The collaborative economy

aut3 2016 ...or when working together becomes disruptive.

In late April, we had the opportunity to take part in a presentation on the sharing economy at the Brussels Business Club, De Warande.

The ‘collaborative economy’, alias ‘sharing economy’ or ‘peer-to-peer economy’, is often seen as disruptive. Uber, AirBnB and BlablaCar are the well-known examples of these new ventures, which use a common electronic platform to match peers, who will exchange services or goods.

The first speaker was Mr. Meuleman, who represented Taxistop. Taxistop has existed for over 4O years and can rightly be named one of the pioneers of the sharing economy. It employs 80 people and has already saved the distance from the earth to Mars (and back) in miles by stimulating people to share their empty seats in their cars. Taxistop was born with strong principles, such as a sincere concern for the planet translated in sharing where we can. They still believe strongly in these values and one of the outcomes is that they can hardly be named a firm, they are more an NGO.

This was definitely not the case for another speaker, the General Manager of Uber, who in 2008 created a technological platform that revolutionized the cab industry. Uber is active in over 400 cities in 60 countries and surfed the current wave where ‘utilisation is more important than ownership’. They definitely have a business approach and their rationale is purely financial. ‘If you look at it from a financial perspective,’ he explains, ‘the ownership of a car is not a very good investment’. The utilisation percentage of the asset is rarely higher than 4% and, even then, people drive them with often several empty seats.’

Marion De Bruyn, the Dean of the Vlerick School gave the academic point of view and spoke about the characteristics of this ‘disruptive’ economic trend.
She warned for the fact that we often underestimate the effects of the new trends, partly due to selective perception. She mentioned the fact that Time Magazine already opted to choose us – in other words, consumers like you and me, as ‘The person of the Year’ in 2006. The main reason being that from then on, each individual had the opportunity to become a full participant in the different markets due to new technologies. Now we upload instead of downloading. In the U.S. nowadays 44% of the population already participates in the GIG industry (AirBnB, Uber, …) and the trend is growing.

She also stated that we see a new trend often more as a threat than as an opportunity and that definitely in discussion, people see it as something that we have to retain. In particular, we talk a lot about it and don’t act accordingly. Our attitude is defensive and we try to protect the status quo.

She also predicted that these new technologies will result in new business models that will be a change agent. The key question is: ‘What is worth the consumer paying for?’ Is the consumer still willing to pay for the ownership of products or does he only want to pay for the use? Does he want predictability and a standardized service? e.g. Holiday Inn, McDonalds or diversity and new experiences e.g. AirBnB, Flavour. Does the consumer need a brand to inspire trust or will he/she rely on quality control systems and peer evaluations?

The sharing economy will also bring new issues. Is an Uber driver an employee or an independent freelancer?

Mr Meuleman warned us that in this new economy, the winner will take it all.
Only time will tell, but this was definitely an interesting evening.