OPINION: Accepting the expanding sharing economy

sharing-economy-london-instituteSo much of the news we read these days is peppered with the words Uber, AutoShare, Lyft, or Airbnb.

At some point in the last five years, the word “Uber” or “Airbnb” transitioned from a catchy company name to a household verb, and the “sharing economy” became a game changer.

With the swiftness of their rise in cities such as London, policymakers are scrambling to find out how to best approach these sharing companies that fall into this new economic model.

You may still be confused as to what the sharing economy means.

Simply put, the sharing economy enables individuals to obtain rides, accommodations, and a wide range of other goods and services via online peer-to-peer platforms in exchange for monetary and non-monetary benefits.

Individuals can now trade goods and services more easily than they have in the past, with quality assessed based on the feedback and reviews of other users.

Economically, it is possible for young and old alike to supplement their incomes by selling their specialized services and goods to niche markets, as well as for individuals working on more stable, corporate settings to become “micro-entrepreneurs” when time permits.

According to many studies, sharing companies bring significant economic, environmental, and community benefits, including better use of existing resources.

In 2013, Forbes estimated that the revenue flowing through the sharing economy directly into peoples’ wallets surpassed $3.5 billion.

Nowadays, the common theme within this new economy is that cities are the catalysts to making it work.
With an unexpected surge in sharing companies, there has been what is commonly referred to as ‘disruptions’ of existing systems and by-laws.

Traditional industries (i.e. hotels and taxis) are being hit significantly with the growth of innovative sharing economy models that do not neatly fit into existing local regulatory environments.
More Londoners want on-demand services and crave these collaborative opportunities.
Many city leaders have so far been antagonistic with embracing change and innovation while simultaneously prioritizing safety and market fairness.

Most mixed and negative sentiment for the sharing economy is based on concerns over public safety for consumers and providers, fair business practices where there is a level playing field, or lost tax revenue in the case of hotels.

As our city leaders grapple with this, they find there is no best practice or one-size-fits-all solution. But they must also recognize that this challenge poses an opportunity to experiment, to find a unique, context-sensitive resolution that works for our community.

This is only the beginning of the sharing economy, and we will undoubtedly continue to see more new companies, more disruptions, and more social and political interplay between existing and new actors.

Governments in the past and present have always been reactive and short-sighted. It’s time for our local government — both city council and city administration — to start taking proactive measures to regulate these peer-to-peer companies and provide a regulatory framework for the sharing economy as a whole.

The best thing that policymakers can do is to keep an open mind and embrace the sharing economy as one that is rewarding and beneficial with the right regulatory framework in place.

Technology, being a form of social relationship, always evolves just like a living organism. No technology remains fixed. Just like the transformation of the automobile industry with respect to horse carriages, we will see disruptions happening across all industries now and in the future. We simply cannot stop this phenomenon.
That is why sharing is here to stay.

Amir Farahi
Amir Farahi
Amir Farahi is the Co-Founder & Executive Director of the London Institute. He is an entrepreneur, columnist, public speaker, and is currently specializing in Economics and Political Science at Western University.
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