Collaborative Chats Roundup: What are the Economic Impacts of Sharing on Local Economies?

Last night’s collaborative chats explored how sharing and collaborative consumption will change local economies. We often use the word “disruptive” to describe collaborative consumption’s impact, but what do we really mean? How does it effect labor markets, micro-entrepreneurship, government services, and life in both densely packed cities and rural communities? As participation in collaborative marketplaces grows, what positive and negative economic impacts will arise? How will it impact businesses and corporations? And how do we measure the economic impact of sharing?

The conversation started by exploring whether collaborative marketplaces actually do create positive economic development - and if so, how can it be measured? If economic development is a measure of an increase in income, employment, and economic activity within a community, how do we measure for those impacts when someone rents a room on Airbnb or shares a ride on Zimride?

In Airbnb’s case, the idea is that perhaps someone will make a trip to a city they may have not been able to afford without their service, and that traveler will likely decide to spend money in their host’s neighborhood and seek out more local experiences than say, going to Starbucks or staying in "tourist ghettos" during their trip. That can translate into more money being directed into local economies via the hands of local people. But the economic impact of a service like Airbnb is harder to track then, say, the economic impact of a chain hotel that can clearly identify its vendors and jobs created. There seems to be a real need to figure out economic impact within the space - and within the different verticals of the space. In other words, the economic impacts of car sharing are going to be different then the impacts of tourism via Airbnb. More exploration of these impacts are going to be important to be able to tell the story of why cities and communities should adopt a more shareable way of doing business.

Why do people enter collaborative marketplaces and what does that mean for business and labor?

The reason sharing works is because there’s a need that’s not being well met in the current market. In everything from tourism to government services, there are needs that are not being met. For example, a growing trend is for people to want a more unique, personalized, and customizable experience when visiting a new city, so they use Vayable or Airbnb. Or, they want to borrow a car across the street instead of two neighborhoods away, so they use RelayRides. Maybe I can’t work full time because of a health condition, but there’s not a job that will give me the flexibility to go to necessary doctor appointments, so I become a TaskRabbit. Collaborative markets fill the gap that’s left from the less agile systems we have in place now.

Many in the audience questioned the potential negative implications of a complete switch to a sharing economy. For example, if everyone is running their own cab companies and doings tasks for each other inexpensively, and bartering, what does that mean for the industries that employ us currently? Does that actually hurt the labor market?

As Molly Turner, policy lead at Airbnb put it, it’s important to realize that the growth of the sharing economy isn’t a zero sum game - that the end goal isn’t to kill businesses but instead to “change existing models to become better and more collaborative in some way”. Perhaps, instead of businesses seeing these emerging markets as competitors, they can see this market as an indicator of how they need to adapt - into better, more inclusive and efficient systems themselves.

So, how do we tell the story of the economic benefits of sharing?

Molly pointed out that economists have found a way to put a monetary value on pollution, but we don’t yet have a way to measure the value of cultural exchange or happiness. While governments continue to measure their economic sustainability in terms of GDP (the market value of all goods and services produced within a given period), the reality is that we need to redefine what the indicators of economic growth and development are, and measure the impacts of the factors that lead to true sustainability. Happiness of a population is a good indicator. Health and environmental impacts are others. I would say connected communities is probably an indicator, but everyone - from community organizers to non profits, to collaborative consumption communities are trying to figure out how to measure that. Perhaps a coalition needs to come together to figure out how to do it (Anyone want to take that on with me?!)

How do we shift people’s behaviors so that they share more?

Lauren Anderson, Innovation Director of Collaborative Lab, believes that consumers' behavior will shift when collaborative consumption becomes 1) as convenient, 2) cheaper, 3) as customizable (or offers as much choice), and 4) as safe as whatever service or market people are using currently. Once invited in, living shareably will become second nature. In the same way that many of us go to Craigslist when we need a vacuum cleaner or new housemate (Frankly I don’t even know how to find an apartment without Craigslist!), going to a sharing marketplace will become an instinct if it's made a consistently convenient and a positive experience for people.

Egon Terplan questioned whether or not the collaborative economy would become exclusive to those who have assets that are valued by others in the marketplace. I’ve often heard the argument that these services are only accessible if you live in a “desirable” area or have a nice car. It's an interesting point that's worth exploring, for sure. But actually, if you go on Airbnb or Getaround, you can find all types of cars and spaces in diverse neighborhoods. A definite issue, however, is if those without access to the internet will be left out of this emerging marketplace. Perhaps creating access through mobile technology will help increase access to these services. But the underlying value of the collaborative consumption movement is powerful and inclusive one. Molly said it best: Collaborative consumption and sharing creates an opportunity for those left out of the economic mainstream to find an alternative. In the sharing economy you don’t need a college degree to teach a class on Latvian cooking or providing a unique view of your community to someone visiting. In the sharing economy, people find the inherent assets within themselves, and that empowers them to become micro-entrepreneurs and grow the economy.

If you’re interested in continuing to explore this topic, please join us on April 3rd at SPUR for a continuation of this conversation with the founders of Getaround, TaskRabbit, Vayable, and Airbnb, and Jay Nath the Director of Innovation for the City and County of San Francisco.

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