over 40,000, with Airbnb listings representing approximately 11.9% of hotel supply. In London and New York, Airbnb listings represent roughly 10% and 17% of hotel supply, respectively. In Lisbon, where toursim is on the rise, there is concern that this shift from residential to financial investments and short rentals is having a negative impact on the historical centers of the city.

The issue Slee has with Airbnb is that it positions itself as a service where individuals rent out their living spaces from all areas of a region (not just the downtown core or tourist hotspots) allowing economic opportunities for smaller areas where, prior to the sharing economy boom, this was a challenge. Through his independent review, however, Slee has determined that many Airbnb renters rent more than one residence, placing them in the commercial category. He also found that much of the rental uptake is taking place within central districts.

City officials and residents around the world are starting to pushback against Airbnb, which is where Slee derives his remark that the company is facing an existential expansion problem. What started out as a business model that supported new financial opportunities for local residents has reached a turning point, creating animosity among the basic foundation of Airbnb’s business model; that is, the local residents. 

We welcome your thoughts. Has the sharing economy reached a point where it’s no longer achieving what it set out to do?

-- Yassine el Ouarzazi


Innovation being driven by homegrown 'maker movement' in Africa

So-called makerspaces or hackerspaces are becoming the grassroots hubs for innovation in Africa, according to this recent article in Harvard Business Review by Ndubuisi Ekekwe, the Founder of African Institution of Technology. These open-minded individuals are combining knowledge of local issues with their own expertise and the ubiquity of computer-based tools to carve out their own markets.

Adweek explains that the Maker Movement consists of innovation ecosystems that take a bottom-up approach to the economy, enabling consumers to be engaged in designing and producing the products they'll ultimately buy.

Some examples of the Maker Movement in Africa include HacKIDemia, which empowers makers, typically youths, to solve local challenges and exchange best practices by awarding fellowships to mentors who engage with other makers in their communities. M-PESA, a Kenyan-based online payment system, and BitFinance, an ATM machine enabled for cash, digital money and Bitcoin, are two other examples of made-in-Africa solutions. Beyond the tech space, there is even a Nigerian group that is refining crude oil on a small scale.

Ndubuisi Ekekwe says:

These makers offer a platform for a new economic system that taps into the brainpower of Africans to seed shared prosperity.

With many issues facing the continent - clean water, energy, health care and food processing - these Makers are aiming to create solutions that address these challenges. There is also an opportunity to form partnerships with these makerspaces in an effort to garner insights into new products and offer methods to better reach new customers.


Capitalism, equality and questions about the sharing economy

In the opinion of OuiShare connector Arthur De Grave, the "sharing economy" is not really about sharing, altruism, or a moral revolution. Rather, it's one element of the "collaborative economy (which includes the distributed production, peer-to-peer finance, and open source movements), and it raises a number of interesting questions.

De Grave seems primarily concerned with the question of whether the sharing economy is part of the next evolution of capitalism.  Within that framework, he also explores two areas of emerging discontent with the sharing economy:

  • Is the sharing economy addressing inequality in ownership structures? And,
  • Will it destroy jobs (and the privileges and programs workers have fought hard to win over the decades)?

In a wide ranging essay that makes references figures from Thomas Hobbes to Eric Schmidt, De Grave covers a great deal of ground. While ultimately stopping short of making a prediction or conclusion, the piece does create a potential framework for a more thorough exploration of these important questions.

Image source: Forbes

-- Jia Yan Toh