Sharing economy: challenges and opportunities of a non-traditional business model

Sharing economy: challenges and opportunities of a non-traditional business model

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According to Google it was in 2009 when someone typed for the first time the term “sharing economy. It goes without saying that things have changed in these 6 years, and now, knowingly or less, everyone is aware of this non-traditional business model.

A recent study published by the Cologne Institute for Economic Research, is a good scientific benchmark against which comparing the approach to “sharing economy” on both the shores of the Atlantic.

Designed in the US, a sharing economy model represents a paradigmatic shift from an “ownership based” economy to a “use based” economy. Aside from that, to underline the basic features upon which this model of business is not that easy; and the scientific literature still needs to fully address this sort of shortcoming. However, a broad definition, that is generally accepted is the following: “(a sharing economy model) includes all economic activities that focus on sharing goods, services or knowledge”.

Basicly the human being share goods and services with his peers since time immemorial. In the last decade, new IT technologies have boosted these practices to the skies. Let’s just think of online platforms able to match demand and supply instantaneously. Therefore, it is possible to say that technology was and still is the main driver of new sharing economy businesses. Day after day, they are easier, cheaper and more flexible. Car2Go, AirBnb, Bla Bla Car, and Uber, are just some of the most successful experiences of the last years.

The main focus of the study is however to put in the spotlight the interaction between these companies – which are all very different – and traditional business companies on national or European markets. On the one hand, because of their often “platform-based” nature, sharing economies companies find it easier to enter markets in comparison to traditional entrants; on the other hand, they need to work in a legislated environment which was not conceived for them. The consequence is a negative reaction, often an open conflict, with traditional companies who complain about unfair competition in markets that used to be uncontested for some time.

The conclusion of the study is that basically, pre-sharing economies regulation is inapplicable to sharing economies companies, especially P2P model – let’s just take the case of private accommodations: if a private should oblige to regulation in the matter of fire safety, pollution control or hygiene, almost no private accommodation would be suitable for rent.

Therefore, a different approach is needed. The legislator, according to the author of the study, should work following these policy directions:

  • level the playing field quickly for both traditional and non-traditional companies;
  • provide resources for competition in Europe
  • foster venture capital
  • foster the ease of starting business
  • promote entrepreneurship in school

At the the end of the day, and this is in my opinion the most important conclusion of the study, “sharing economy” is an opportunity for everyone; to some extent also for traditional business model actors. For example, when a “sharing economy company” enters a market, it also contribute in increasing the demand for that particular market – i.e. consumers interested in sustainable consumption, and so forth. If a traditional company understand that, new market segments are open for everyone to take it.

LabGov welcomes the beginning of this debate in Europe, and especially in Italy. We are in fact well aware that good ideas are worthless in unregulated environments, and we are also working to fill this gap.

 


 
Un recente studio pubblicato dall’Istituto di Ricerca Economica di Colonia, ha messo in evidenza le sfide che la diffusione di modelli basati sulla sharing economy stanno ponendo nei mercati tradizionali. Connotati da caratteristiche uniche – in particolare ll’idea dell’uso dei beni e non dalla proprietà – questi modelli vivono e prosperano grazie a nuove tecnologie in grado di mettere in contatto diretto domanda ed offerta di beni. L’altra faccia della medaglia è rappresentanta dal vulnus normativo che crea tensioni con le imprese tradizionali. L’Europa, ancora indietro rispetto gli Stati Uniti sotto questo punto di vista, deve aggiornare le proprie leggi e regolamenti per fare in modo che la “sharing economy” diventi un’opportunità di crescita per tutti, nel rispetto delle regole e della concorrenza.

Marco Quaglia