The World Economic Forum’s Future of Urban Development and Services Initiative has released its new whitepaper on «Collaboration in Cities: From Sharing to ‘Sharing Economy’».
The concept of Sharing Economy during the last years has become quite mainstream, even if the phenomenon represents one of the major disruptive innovations of the last century. Sharing is not something new of course, as it is an old concept as old as human civilization, to quote Gregory Hodkinson (Chairman, Arup Ltd and Chair of the World Economic Forum System Future of Urban Development and Services Initiative). But in the last years, thanks to the Internet and to the ICTs, new trends and mindsets about sharing have emerged. The proliferation of peer-to-peer social networks, together with global recession, an increased environmental awareness and the desire to rebuild social bonds and communities, have brought to the development and spread of the Sharing Economy. The WEF whitepaper underlines that the popularity of the phrase “sharing economy” has increased sixteenfold since 2013 according to Google Trends. Nevertheless, since there is not a common and unique definition, the term is often confused with overlapping terminologies such as “collaborative economy”, “on-demand economy”, “gig economy”, “freelance economy”, “peer economy”, “access economy”, “crowd economy”, “digital economy” and “platform economy” (see the distinction proposed by April Rinne on the WEF blog).
The spread of the phenomenon is having impacts on our way to consume, produce, distribute, work and travel, ultimately transforming our lives, boosting social cohesion and offering chances to reduce the environmental footprint.
As noted by Cheryl Martin, Head of Industries, World Economic Forum “while sharing may often decrease the cost of access, it also has the potential to address long-term societal challenges such as making cities more inclusive and building social connections between groups that might otherwise never have interacted. In experimenting with sharing practices, however, cities will also have to be agile in addressing externalities and disruption to their planning processes, policy formulation and regulatory structures”.
Gregory Hodkinson takes the same view: “The sharing economy is making cities redefine land-use strategies, minimize their costs, optimize public assets and collaborate with other actors (for-profits, non-profits, social enterprises, communities and other cities) in developing policies and frameworks that encourage continued innovation in this area”.
The WEF with its whitepaper is indeed exploring potential opportunities and challenges of the sharing economy in cities offering examples and solutions from cities around the world. It makes the case that sharing in cities can have a transformative impact – boosting the economy and nurturing a sense of community by bringing people into contact with one another, facilitating neighborliness, and improving the environment by making the most efficient use of resources. Cities have a potential role in facilitating/enabling and harnessing the sharing business models by fostering partnerships that shape a “sharing and collaborative” culture across all industry sectors.
The whitepaper is structured on answering 7 main questions:
1. What does Sharing Economy mean for cities?
“The collaborative dynamics of the sharing economy have creative implications for cities. Sharing can create a sense of community among strangers, which helps to facilitate trust and social inclusion. From an environmental perspective, sharing can reduce overall use of resources through practices such as carpooling and co-working facilities. Sharing can also supplement supply in periods of peak demand […] rather than turning to additional construction”. The sharing economy platforms are growing in number and size all over the world and more and more people affirm to use their services. In some cities sharing practices are specifically used to increase inclusiveness (in US good example are Los Angeles and Minneapolis).
2. Who are the actors of the Sharing Economy?
The whitepaper identifies 6 categories: 1. Individual users (those who use P2P or B2P platforms for economic, social or environmental reasons); 2. For-Profit enterprises (profit-seekers who engage in buying, selling, lending, renting or trading with the aid of digital technologies – platforms, to lower transaction costs); 3. Social Enterprises/cooperatives (primarily motivated by social or ecological reasons); 4. Local Communities (Actors at the local or neighborhood level / non-profit and informal models; transactions are mainly non-monetized, inter-personal connection is emphasized); 5. Non-profit Enterprises (non-business actors with the primary motivation of advancing a mission or purpose); 6. Public Sector/Government (using public infrastructure to support or forge partnerships with other actors to promote innovative forms of sharing).
3. What are the drivers of sharing?
“The economic, social and environmental drivers of participating in the sharing economy vary across sociodemographic groups and between users and providers”, for this reason, as reported in the whitepaper many cities have now offices and strategies for promoting sharing.
