I’ve just returned from a conference on coworking, which gave me reason to revisit the relevance of the ‘sharing economy’ and ‘shareable cities’. While we’re seeing a huge upsurge in sharing of spaces, vehicles and everything else through clever use of technology, not all of it is positive. It’s timely for Geraldton to consider the question: “If we are going to benefit from more sharing, how do we ensure the outcomes are positive for our local community and economy?” While no-one may know the answer to that question yet, but we need to be asking it or risk being surprised by the downsides of sharing in our city.
So, what is the Sharing Economy? The ethos of sharing and collaborative consumption is well-articulated on Shareable’s website, in Wikipedia and by the people behind Global Sharing Week, who write:
“The Sharing Economy is a socio-economic ecosystem built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organisations.”
This definition is implicitly in contrast to an economy where production, distribution, trade and consumption are controlled by a very small number of people or corporations e.g. This American article highlighting 10 mega-corporations.
For people in Geraldton, their most likely experience of the Sharing Economy probably comes when traveling to cities populous enough to have enough supply and demand. For example:
- Finding a place to work for an hour or day in a coworking space (like our own CityHive),
- Booking accommodation in a house instead of a hotel through AirBnB,
- Ride-sharing, using a shared bike or calling an Uber instead of a taxi.
But sharing is not limited to just those examples and can extend to toys, books, land, farming, tools and almost anything you can think of. In fact Geraldton’s award-winning participatory budgeting is born of the same ethos and are an example of sharing ‘budgeting’ or ‘power’.
Personally, I’ve been a user of many sharing services, and initiated ride-sharing services and coworking in Geraldton. Generally I’ve loved both the actual experience of housing, working alongside or sharing a ride with strangers in my own and far-away cities, and of seeing under-utilised assets being used more efficiently. Philosophically it’s very aligned with my values and I can see potential for individuals and our community benefiting from leading the wya and becoming a Shareable City.
There are many possible upsides to becoming a city that embraces sharing, including:
- Increasing scope to host large events e.g. City of Albany allowed more ‘AirBnBs’ to cope with visitors for the ANZAC anniversary
- Better use of community or commercial assets e.g. shared use of buildings, buses, bikes, data projectors etc.
- Making toys, books, bikes, cars or transport more accessible to those who can’t afford to own them,
- Seeing more local projects succeed through local crowdfunding or cooperative approaches to resourcing,
- Improving on-demand services e.g. Geraldton’s taxi service is pretty awful and I reckon Uber would have no trouble recruiting here.
Leading the way in creating conducive policies and reaping the benefits is Seoul in South Korea, with an impressive array of approved services under the heading “Sharing is the way of life for sustainable tomorrow.”
And, there are downsides and risks. For individuals there is the risk that the stranger could break, steal or harm you or your belongings, however my experience and the statistics suggests this is a very low risk. For our community there is the risk that our well-meaning and convenient local sharing is actually mostly for the benefit of international corporates who: don’t pay tax, exploit those most vulnerable and flout local laws.
The subtle distinctions between the more corporate versions of sharing and its collaborative, community origins are well-articulated in this article by Nathan Schneider. Nathan highlights the distinctions and shifts between business models designed to make the world a better place, and those that end up serving Venture Capitalists interests (via tax havens like Ireland) and exploiting slow or inadequate responses of government to ensure they pay GST, corporate tax, or even their drivers fairly.
For example: AirBnB has a valuation of $10 billion based on a business model that makes an average of 10% from each booking (3% for hosts, 6-12% from guests) and books Australian sales through an Irish subsidiary while paying no GST; and, Uber is valued at $41 billion based on a model that takes 20% from every ride straight to Ireland, but a recent ruling will ensure it at least pays GST. While it’s not like 100% of profits and taxes from Holiday Inn or other chains of hotels or taxis in Geraldton will be retained locally, it’s useful to understand who really benefits when you use one of these services to participate in the sharing economy.
At the coworking conference I saw the emerging role of corporate interests first hand: a significant portion of the conference attendees were from the real estate industry, and some declaring coworking as the single biggest challenge and opportunity to commercial real estate models. I chatted with the developers from international corporates who have the capital and motivation to swoop in, replicate and scale coworking for more profit. They were there alongside us learning what they could about replicating and increasing the profitability of the business models created by idealistic social entrepreneurs.
As an example, Regus is aiming to have 500 coworking spaces in Australia in the next few years (that’s 3 times the estimated current total of all coworking spaces), and will be focused on a value proposition for corporate clients who see benefits in their employees coworking: reduce demand for expensive CBD office space, reduced commute times if they work in suburban ‘smart work/coworking hubs’ and flexibility to work from any location around the country. While this positioning is slightly different from collaborative member-owned spaces and the intention very different from “enabling healthy resilient communities”, there may be a relatively small percentage of people who notice, appreciate and insist on the difference that makes a difference to the outcomes for our local economy.
Ultimately it will be you and me, and our local politicians and bureaucrats who try to understand and deal with the new sharing economy and try to create conditions for sharing in our cities to be a beneficial transformation. Luckily, in the spirit of sharing, Collaborative Consumption have created a guide of steps towards creating a Shareable City that works in all of our best interests. Combined with resources locally and internationally (like the Shareable Cities Toolkit) there’s more than enough for us to start the conversation and share the aspiration and start reaping the benefits of being a more Shareable City.
