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The Sharing Economy: Innovation Vs. Regulation

“The sharing economy is not about technology it’s about people — about changing human behaviors,” says Martijn Arets, who calls himself a Collaborative Economy Analyst at Crowd Expedition, a 4-year project, begun in 2013, designed to determine the real added value of the Collaborative Economy. In the last few years, Arets has interviewed more than 400 entrepreneurs and experts in this field. “The questions today are more about social issues, not technology; about a labor market that doesn’t fit into the times. Changes are coming, but there’s not enough sense of urgency to adapt to an economy of sharing.”

Arets’ fascination with entrepreneurship and brands led to a five-month journey across Europe visiting 20 brands, a journey which resulted in a self-published book (crowdfunded to the tune of 20,000 Euros), Brand Expedition: A Journey Visiting Europe’s Most Inspiring Brands. He was named Entrepreneur of the Year in 2011 by the Dutch entrepreneurial magazine Sprout, and a year later, one of “40 Young European Leaders Under 40.” He spoke at a daylong event on the sharing economy in Amsterdam March 30 hosted by shareNL and Iamsterdam.

“Just because something is technically possible, doesn’t ensure rapid actualization,” Arets continued. “There’s a difference between the rational and the emotional. Online peer2peer platforms such as Uber, Airbnb and Kickstarter are the middlemen. It’s technology, lowering the threshold over which people connect, learn to trust, and share with each other. Platforms broaden the local experience first (i.e., Airbnb’s opening private homes to outsiders), then deepens — they become global platforms affecting local transactions.”

In Amsterdam Alone, You Can:

• Share a ride (and its cost) with up to three other passengers in an electric taxi through Abel

• Enjoy a meal prepared by a professional chef at his or her home through AirDnd (Air Drink ‘n Dine) – a platform that connects home chefs to dinner guests

• Rent a boat through the Barqo open platform that connects boat owners with would-be sailors for a trip down the city’s many canals — or for a cruise in the Mediterranean

• Have dinner at the “pay as you can” Geef Café, where you pay what you think the meal is worth

• Join the LENA fashion library to borrow the designer clothing you need when you need it at a fraction of the purchase price

At the core of all this activity is shareNL a social enterprise (note: NOT a not-for-profit) hub for developing the collaborative economy, according to one of its founders, Harmen van Sprang. He and co-founder Pieter van de Glind are working to create more eco-systems where everyone has access to all products and services.” This includes peer-to-peer and business-to-consumer — creating what they call a “collaborative economy ecosystem.”

For example, “At Amsterdam’s Schiphol Airport there is a company that can rent your parked car for you while you’re away on your holiday. We think we can have 100,000 sharing cars on the road soon in the Netherlands. There are 8-million now, so this is a challenge. But we think we can do it, and in the not too distant future,” he says.

Regulations Vs. Innovations

The key to smooth operations, says van Sprang, is getting the right balance between innovation and regulation – something Amsterdam’s city government has been working on for the past year, galvanized by a wellspring of complaints from citizens blaming Airbnb for overcrowding during the summer months.

The city estimates that 5% of all Amsterdam’s housing is listed on holiday rental sites — the biggest of these being Airbnb. An agreement signed in 2014 was just replaced this January by one with more stringent regulations and “policing” of infringements by Airbnb itself.

In Amsterdam today, owners may lease their properties for only 60 days/year to up to a maximum of four people at a time (with some wiggle-room for families with small children) or face being classified as an “illegal hotel” with fines of up to 20,000 Euros per offense, and the threat of imminent shut-down. Airbnb has agreed to police its own listings and to list the new rules on its webpage, with a link to the Amsterdam web page explaining the city’s codes — such as trash collecting, noise abatement, etc. Last year, the city closed down 300 so-called “illegal hotels,” proof that while tourism is a key growth driver, it is not more important than the rights of tax-paying citizens.

Additional info on sharing in Amsterdam may be found here.

Sharing also eventually raises the issue of insurance. “New startups always ask us about insurance,” van Sprang admits, “especially regarding car-sharing. We do have a Dutch company which is involved — Achmea, the largest Dutch insurer — but the bigger insurance companies need to take on the larger role.” AXA Insurance Board Chairman Denis Duverne said at the Women’s Forum in Deauville in December that AXA is also looking into providing insurance on demand” — for example for BlaBla Car ride shares.

It could be a costly start for insurers: one immediate issue is assessing the risk pool in a very new sharing-economy market. It looks like a risk worth taking. According to a 2013 survey on the potential of collaborative consumption, 84% of Amsterdam citizens surveyed recently said they were willing to share, even with people they didn’t know. And the sharing economy is growing fast.

What’s Next?

As to the future..? “No one heard of Airbnb ten years ago,” says shareNL co-founder Pieter van de Glind. “Today it’s one of the biggest hospitality companies in the world.” He is especially convinced that driverless cars are coming. Fast. “You see Uber buying OTTO, and in ten years we will have driverless vehicles on Uber,” he opines. “You see Artificial Intelligence and its broad promise to liberate people from repetitive labor,” he continues, “but this puts ALL routine work at risk. And what happens if or when computers begin to think?”

ShareNL is working on various projects to assess the future of work. In the meantime, co-existence is key to the existence of legacy companies and emerging sharing platforms. It’s not a zero-sum game, but the shift is coming. “The most successful companies today are platforms, “ van de Glind continues. “More people are taking rides across Europe in BlaBla Cars than in railroad cars. Supply and demand have become a function of matchmaking on platforms. Apple and Google know what you want before you do.”

But this is all about efficiency, about data collection and use. There is the human element to factor in, and it is up to governments to catch up and ensure the social side isn’t left far behind.

Editor’s Note: This Ariticle originally appeared on Forbes and is featured here with Author permission.

Shellie Karabellhttp://www.forbes.com/sites/shelliekarabell/#3e74236f9c62
Shellie Karabell has spent more than 40 years in international broadcast journalism, including executive news and management positions in her native USA, Europe, the USSR/Russia and the Middle East for ABC News/WTN, Dow Jones Broadcast, PBS, AP Broadcast and CNBC, responsible for news coverage, bureau management, and budgets of several million dollars. She has specialized in business news since 1982, covering hundreds of tier-one international companies and executives. As a TV correspondent in Europe, her coverage included the release of the American hostages from Iran in 1981; the Pan Am 103 crash in Lockerbie, Scotland,1988; the civil war in Lebanon in 1983; the civil war in Yugoslavia in 1991-92, and the collapse of the Berlin Wall. She is a recognized expert on Russia, having started her coverage there in 1986 (including interviewing Boris Yeltsin and Edvard Shevardnadze) and continuing to the present day, and living/working in Moscow from 1996-1998 for ABC-WTN. Before moving to Europe in 1983, she was a chief news editor and field reporter for ABC Radio Network News in New York, and the business anchor for Satellite News Channel. From 2009-2013 she was Director of Media Relations and Editor-in-Chief of INSEAD Knowledge, the business school's online business magazine. Born in Philadelphia, PA, she has a BA in English from Pennsylvania State University and masters work in political science (Penn State) & Russian History (NYU) and lives in Paris.

4 COMMENTS

  1. Once upon a time we would huddle around a fire and tell stories. We shared our day, we shared our legends, we share our community’s history.

    I think with all the tech, we’re coming back to the days when we were huddled around that fire. We have advanced so much that we established a better version of where we were at “square one”.

  2. Shellie, fascinating article. I’m loving the innovation going on in the sharing economy. Do you think the pace of change will always outrun the regulation or will things settle down a bit so the rules of interaction can catch up?

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