Share Economy is a model of a two sided market, where there are two user groups that provide each other with benefits. Nowadays, it is mostly seen in form of online platforms, but the idea is as old as humanity itself. When you take a step back, actually every economic system that we have is eventually based on the sharing of something. So what makes this ‘Share Economy’ something so special?
After attending the event on April 5 at the Impact Hub Munich I got some interesting insights from people active in the field. In principle I can see, that sharing is a good thing. It provides many people with access to goods that they otherwise couldn’t afford or that would lay around unused. As Michael from Brot am Haken e.V. puts it, it is about giving joy, not necessarily about indigence. The project asks people to pay one bread (or many other products) more whenever you feel like it and put the bill on a so called ‘Hakenbrett’ (hook board) provide in the shop. Someone who “is in need”, can later take the receipt from the hook and get the bread from the baker. This “someone in need” can be anybody, Michael said. It can be the schoolkid without a lunch sandwich, the homeless or the manager who doesn’t have cash now, but buys a second receipt later. Brot am Haken places trust in the platform and the people who use it.
This notion of trust seems to be very central to Share Economy. “Meanly our work is built on a trust principle”, said Daniel from Green City e.V., “and we haven’t had any damages so far (knock on wood). People are happy.” Green City e.V. is a local environmental NGO, that organizes many things, amongst which are some sharing projects. For example, the community gardening, their shared cargo bike or the ‘Kleidertauschparty’ (Cloths swop party). Daniel believes that sharing projects are working well on local scale and with a simple concept.
That sounds plausible to me, but aren’t there also projects that run very successfully on a big scale? Yes, there are, as Günes form Mamikreisel (belonging to Kleiderkreisel) showed us. She is a real share economy entrepreneur who basically lives her life within these principles. Günes recognized that there is a dilemma between driven for profit and having a ‘sharing core’. There are two sides to Share Economy: one that is mostly non-profit, seeing sharing as doing good and changing lives; and the second part that sees it as using assets of people while providing “only” the platform for the exchange. The latter has the potential to be for-profit. Within that Günes’ experienced a dilemma, because it seems to be hard for users to understand why they should pay for the service. “Why is it so bad that share economy could make profit?”, Günes asked. It is a service after all, isn’t it? The people who provide it have to live of something. Does it make the intention any worse, when you try to make a living out of it?
The people form Useley would say no. They charged little fees right from the start and it seems to be working so far. Useley is one of these latter parts of Share Economy. It is a platform that uses assets from people and provides the opportunity to share and borrow it. ‘You are not gonna get happier by consuming more’ is kind of their credo. They stand for less stuff, but more experience. Stuff like a drill, that statistically speaking is used only 1,5 minutes per year, doesn’t have to be owned by everyone. I can lend yours, which saves me money and the earth resources. A GoPro makes cool videos, that make me remember my travels, but only when I can afford to buy it. If I lend it, I don’t need that kind of money and use the item anyway. I don’t need to own everything, when I know where to get it from.
Sounds great, doesn’t it? Anything for anyone at any time and even without producing waste. That make me sleep well.
But there are also negative sides of sharing. As my mum used to say, it is the dose that makes the poison. As Daniel from iShare, a professor at the University of Augsburg, put it: there is a trade-off between the existing system, that grew over a long time and the impact of the sharing. He is researching in the area of two sided markets and Share economy actors. He gave the example of Uber, that is a great idea at the first glance, because you can share your car, make a bit of money on the side etc. But there are huge consequences for traditional taxi companies, that can’t compete with the low Uber prices, since Uber has less costs for social security contributions etc. When thinking a little but further down the road, the new hip sharing concept could seriously damage long grown labor laws, social security systems, state tax incomes etc. Another example is AirBnB, that introduced the great idea of renting out unused rooms, which enable cheaper traveling and some money on the side. But the consequences on the housing market are already visible, that free rooms aren’t put on the market because it is more lucrative to have them on AirBnB.
Interesting thoughts, I say. So, is Share Economy bad after all? Daniel form the University of Augsburg says no. He is not in favor of the ban of Uber in Germany, but he wants to keep societal values in place. Sharing activities have a right to exist, but there should be some limits and framework conditions to it. Within his research, he is working on guidelines for this in the future. I am excited to hear about it in some years!
After the evening I feel very inspired and my head is spinning a little bit. What did I learn about Sharing Economy? It is a dynamic system that works only with mutual trust and I have the irrational feeling of letting go of control. It is a mindset that sounds really appealing but that you need to get used to. I will try..