UBER – the increasingly popular ride-sharing mobile app that has riled up local authorities – has not only been controversial in Malaysia, but also in the Philippines, Australia, Germany and many others. And so, when we were asked to carry out a group campaign as part of a Think Tank MBA programme that I recently graduated from, it was simple enough to decide: we would set up a global coalition to promote the sharing economy, called #WeShare.
The sharing economy is basically peer-to-peer voluntary exchange of goods and services, which rides primarily on the speed and efficiency of technology. The global revenue of the sharing economy currently stands at US$14.5 billion and is forecast to reach more than US$360 billion by 2025. In the UK, 25% of adults already share online. In the global market, sharing in key sectors such as holiday accommodation and car sharing is estimated to reach 50% by 2025.
Online sites like eBay have optimised on consumers becoming retailers themselves for years; today, websites like Airbnb, and TaskRabbit match owners and renters, making use of smartphone technology to optimise their delivery of services. A similar tool to the US-based TaskRabbit in Malaysia is the recently set-up site called GoGet, which allows people to outsource their “to-do” list to others willing to run errands for a small fee.
The reason the sharing economy is so powerful is that it is user-driven, allowing each member of society the opportunity to earn on the existing capital that one already owns. The potential for growth is huge, as people may start to think of items in their own storerooms, which they would only ever use once a year.
Take for instance your bicycle, or power drill, which could easily be rented out for a small fee – if there was such a facility online to allow you to make extra pocket money for it. Companies could also capitalise on this as a business – idle office space and machines are just some examples.
If these apps are indeed bringing great benefits to consumers, why is it that governments around the world – including ours – are not exactly taking to it kindly? The reason given by the Land Public Transport Commission (SPAD) in Malaysia is that Uber would need to comply with the laws requiring any driver who offers their service to apply for the appropriate licences. Like in most other countries in which Uber has been introduced, the local taxi lobby has been vocal against it. Taxi services that have monopolised the for-hire car industry for so many years would now need to compete and provide better quality services.
A second reason why governments may fear the sharing economy is their inability to regulate such private transactions. The government may feel it is their responsibility to ensure consumers are protected from potential dangers from unlicensed private drivers (in the case of Uber) or unapproved hotel-like rooms (in the case of Airbnb). But these peer-reviewed services make up for this by allowing for customer rankings and automatic feedback to be transparently made known to the public. Another person would not likely use a badly rated driver or apartment.
Finally, governments would be concerned that they are unable to monitor and collect taxes accruing from these services. This is legitimate, since the systems presently in place would simply not be efficient enough to track online transactions very well. However, this indicates the need for the tax system to modernise itself accordingly, taking the new sharing economy into consideration. When it does so, governments might even acknowledge that this increases their revenue base.
There are tremendous opportunities in countries like Malaysia that are so well connected – apparently, we have the second highest broadband penetration in the world – and the authorities would do well to recognise the positive impact the sharing economy can have on our economic growth.
Instead of viewing companies like Uber with distrust, we should celebrate a world in which everyone can be a supplier of goods, services and experiences. Each one of us is ultimately a consumer. Accessing these items we need when we want them, on demand, and at a price we can afford is part and parcel of the future.
Tricia Yeoh is the chief operating officer of a local, independent think-tank. Comments: firstname.lastname@example.org