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How to deal with “sharing economies” in cities?

“Sharing economy”, the conjunction of these two words is becoming more widespread day by day in this era of booming cities. While widely adopted by consumers, new businesses and some policy makers, it is also generating controversy among trade unions and local governments. This article will focus in the definition of this concept, its impacts in cities ecosystems and in further steps to be taken by policy makers and businesses.

Definition of sharing economies

What do we mean when we are talking about sharing economies? There multiple definitions with broad meanings about this concept, a few examples of this:

  • The sharing economy is an economic model often defined as a peer-to-peer (P2P) based activity of acquiring, providing or sharing access to goods and services that are facilitated by a community based online platform.
  • An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet.

There could be different interpretations about these definitions and the key issue relies in establishing the threshold of when something is working within a “sharing economy” approach and when it turns into something else, more related to a conventional businesses approach.

Some examples…

We could mention Airbnb, Uber and Lyft as some of the most well known platforms, and also as the businesses who are taking most advantage from this concept. All of them are generating tensions and controversy in the cities where they operate. It is well known the distortion that Airbnb is causing in the housing market of many cities, by increasing prices and reducing availability of housing for long term rents. The same happens with Uber and its conflicts with taxi labor unions, as well as its competition with public transport. We should also start paying attention to issues related to labor rights, with rising apps like Glovo or Uber Eats, which are particularly successful in impoverished economies.

The broadness of the concept and the way it’s being used, advocates for less regulation and flexibility of labor rights, since the users are now “entrepreneurs”, when in the practice this does not necessarily work in this way. Also in the housing market, when someone has a house to exclusively rent it via Airbnb, at higher prices that you would gain by renting it with long-term contracts, are you really “sharing”? Or just using the concept of the platform for higher profit?

Cities first

Besides this, it’s worth to mention, that is undebatable the value that this technologies could provide to the efficiency and economies of our cities. But probably we are not using them in the best way. It is necessary to well defined this threshold and apply regulation according to it. Also, it is important to take into account, that every city is particular, with different needs, problems and economic drivers. This could lead us to another question, regulation should be applied according to the circumstances of each city or should be at a global/national/regional level?

There is full of space to reach agreements with this platform, as many cities in the world have already done in order to reduce tensions between actors. But for this to happen, shared economies businesses should relegate some of their actual incomes or make changes in their businesses models, in order to work together with local governments and move towards more prosperous cities.

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Hussein Dib

Passionate about social-environmental justice and improving lives of most vulnerable groups in society.

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