Analysis
For a European Collaborative Economy Association
On 3 October 2012 by Caleb Meyer

As the Sharing Economy becomes big business in Europe, its sustainability may be threatened by restrictive legislation and MNCs. In order to assure growth, Caleb Meyer argues that Collaborative Companies must begin to collaborate with each other. 

The trend is over: The age of Collaborative Consumption, aka The Sharing Economy, has begun.

As Finnish officials deem crowdfunding to be against Finnish law and as French officials begin to worry about Airbnb’s exponential growth, it is clear that the collaborative consumption movement has many more hurdles ahead. Whether it be banks, hotels, car companies, universities, or casinos, this sector uses technological advances to replace expensive intermediaries. In many cases those middlemen are large MNC’s with deep pockets and political influence.

Both economically and environmentally, the pre-sharing economy options were not getting the job done. Rob Atkinson, an economist and president of The Information Technology & Innovation Foundation, points out that

While the classic Keynesian economic view suggests healthy consumer consumption spurs economic growth, sharing encourages more-efficient use of existing goods and diverts capital to other types of consumption and investment.

In terms of the environment, “when measuring carbon emissions, home sharing is 66% more effective than hotels where as car sharing participants reduce their individual emissions by 40%.” Regardless of its benefits, as growth continues, collaborative consumptions’ disruptive impact on big businesses will not go unnoticed. The majority of collaborative consumption markets are up for grabs. While companies fight for market share, customers become increasingly comfortable with the services provided and push the movement into the global spotlight and towards sustainability. The low barriers to entry and growing customer response means more collaborative consumption companies emerge everyday primarily as startups; foraging for the next round of venture capital and big idea which will advance their company to critical mass and future profitability.

While competition is lowering costs, increasing creativity and advancing the movement, it has one glaring negative effect: companies must maintain focus on themselves and not on the movement. A user who has a bad experience on P2P vacation rental may then cancel his P2P car rental and return to traditional methods. Another user may be very conscience of the law and decide to stick with traditional methods because renting your home through Airbnb could be illegal. Despite the fact that customers see the link between different collaborative consumption platforms and laws, collaborative consumption companies are so focused on scaling that there is a clear lack of unity amongst a sector whose own name suggests collaboration.

Many arguments can be made as to why collaborative consumption companies in Europe have yet to form a lobby or political/strategic subcommittees:

  • Time constraints: as nice as it sounds to have a unified voice to tackle political and movement based issues, not everyone has scaled like Airbnb. Not everyone can hire that extra staff or find the extra time to discuss these critical issues.
  • Independence and organization: How does one company go about organizing an event and maintain neutrality?
  • Competition: Wherever you turn, there are tens of companies fighting for the same market. Whether P2P, B2C, B2B, cars, space, apartments, loans, tasks, education, competition within the same market in what could turn out to be a winner take all business hinders collaborative efforts.
  • Stage: Conflict due to stage of development between well developed sectors (ridesharing) vs. new initiatives (goods sharing).
  • Country: Some collaborative subsectors such as crowdfunding or P2P banking must abide by the laws of the country where the website is established.
  • Opinion: Since regulations have yet to be written, differences of opinion as to how to address these issues make it difficult to have a common voice.Those collaborative consumption companies who are more “formal” in terms of adapting their businesses to existing laws and tax regulations fear being associated with those “informal” companies who argue that the system does not take into account their business model.

Why is an independent organization for the collaborative economy needed?

  • Economic Intelligence: as a new sector, the collaborative economy needs to be researched and studied to better understand its positive economic, social and environmental impacts.
  • Events: increased opportunities to discuss, debate and collaborate amongst all stakeholders involved in the collaborative economy
  • Interests: an independent organization must be conceived in order to defend the interests of the movement as opposed to one particular company.
  • Voice: a clear, non-fragmented message must be given to each European countries’ government with respect to the positive impact and future regulation of the sharing economy. 

In the USA,

the Collaborative Economy Coalition promotes the continued success of collaborative business models by advocating for policy that defends and advances free enterprise, limited regulation and local entrepreneurism.

Working as paid advocates, the CEC fights against the powers that be for a more collaborative society. They point out many examples of how collaborative consumption is under attack by the disrupted MNC’s. While the answer may or may not be paid advocate groups like the CEC, in Europe, nothing similar exists.

But there is a solution. By acting as a neutral facilitator, OuiShare can play a crucial role in Europe’s growing sharing economy. OuiShare is the self dubbed “creative community for the collaborative economy.” As an independent and non-profit organization, OuiShare’s principle goal is to foment the sharing economy. OuiShare has no affiliation with any collaborative consumption company and works through a network of local connectors which unite collaborative consumption companies both mature and startups, as well as interested parties in the community or government. With proper funding, OuiShare could organize collaborative consumption unification events in Europe; taking advantage of its extensive network and neutrality to help foster growth via collaboration.

Committees must be formed with strategic visions for Europe as a whole and for each respective country. These committees can then form subcommittees based on their sector within the collaborative consumption economy. But the first step towards forming these subcommittees whether based on location, business model, company size, etc. must be a meeting of all those involved to determine how to continue, how to form each subcommittee. Above all, the question of how to structure the sharing economy’s response against the impending battles against government regulation and MNC lobbies must be discussed. And the sooner the conversation begins, the better.

The Age of the Sharing Economy is upon us, but for this Age to last more than a decade, collaborative
consumption companies must realize the importance of anticipatory preparation, put individual perspectives aside, and find time to unite for the cause.

Having said that, this is just one outsiders perspective, taking into account current trends.
What do you think? Is now the time to begin these debates, start these talks or form an association and sub-associations across the sharing economy in Europe?

Caleb Meyer From NGO financial guru to Startups/Tech, #CollCons & @OuiShare promoter. Efficiency amante. Numbers nerd. Travel junky. Redistribution of wealth idealist. USA national, Barcelona based since 2007. Profile →

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