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Is The Sharing Economy Really Sustainable?

Updated: Jul 24, 2018

Michael Qian, Founder and Co-CEO, SharingOS

Image Source: Unsplash

Originally published on Medium

“In theory, there is no difference between theory and practice — in practice there is.” - Yogi Berra

In theory, the sharing economy is great for the environment.

The economic benefits of disintermediating supply and demand are huge, and people tend to assume these are matched by the environmental benefits of pooling resources. But this isn’t always the case.

There’s a misconception amongst entrepreneurs, consumers, journalists, even politicians. Everyone assumes that mobility sharing is fundamentally good for the environment and that by using innovative technology to match buyers and sellers, the likes of Uber and Airbnb utilise assets like cars and properties more efficiently, helping society to minimise wastage.

This seems self-evident, but it’s not always the case. Right now, at this early stage in the development of the sharing economy, it’s a dangerous fallacy. Researchers are still scrambling to figure out the net environmental impact of car sharing apps, but bike sharing has grabbed headlines for the wrong reasons in recent months, with bike graveyards piling up across China. The same is happening in the USA, with Slate recently publishing an article with the headline, “Wow. Look at These Astounding Photos of Abandoned Dockless Vehicles in America.” The environmental impact of mobility sharing has been at best simplified, at worst, misrepresented. So, what should we believe?

Mobility sharing should be good for the environment, but it requires the production, distribution and maintenance of hardware, in the form of vehicles. It’s challenging to match supply and demand, and when platforms fail, the green credentials of the sharing economy break down. When startups and unicorns manufacture huge volumes of vehicles and fail to fill them with customers, they produce more greenhouse gases than they offset. This is a very real problem, a dirty secret that is plaguing mobility sharing and threatens to undermine its long term prospects.

The answer to this problem is simple, but hard to implement. It requires sustained public-private collaboration, as highlighted out by McKinsey. But most of all, it requires increased vehicle utilisation, so that platforms offset more carbon than they produce. This is a huge challenge, and it’s precisely what we are tackling at SharingOS. We call it the sustainable sharing economy.

SharingOS is a plug-and-play platform that enables mobility sharing globally. To build the sustainable sharing economy, we are taking concrete measures across markets.

We’re working closely with regulators to prevent oversupply. We believe our bikes should be used at least 2–3 times per day. This is different to what’s happening in China, where regulation is lacking and over 70 bike sharing companies are fighting for market share. The result is bicycle graveyards, which are a physical blight on our transformative, socially constructive industry. With the right regulation, this kind of wastage can be minimised.

Here at SharingOS we’re also working hard on the microeconomics of our enterprise, ensuring our business model is robust enough to support our mission to power a global mobility revolution. Due to attractive LCVs (long-term customer values) associated with car sharing, platforms in this space spend literally hundreds of dollars to acquire every user. Small operators cannot afford to enter the market. They cannot find passengers to fill the cars that fill our streets. We need to find a quicker, cheaper way to acquire mobility sharing users, so we can do a better job of matching supply with demand, and this precisely what we’re doing at SharingOS.

There is a creative, oft-overlooked solution to this conundrum. We believe that bike sharing is the best and cheapest way to acquire users and build long term relationships with them. Our strategy with SharingOS is simple. First we transform mobility sharing for people with bikes. Then, once we have demonstrated the value of our platform, we help users to access other mobility solutions, such as e-bikes, e-scooters, and electric cars. Our agnostic approach provides integrated mobility solutions to get people from A to B.

So, to rid the world of “bike mountains” we’re combining close regulatory cooperation with a strategy that focuses on rebalancing the market forces of supply and demand.

This is an innovative, pragmatic approach that addresses the environmental contradiction at the heart of the sharing economy. By focusing on the demand side of the market, we are transforming the sharing economy, making it sustainable over the long term and helping to realise its revolutionary potential.

The author is Founder and Co-CEO of SharingOS, a London and Shanghai based company that enables effortless, plug-and-play and sustainable solutions for partners to thrive in the mobility markets worldwide.

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