4. What is being shared in cities?
Individuals and collectives (social enterprises, cooperatives, for-profit and communities) can share a wide range of things, related to nine major groups: 1. Mobility and transportation; 2. Spaces; 3. Skills and talent; 4. Financing; 5. Health; 6. Utilities; 7. General Goods; 8. Food and 9. Learning.
The whitepaper emphasizes what can be shared by the city government since cities “can leverage the potential of the sharing economy in municipal goods, municipal spaces, civic assets, municipal services and skills and talent of city resident such as:
- Municipal goods: City-owned equipment, machinery, vehicles and other goods can be shared among departments or with neighboring municipalities;
- Municipal Spaces and Civic Assets: these include civic amenities or spaces such as gardens, subways, city run schools, hospitals and libraries, and city recreational centers. Idle capacity in municipal spaces can be used for urban farming, pop-up shops, parking and start-up hubs, supporting local business and culture. For example, Seoul operates a website to reserve sports facilities, lecture halls and meeting rooms for educational and cultural events;
- Municipal Services: municipal governments in many areas have collaborative agreements to facilitate providing services to the citizens they serve, and have been working together in this way since long before the sharing economy”
5. How can cities share?
Sometimes cities directly facilitate sharing practices, in other cases, this role is covered by non-governmental entities (private sector, local communities, non-profit and social enterprises). The report identifies a two-step process:
- Focus on the purpose of a sharing city: economic, socio-cultural development or environmental sustainability;
- Focus on government role(s) in a sharing city: government can act as a regulator; facilitator/enabler; integrator/implementer; collaborator.
6. What are the issues and challenges in the sharing economy?
Recalling the work of Agyeman and McLaren, the white paper remembers that sharing economy practices can increase multicultural interactions through 1. Revolution; 2. Subversion; 3. Reinvention. According to the two authors, the best opportunities for a systemic change come from combining reinvention and subversion to “seek interlinked opportunities to enhance well-being, increase justice and equity and spread participative democracy”.
The report identifies 6 main challenges divided into two groups:
- Challenges in market-driven sharing:
- Establishing trust and reputation
- Ensuring safety and security
- Uncertain effects of social equality
- More exclusive than inclusive
- Challenges in purpose-driven sharing (for social and/or environmental reasons):
- Guiding sharing towards improving public infrastructure and services
- Accountability and transparency in collective/collaborative governance
For each challenge, the whitepaper reports cities examples.
7. How should sharing be regulated?
“Governments first have to understand the intricacies of the specific operating model and its implications – whether economic (taxes, monopolies), legal (redefining labour laws that cater to freelancers) or social (protecting the rights of participants). Cities have to work to involve all necessary levels of government: Seoul illustrates the challenge, as the city government is promoting sharing initiatives within its own scope but higher-level laws and administrative regulations have not caught up”. The whitepaper identifies some key points:
- Striking a balance: governments should encourage innovation and competition and protect the interest of citizens at the same time; adopting a bottom-up approach or a top-down one.
- Playing fair (legal): cities have to ensure healthy competition among traditional and new business models, identifying where to apply a different regulatory treatment.
- Defining applicable taxes and fees (legal) avoiding unclear or unfair taxation structures; cities should define a regulatory framework that incorporates the views and concerns of all stakeholders (the sharing platforms, traditional market players and participants across different sectors).
- Self-regulation (legal) that can decrease the pressure on regulatory bodies and allow the government to observe trends before taking corrective steps.
- Protecting data (social): sharing platforms collect, store, analyze a lot of valuable data of their participants (including transactional and non-transactional data) that should be protected; they are also useful for city government in the urban city planning
“The challenge of regulating sharing-economy platforms is complex. Governments have to avoid deterring innovation while trying to achieve economic, social or environmental goals. It is, therefore, important for them to have flexibility in their regulatory approach”.
As Hazem Galal, PwC Global Cities and Government Leader, said: “Regulatory and tax structures need to be revisited to address these concerns as sharing platforms begin to scale across different sectors of the economy. At the same time, developing a culture of sharing within cities to improve services with accountability and transparency would go a long way in shaping the ‘sharing cities’ of the future.”
Very interesting and useful is the presence in the whitepaper of many different examples coming from cities all over the world.
