The sharing economy has grown exponentially in the past few years to the point where it has impacted nearly all industries.
Airbnb and Uber are the most obvious examples, but other sectors such as logistics, utilities and education have also been disrupted by new startups.
And I previously wrote a post looking at five interesting startups that are impacting life sciences.
At Le Web today Jeremiah Owyang hosted a panel that discussed the extent to which the sharing economy is revolutionising established industries.
Sharing startups have raised more than $8bn in funding, with most of it going to transportation companies.
Jeremiah Owyang’s Collaborative Honeycomb (click to enlarge)
One of the beneficiaries of this investment is Lyft, which was represented on the panel by David Estrada.
He was joined by Olivier Grémillon, the managing director of Airbnb in Europe and Africa, and Frédéric Mazzella, the founder and CEO of BlaBlaCar.
Owyang began by giving his five predictions for the sharing economy in 2015:
- There will be new sharing startups in every business sector. Funding and execution will dictate the winners.
- Mature platforms will launch APIs resulting in more growth and analytics.
- There will be a global debate about user safety, privacy and sharing of data.
- Crowd demands startups share value with people, leading to more open source movements.
- Governments and corporations realise they have to get involved, so sharing goes mainstream.
And here are some of the highlights from the panel session. For more on this topic read our posts on nine user experience lessons travel sites can learn from Airbnb and 40+ peer-to-peer startups in the sharing economy.
What has caused the massive growth in the sharing economy?
The internet and smartphones have allowed us to share resources that are expensive to use, such as cars.
The Ford Model T was created in 1908, a company likes ours would probably have launched in 1909 if the technology was around.
The recession definitely played a role in the growth we’ve seen. It was a catalyst for new services to emerge.
But the tech aspect is also true. Through a cellphone or laptop it’s very easy to book a house or villa wherever you want in the world. And it’s the same with other services.
In our case it’s as easy to book an apartment in the street next door as it is on the other side of the world because all transactions are done in your own currency.
It’s also the case that people want more sustainability, to build more connections with other people, and to generate revenue from the assets they already have.
How do you balance a global strategy with catering to localised markets and cultures?
It’s a case of having two complementary strategies. You need a global strategy so your product is generic enough to be scalable, but you have to keep a part that is adaptable to local cultures and economies.
We want to build a brand that can expand anywhere but there are certain blocks that can be tailored to local markets.
Our service is hyperlocal as different situations present themselves in each city.
San Francisco is perfect for us as it’s only seven-square miles and densely populated. There are very few garages or parking spots, and people tend to be quite social and are often looking for extra work.
In comparison a city like Houston is a very different market. Car ownership there is high, gas is cheap, and there are more parking spaces than they know what to do with.
So it’s not as easy for us to establish a presence in that type of city.
If we want to launch in Paris, for example, we need to do a lot of work to understand the market, make sure we have enough drivers to satisfy demand and take account of regulations.
Privacy and safety are key concerns with the sharing economy. How can we make sure the public are happy with how these startups operate?
The amazing thing is how few problems actually occur. At Airbnb when we look at the number of cases where something happens (e.g. breakage or property damage) it’s really small.
In fact we recently increased our claims liability to $1m, as it doesn’t cost much to offer this service because not much actually happens.
What about the information that you have on people? How do you enable privacy?
Maybe you just don’t use the data at all. It’s used for analytics, but nothing else.
I think the culture of the company is very important. Our pool of people roughly doubles ever year, so if you want to keep the right culture you need to write it down.
When we had 60 staff [BlaBlaCar now has around 200) we all gathered in a room and asked what values we have, what makes it so special to work here, and how do we make sure new people have the same spirit and culture.
We came out with 10 values that we use to define ourselves.
Trust and safety have to be at the heart of your service. We’re offering platforms for people to come together.
This is a very competitive marketplace with a low barrier to entry. You have to provide people with safety and privacy or they’ll go elsewhere.
At Lyft we know the origin and destination of all rides, so we have to put tight controls on who can access that information and limit access to people who really need to see that data.
Do you have a message for government leaders on regulating the sharing economy?
From our perspective the first thing to remark is that people are sharing cars, they’re not making profit.
Our users simply share the costs, so it’s just like they’re sharing the cost with friends and family members. They’re not offering a professional service.
The sharing economy is a new way of interacting with each other, for the next generation it will just be normal.
We’re so new there are no laws to regulate what we’re doing.
It’s normal that there’s a reaction to a new phenomenon, but I think we’re past the point where governments think they have to try to regulate us.
As long as you explain what you do, how it will remove some costs for the users, how more people can visit some wonderful cities, then it will be fine.
In some cases it does need to be regulated as you need things to be fair and clear, and it’s normal that this creates some debate, but it’s a healthy debate.
Governments don’t have a framework for what we do.
They have regulations for taxis that are aimed at trying to create a safe environment and they want to do the same for us.
We need to change the mindset and show them that we can create the same level of trust and safety with no level of regulation from the government whatsoever.
We already take on background checks and all of the costs.
Let us take on the burden and let individuals deal with one another directly without the government always being the intermediary.