They suggested regulators should strengthen guidance and policy support, to encourage the sharing economy to enter areas of need — including education, old-age care and medical treatment — while eliminating restrictive policies in administrative approval and business registration that could be slowing development.
Examples of businesses operating in New Zealand considered to be part of the sharing economy include Airbnb, Uber, Lime, Onzo, TradeMe and Bookabach. Globally there are more than 10,000 platforms that have changed the way individuals travel, eat and work. Many mean big business — Airbnb have more rooms available through its platform than all hotels in the world combined.
Positive & negative impacts
Essentially, the sharing economy means direct trade between two users saving the use of an intermediary, and as a result often saving the consumer both time and money, as well as making simple transitions more convenient.
Almost all sharing economy platforms are digital and many of them allow for open peer-to-peer communication and reviews, allowing potential users to have a clear idea of the product or service prior to committing to purchase. Reviews and ratings allow for honest and open usage by both providers and consumers.
Some of the larger sharing platforms have used their influence to assist those with a greater need — for example, Airbnb has helped coordinate accommodation for those in need following natural disasters.
Despite the benefits the sharing economy provides, it also raises concerns around privacy, with many of the platforms having access to individual's personal data. There are also safety concerns around ride-sharing as well as item and home/space rental.
Ridesharing app Didi Chuxing came under intense criticism by its customers and the government after two female passengers were murdered in separate incidents within four months. As a result, the company made audio recording during rides compulsory.
Though these recordings were introduced to increase safety, they have given Chinese customers cause to worry about the widespread surveillance and sharing of data. China plans to roll out a "social credit system" by 2020, which will standardise the assessment of citizens and businesses behaviour and "trustworthiness".
The amount of data that users willingly — or unknowingly — give up on sharing economy platforms could help feed into this reputation system.
The sharing economy has also had both a large and sudden impact on more traditional industries, including accommodation, tourism, healthcare and consumer goods; but perhaps most publicly, the taxi industry.
Since the inception of ride-sharing companies such as Uber, Lyft, Zoomy and Hailo — to name but a few — established taxi companies the world-over have seen a dramatic decline in profits.
This sudden decline has caused outrage from the companies and drivers of traditional taxi companies worldwide; protests against Uber have been held in multiple cities across the globe: in London, Toronto, Sao Paulo, Rome, Brussels and Paris to name a few. China is no exception to this — there have been numerous protests across the country against ride-sharing companies over the past five years.
Looking to the future
At the Asian Financial Forum held in Hong Kong earlier this year, April Rinne — a global authority on the sharing economy — gave her insights into what the future might look like. Rinne made five key predictions for the future of the economy: uneven growth, business model innovation, demographics, trust and enablers, and financial services. Based on these factors, she predicts continual growth of the sharing economy, with it increasingly becoming a "larger slice of the economic pie".
1. Uneven growth: The future holds both IPOs and bankruptcies; more people will participate and more people will withdraw from certain offerings.
2. Business model innovation: Widespread and refined business model innovation will expand services.
There will be more direct government participation. Access over ownership is here to stay. Blockchain will expand the sharing economy by creating value. Platform co-operatives give those who build and help create the business the ability to own the company.
3. Demographics: The emerging middle class, frontier markets, women (the she-conomy), the elderly, and those living in urban areas will all benefit from the sharing economy.
4. Trust and 'enablers': This is absolutely essential, says Rinne: "If we don't get this right, nothing else matters". It includes reliability, safety and risk management. Facilitators include peer reviews, insurance, facial recognition, online vetting, payments and taxation.
5. Financial Services: New mindsets bring new needs in a world with less ownership. The impact of the sharing economy on financial services will be significantly greater in the next 10 years, for example loans to purchase cars will diminish significantly in volume as people share more.
In order for this growth to continue and thrive, Rinne says "We need to ensure it grows well. It has never been as important to build a more inclusive, affordable, sustainable world."
The sharing economy
The sharing economy is the collective term for activity within the economy, based on the use of online transactions. Its origins lie in the peer-to-peer (P2P) architectural computer-based system of networking, but is now more broadly used to describe any sales transactions done via the online market — including those that are business-to-business (B2B).
Also known as the gig economy, the peer economy and the collaborative economy, the use of the term "sharing economy" is now more widely used, but also often considered misleading as it has grown and been overcome by many companies that are not based on the sharing concept, but instead are more traditional in their values — i.e. they sell, consumers buy.
Although by its nature it is hard to quantify and there is limited research on its growth, there is no question that the sharing economy is continuing to grow rapidly. PwC predict that globally it will be worth more than US$330b (NZ$483b) by 2025, up from US$22b (NZ$32b) four years ago.
It has become so much a part of the greater world economy that in the UK the sharing economy is now included as part of the national budget. South Korea has a department solely dedicated to the sharing economy within its government, and China was the first country in the world to frame the sharing economy as a "national priority".
