One of the buzz words and major economical trends that has been widely discussed in the previous year, is the sharing economy. The companies that are now considered icons of the sharing economy, were all founded in the second half of the former decade. BlablaCar was founded in 2006 and Airbnb began in 2008. The sector is flourishing, with many projects being launched all the time. The sharing economy is “growing up” which originates the need to study this economical trend so as to clarify what is working and not working with the sharing economy. New questions get raised that ponder whether there is atruly idealistic spirit in the sharing economy , and if the population in general is ready and interested in trusting others enough to share their assets. What are we talking then , when we talk about the sharing economy ?
Different sharing economies ?
First it is important to realised that sharing is not one consistent activity, operated in the same way by all. Or at least, so argues Daniel Ben-Horin (2014) writing for the Stanford Social Innovation Review. Ben-Horin believes that one of the problems with the sharing economy is that:
“It is at its core, materialistic, with roots in economic shifts and forces.”
This, he argues, is demonstrated by the AirBnb squatter in California that stopped paying for accommodation after 30 days and then started demanding rights as a tenant. As explained by Ben-Horin, there is really no sharing with AirBnb. The owner bought a rental and used a website to market it. That can hardly be described as “sharing” if you go back to the traditional meaning of the word. Yet AirBnb is very much considered to be a part of the so-called “sharing economy”.
A more idealistic sharing economy
And yet there is another side to the sharing economy, according to Ben-Horin. This sharing economy is much more idealistic. It seeks meaning and interpersonal connection. Ben-Horin argues that few can afford to do this. These are people that believe if you share with others then they will respond back. This is a much more open perspective. Of course it may also be seen as more risky in some ways (though not when you consider the squatter of course as this turned out to be a giant, unforeseen risk). It becomes more complex than there simply being two ideas of a shared economy however, according to Ben-Horin, since as he puts it, people are very rarely simply one way or the other. People have different motivations at different times.
There is a sharing website called Krrb that Ben-Horin uses. It is used to provide people with the capability to sell collectables to one another, with the idea in mind that it is just like setting up a stand on a kerb and having passers-by purchase stuff. However there are warnings to make sure that the activity is safe, because as Ben-Horin puts it, “Nobody likes a stranger”. This of course is a ridiculous idea in a sharing economy, since sharing is naturally done between strangers.
Of course there are horror stories that have driven these warnings. A pretty good one is the AirBnb story described at the outset. The problem is not usually the website that the interaction is done through, as Ben-Horin points out. Rather, it usually occurs when people do not behave in the way that they are supposed to – such as smashing up your home, or lying about what they are selling. This creates problems for the sharing economy as it leads to people being less trusting in human interactions.
Ben-Horin is a believer that things do not have to be like that. And he’s something of an expert since he began in the sharing economy in the mid-1980s. He has used home exchanges and AirBnb a lot, and his organisation has also worked to share with others, in a large network of 55 other organisations. However, Ben-Horin does have some recommendations for driving a positive sharing experience. This leads to a more positive engagement between people within the sharing economy, in his view. The first recommendation is to “offer clarity and transparency”. When you do this you make your intentions and hopes very clear so that there is no room for misunderstanding. At the same time Ben-Horin believes you can demand clarity and transparency in return, making sure your expectations are understood. This way the person that is getting should have a clear idea of what they are getting, and the person giving is clear on what they expect as a result. Reading reviews is also recommended in this regard, as if a person or organisation has a bad review that is something to take into account. By the same token, getting reviews is recommended so that people understand what you have or what you offer and that you are a decent individual who is not going to squat in their home. Ben-Horin recommends avoiding bad reviews, and giving customers who were happy a reminder to provide a good review.
While Ben-Horin’s article focuses on the consumer perspective, he believes there are also tremendous opportunities for the social sector to benefit from the values side of the sharing economy. That is because as he explains:
“The synergies between the idealistic portion of the sharing economy and the goals and activities of the sector seem evident.”
This has already been seen happening to some degree, with organisations like Kiva, as he explains. But he believes more is achievable. We can hope he is right.
Paula Newton is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Paula’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Paula has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Paula has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.