- Melbourne has become a global leader in the food-sharing sector (144 technology-mediated food-sharing initiatives). The city has a strong start-up and sharing-economy culture driven by entrepreneurial knowledge workers in co-working environments. Increasingly, this is becoming the cornerstone of the central city economy and its real-estate market. There are many enterprises that contribute to the local economy and social causes with their platforms scaling to different parts of the world (see 300 Acres, a community-sharing initiative that facilitates community access to unused city sites, enabling neighbours to establish communal gardens) and the City of Melbourne Open Data platform is a public-sector platform that releases municipal data to encourage innovation by businesses, researchers, students, programmers and data scientists.
- Seattle has six “libraries of things” in lower- and mixed-income areas, where citizens can borrow tools. None is run directly by the government, but most have received support through grants or in-kind services to get started. The city, in addition, will invest the taxes it collects from the short-term rental market in community-led projects and paying off bonds for affordable housing.
- New York, with the organization 596 Acres, supports residents to reclaim and manage public land for communities. New York, together with Seoul, Amsterdam, Copenhagen, and Toronto joint the Sharing Cities Alliance. The Alliance aims to enable cities and their citizens to shape their own future through city-to-city collaboration and its main goal is to enable city leaders continue to address the sharing economy.
- Barcelona is driving a time-bank project where people exchange their time for doing everyday tasks (currently there are 28 time banks listed on its website). The city is also discussing the idea of the “urban commons” implementing the “Reglamento do Participacion Ciudadana”
- London has a crowdfunding platform where citizens can propose project ideas and get City Hall’s support.
- Seoul has started in 2012 the “Sharing City, Seoul” project, organizing a sharing promotion committee, a Sharing economy Advisory Board, a Sharing Facilitation Committee and institutionalizing sharing economy practices through an innovation office (Seoul Innovation Division); now it has 97 distinct sharing schemes, from public bicycles to parking spaces to children’s clothes, and it operates a website (http://yeyak.seoul.go.kr/main.web) to shared municipal spaces and civic assets. Seoul is also collaborating with other cities to provide sharing services. In November 2016, the city government and seven other local governments adopted a joint declaration on policy cooperation for the sharing city, including developing and promoting joint programmes for sharing enterprises and groups, exchanging policies, improving the legal system and strengthening cooperation with domestic and overseas cities.
- Kamaishi City in Japan is partnering with sharing platforms to prepare for hosting the 2019 Rugby World Cup.
- Kigali motorbike taxi app SafeMotos uses smartphone data to distinguish safe from unsafe drivers.
- Amsterdam opened the reflection about sharing economy thanks to the private social enterprise ShareNL that was instrumental in launching the “Amsterdam Sharing City” initiative in early 2015. Today the city is reasoning on the “urban commons” thanks to the FabCity distributed manufacturing initiative. It is also connecting senior citizens and low-income households to sharing platforms via CityPass.
- São Paulo has implemented road-use fees to encourage transport network companies (TNCs) to complement public transit, limiting excess supply during peak hour congestion and augmenting supply when less served.
- Bologna has passed a resolution on collaboration between citizens and the city for the care and regeneration of urban commons and developed a “collaborative city” programme (collaboration pacts); it has paved the way for the so-called “Co-City Protocol” that explores forms of shared, collaborative and polycentric urban governance thanks to the extensive work of the co-founders of LabGov, Christian Iaone and Sheila Foster.
The whitepaper, thanks to many contributors (among which also Sheila Foster), aims to improve understanding of the sharing economy’s potential by clarifying terminology; exploring examples of what kinds of goods and services can be shared, who participates in sharing platforms and why; and discussing the challenges created by the sharing economy and how authorities can respond. It takes stocks on the role of cities in integrating/implementing solutions for sharing of (or collaborating on) public assets and services and/or collaborating with other cities, enterprises (for-profit or not-for-profit) and other stakeholders to make the most of a city’s assets.
It can be considered a first important step in systematizing all the experiences arising in the world about sharing economy and city government, from which go even further.
Il World Economic Forum – su mandato del Future of Urban Development and Services Initiative – ha recentemente pubblicato il suo ultimo Libro Bianco: «Collaboration in Cities: From Sharing to ‘Sharing Economy’». Un documento nel quale sono messe in evidenza le potenziali opportunità ma anche le sfide e le difficoltà che la sharing economy veicola nelle e per le città; nonché una serie di approcci adottati da varie città nel mondo e possibili soluzioni.