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Monday, 03 March 2014 01:24

The economic impact of sharing

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Last night on the 22nd of March, I had the pleasure of attending Collaborative Chats, a new series put on by Legit in Association with Shareable.net and orchestrated/hosted by the lovely Emily Castor

I diligently took notes throughout the talk and much of it is paraphrased and or filtered through my own lens. So please don't take these at exact quotes, but rather as information to absorb and think about --- much like a series of tweets.


Lauren Anderson
Innovation Director, 
Collaborative Labs

Egon Terplan
Regional Planning Director, 
San Francisco Planning + Urban Research Association (SPUR)

Molly Turner
Director of Public Policy, 

Emily: Is there expansion in overall spending from sharing? Is money being disbursed to new people? How does sharing affect the hotel business?

Lauren: These are old market behaviors. I don't think we need to rationalize these behaviors. Egon: One needs an asset to share and this is exclusionary.

Molly: Is it exclusionary? Assets don't have to be material goods, good be a unique perspective, knowledge of an ethnic cuisine, etc. Lauren: It lowers the barriers for more people to participate as micro-entrepreneurs.The shift of power structure is changing to include things like location.

The fear is that people with a small set of skills might drive the wages down. How large do you think this movement will get? Most of the time tourists remain in tourist ghettos... so is there an economic benefit in dispersing tourism with things like airbnb?

Egon: More spending is overall a good thing. For example, when Oracle comes to town with a convention, the sharing economy provides an great overflow valve. The sharing economy can fill in those gaps during peak times to manage peak demand for things like cars and hotels.

Molly: Cities need to differentiate by more than grand architecture. airbnb does that with people. Bringing tourists to new neighborhoods and having that money being reinvested back in the neighborhood. For example, I rent my place on airbnb and using the money I made, I repainted my house. What does that do for home values nearby? How do you measure that?

Lauren: Hilton isn't going to lie down and roll over. A personalized experience is what everyone is looking for. We're moving to a service and knowledge based economy where people can do more than one thing more than one job at once.

Emily: What promise does that offer to the individual?

Lauren: For people who have a disability or illness, it provides them with flexibility. We shouldn't be afraid that everyone is going to hop on board. Egon: Small businesses outsource tasks too. Small isn't inherently good or local. Not everything is going to be shared.

Emily: What can policy makers do to help the sharing economy build local economies?

Egon: Simple things like helping someone write a business plan.

Molly: Right now, in Oakland they are building a new stadium to improve economic development, which will hire a lot of low skill level people.

Lauren: Collaborative consumption can solve problems like congestion on roads through car sharing. Policy makers could think of dealing with this through rewarding, incentivizing and mandating these things. Then there is all the stuff ending up in landfills. Policy makers have an amazing role to play.

Audience Questions

When there are so many inefficiencies in government to start a business (permits, fees, costs, waiting), the peer-to-peer movement seems to be getting around that. What are you thoughts?

Lauren: Eventually things will catch up and governments will weigh in. The goal should be to get governments on board with what the sharing economy can do for people.

Molly: There is some good and some bad to the red tape. Risks do need to be protected and those agencies are there for a reason.

Egon: Some regulations are there for dumb reasons. For example, it's still really hard to open a restaurant in San Francisco. There are 18 different departments and none of them want to speak to each other. It's about being responsive. Governments all over the world are having the conversation about smart cities. When a flood happens, what do we do to make it easier to be responsive?

At what cost do you prevent misuse? Home inspection laws.... what is realistic vs. unreasonable? I have an apartment that I'm retrofitting to rent on airbnb.

Molly: That loft better be safe. These laws need to be written so that it's easy enough to comply. 
Egon: The issue is that building code is arbitrary. Each inspector is different and will react differently to a home inspection, event though the rules are the same.

Through sharing, is there a net positive impact for cities? Do we know for sure? How do we know?

Egon: It's hard to measure. There is the impact on the individaul host, the city... Hotels by food, furniture, the service of a house keeping staff, etc that can be measured. Individual entrepreneurs are harder to measure.

What about in the world?

Lauren: We're seeing sharing in the UK, Europe, Asia, Japan and Columbia. It seems to be too early to measure. Every vertical of collaborative consumption is so different that they need to be measured individually.

With sharing, it's likely there are less transactions and less GDP. What do you think about that?

Lauren: GDP is a relatively new measurement and concept. I don't think we should be measuring solely on how much stuff we're shipping off to other countries. What about a gross happiness index?

Egon: We don't need as many knowledge workers in the future. Humans are being replaced by technology. As I said earlier, when you think about economic impact you must first think about overall impact and then about job creation.

For every person who benefits, there are 50 that want thing. For example, people can't find a place in SF because people are holding onto apartments through services like airbnb.

Molly: Government protection is needed here. 

Egon: Rents skyrocketing? Build more housing. Regulation and planning is needed here. Supply and demand laws to work over time.

Lauren: These issues are not unique to collaborative consumption and need to be solved with regulation.

Is an unused hotel room the result of someone using airbnb? How can you measure that when not everything is monetized? How do you price that in?

Egon: Maybe a fee could be added to each reservation that goes to the cities rental office and provides public benefits.

Lauren: The cost of pollution is measurable whereas the benefit of new relationships are not.

How do you actually share in city?

Lauren: There are grant programs and non-profits popping up all over the place. Technology is allowing us to come closer together, our associations are tighter, which means barter and exchange becomes a lot easier

Molly: Cities exist because of sharing. In the future it will be easy to share with neighbors... we need to remember why cities exist in the first place.

Is sharing possible in low density places?

Lauren: Peer-to-peer works everywhere. It's not about being in a city... it's about the circumference by which you're willing to venture. In fact, there was just a infographic put out by craigslist that shows how far people are willing to travel. On a macro level, high density doesn't matter as much.

Is anyone thinking about how collaborative consumption could affect transport in developing countries?

Lauren: There is less focus there, but we're seeing it in India. People need access to technology, so it's mostly mobile based. Most models spread with platforms online, but we're seeing things as simple as a notice board and as complicated as a website being used to spread things like ride sharing. 

Why are we having this discussion and why all of the focus on GDP? Seems to me that limiting buying more stuff empowers people to buy better stuff. 

Molly: Unfortunately, we gave to have discussion because it's the way to give legitimacy in current economic system. 

What about customers that want and are used to a predictable experience. How do we serve them?

Molly: Needs to be cheaper, better and more reliable. People are looking for authentic experiences, so industries like tourism can help blaze the way. Maybe after staying in an airbnb apartment that individual will seek out a local coffee shop instead of starbucks?

Aren't structural inefficiencies the biggest thing to measure an quantify on the supply side?

Egon: Labor has a downside because labor has peak demand, ultimately not individualistic. When you consider things from a public perspective, everyone needs to be part of the experience. We should be cautious how it gets expanded.

Lauren: No industry is safe: banking, food, tourism... we're moving past individualism. We are not the sum of what we own. We're just now realizing the power of the holes in our economy.

Read 621 times Last modified on Monday, 31 March 2014 07:35


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