2015: The year of the sharing economy for cities?

Last month, after presenting to the Greek government and hoteliers on the sharing economy and the future of sustainable tourism, I found myself in awkward company: a few people hissed during my talk and no one came up to speak with me during the break.

Yet the next day the press was enthusiastic, applauding not only the transformative potential of the sharing economy on the whole, but also Greece’s leadership for having brought it to the forefront. Moreover, city leaders whom I met one-on-one were also very excited. This shift in tone – sometimes overnight, often ongoing and hard to predict – is in many ways indicative of cities’ rapidly evolving approach to the sharing economy around the world.

The sharing economy – based on the idea of “access over ownership” – is not a panacea to global problems. It has its share of controversies. However, it is an incredibly powerful tool that allows individuals, companies and communities alike to do more with what they have. It provides new and flexible opportunities for income generation, cost savings, sustainable consumption, and social value.

Looking ahead, I see the sharing economy becoming an increasingly important part of the new global context in 2015. In the private sector, this means company growth, individual and business participation, expanded offerings (such as insurance and a range of logistics services) and (yes) failures as well. In the public sector, this should mean increased sharing in and by cities: more sharing by residents, more direct participation by cities (will more cities create their own sharing apps?), and meaningful progress on policy reform.

When it comes to the sharing economy, cities are becoming more:

• Supportive: Portland, Oregon announced its Shared City partnership with Airbnb last year and has taken a very open, proactive approach to enabling the sharing economy. They are also the first city in the world to persuade Uber to cease operations in the city for a three month period while they assess policy options. (Keep in mind that Uber does not self-identify with the sharing economy. Portland knows this; the public ought to, too.)
• Resourceful: Seoul, South Korea launched its Sharing City initiative in 2013 which continues to grow. The city is not only enabling sharing businesses, but it is also putting its own underutilized assets into shared use. For example, it has opened up more than 900 city-owned spaces to residents for creative and productive purposes, from music ensembles to yoga practice; in less than one year, more than 23,000 groups used these places – unlocking tremendous social value in the process.
• Engaged: Several cities in Europe, including Amsterdam and Milan, have launched sharing economy platforms, research agendas and public consultations. They are proactively assessing how the local government can best support what residents want, need and strive for. A range of activities are under consideration, such as changes to open up public procurement to include sharing economy platforms, mapping city-owned assets, and educating the public about what is locally shareable.
• Defensive: A small handful of cities – most notably Barcelona – are resisting. While it is understandable to want to promote local economic growth (a stated reason for their resistance), it is increasingly difficult to justify a heavy-handed approach that favors incumbents.
• And it’s not just cities. The UK government recently commissioned an independent sharing economy review with the goal of making the UK Europe’s sharing capital. The recommendations outlined a plan of action for national policymakers. We’re also seeing efforts at the regional level, such as Kirklees (a district in Yorkshire, England), which is one of five Bloomberg EU Mayors’ Challenge winners, for its plans to integrate the sharing economy throughout the district.

Despite the progress and momentum in many places, however, there remains a long way to go for cities to truly yield the maximum benefits of the sharing economy. In particular, cities have yet to:

• Develop a sharing economy vision: Although some cities are boldly forging ahead and understand the importance of the sharing economy – and how it can help them reach city goals – most cities are still doing very little. Not only are these cities losing out on benefits, but also they run the risk of being left behind. Moreover, many cities have yet to be introduced to the sharing economy as a tool for smart urban planning.
• Connect and collaborate: It remains extremely rare for cities to connect with one another and learn about each other’s experiences in the sharing economy. There is no easy way to do this: no network, learning platform or other mechanism by which to directly facilitate these relationships. City networks that exist for other purposes (such as C40 for climate change, or Bloomberg Cities for civic innovation) could be good places to start, but they have yet to embrace the sharing economy opportunity.
• Fully utilize technology: Cities stand to benefit from the sharing economy by putting some of their resources – from spaces to equipment to car fleets – into shared use. Providers such as MyTurn and NearMe offer white-label solutions (sharing economy platforms) that can be customized for municipalities, making this easy to do.
• Engage with sharing economy companies: Cities and policy makers have much to gain by working with those sharing economy companies that have social impact at their core, seek to build community, and see policy makers as potential allies rather than enemies. For example, Airbnb’s policy team reaches out to local governments in many markets and has stated many times that it wishes to collaborate to develop appropriate policies for new business models.

The sharing economy presents a huge opportunity for public sector leaders, creative policy makers, and visionary companies who are keen to contribute to the communities that they serve. It is time to move beyond the binary debate about outdated rules. We are not stuck with a choice of regulating sharing economy platforms like traditional providers, or not regulating them at all. Rather, leaders should take a hard look at the needs of today’s cities, recognize how the sharing economy can help reach cities’ goals, and develop rules that maximize this potential while enabling new forms of business with social value to thrive.

2015 will be a pivotal year for the sharing economy, cities, and the new global context. Davos provides an ideal forum to catalyze these opportunities – and shift the tone of the conversation as the Greeks did during my three days in Athens.

Author: April Rinne is a sharing economy expert and a World Economic Forum Young Global Leader.

Image: A man walks past buildings at the central business district of Singapore February 14, 2007. REUTERS/Nicky Loh.