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How sharing services can turn enemies into friends

Savvy companies are realizing that to ensure their future growth, they have to more persuasively explain how the sharing economy benefits not only the participants and the users but society at large.
The Strategy and Corporate Finance blog

– The sharing economy has boomed over the past five years as consumers enthusiastically embrace new ways to control their own transactions. Airbnb is now active in more than 190 countries while Uber operates in more than 300 cities. Numerous other startups are enabling people to share everything from meals to clothes to electricity. But this growth is accompanied by increasingly forceful protests from regulators, industry incumbents and other critics who accuse some of the newcomers of being patronizing, arrogant and disdainful of the rules.

Here are three ways the sector can build trust.

1. Set the record straight

The recent negative publicity creates an opportunity for sharing-economy players to highlight their social contributions and correct misconceptions. Aside from employment and economic benefits, sharing services could also be a boon for some of society’s challenges. What, for example, might be the role of ride sharing in cutting emissions in the 93 Asian cities that rank among the world’s 100 most polluted? Could ride-sharing services provide safe work opportunities for female drivers in some countries?

The data-analytics capabilities of sharing-economy players put them in an ideal position to inform discussions with stakeholders. As one Asian government official told me, “Bad lobbying is telling me something I know. Average lobbying is telling me something I did not know. Excellent lobbying is telling me something I did not know and that’s useful to me. Good analytics can make that difference.” Ride-sharing services, for example, could use their superior understanding of city mobility patterns to help municipalities in planning.

2. Build alliances

Traditional industries rely on powerful trade associations and alliances to give members a unified voice on an important topic, represented by a strong leader, and backed by persuasive research. The sharing sector could greatly benefit from forging a unified front that suits its own, less traditional style.

Such cooperation could go beyond bringing peers together to finding common ground with other industries. Insurance companies, for example, are starting realize that the sharing sector is relevant to their future and need help to fit these new models into their traditional actuarial analysis. Meanwhile, many new feeder businesses, ranging from rental-management to meal-delivery services, are springing up around room-sharing. Such ecosystems, if well organized and supported, could underpin new models for tourist areas.

3. Don’t litigate—help regulate

Policy confusion about the definition of the sharing economy represents a big opportunity for companies spearheading it. Sharing economy companies could follow the example of telcos and energy producers by helping policymakers identify areas for regulatory intervention.

For example, they can offer to:

  • Collect taxes: Airbnb has already started collecting occupancy taxes for its hosts in Barcelona and Paris.
  • Clarify oversight roles: In some areas, regulators and sharing services can together address broader concerns. Could ride-sharing companies collaborate with local authorities to prevent abuses by drivers? Can room-sharing companies address worries about rising rents in cities such as Florence and Reykjavik?
  • Coexist with incumbents: How can ride-sharing and taxi offerings be more clearly differentiated? How can room-sharing services help municipalities host big events such as the 2016 Olympics in Brazil?

The sector leaders are already making moves on some of these fronts. Participants should embrace the opportunity to play an active role in developing long-term solutions to the challenges their emergence creates.

Alberto Marchi is a senior partner in the Milan office.

Originally published on LinkedIn.