SUSTAINABILITY

Digital Enablers of Sharing Economy

Most of the things each of us own stay unused most of the time. In the United States and the United Kingdom around 80% of all items owned are used less than once per month leaving a large amount of goods unused, when they could be useful elsewhere. The way of life of modern societies is characterized by growing consumption of resources, increasingly at the expense of the environment. A digital sharing economy offers a way for citizens to share, rent and replace under-utilized assets by the help of digital solutions and alleviate the pressure of the planet’s resources. 

By Josephine Andersen

March 7, 2021

What is the sharing economy ?

Adding to the list of hyped solutions, the sharing economy might seem like  yet another “green” approach that offers little but buzzwords. However, sharing is a basic premise  of society. The sharing economy is a wide concept that covers different activities and services with the aim of increasing the circulation of assets by capitalizing on the underutilization of goods and products.  It can be described as “consumers granting each other temporary access to under-utilized physical assets”. It is about consumer-to-consumer sharing through platforms where they provide each other with temporary access to a good, thus the transfer of ownership through second-hand shopping, or leasing of cars as an example, does not fall under the concept of the sharing economy. By making existing goods available  for those who need it, the sharing economy seeks to develop efficient use of physical assets among citizens and typical goods that circulate in a sharing economy are cars, tools, clothes - even homes.

Environmental benefits of sharing

There is a strong consensus that new consumption patterns are needed to tackle the current overexploitation of natural resources and generation of greenhouse gases (GHGs) related to production. By enabling access over ownership, the sharing economy holds the potential to promote more sustainable consumption practices based on sharing can address contemporary urban challenges such as waste generation and local pollution, but also social aspects like unemployment and social segregation. As such, dematerialization of the economy  through sharing, might offer a sustainable solution to the growing environmental and urban challenges. Sharing as a concept is by no means new, but by connecting citizens and their communities through digital platforms, the need for new products can be reduced  by capitalizing on the idling capacity  of underused assets. 

Digital technologies as enabler of the sharing economy

The sharing economy is to a large extent ICT-enabled as it relies on technology to facilitate the sharing by providing access to information and mediating the exchange through  apps or platforms. Such platforms can provide a faster access to goods, with no or low intermediary costs and innovative ways of offering services. Bike pools are well known and widely used across cities. U-bike is a Swedish municipal initiative for renting electric cargo bikes through the service platform Triply. Another example is Nabohjelp, an app for neighborhoods that allow the residents  to borrow tools, sports equipment or other everyday objects for free by either searching for objects available for borrowing or making a request for a specific object. 

By establishing the connection within communities digital technologies can help us to connect with strangers to rent and borrow.  We have already observed  several such solutions, with some of the most well-known such as  the likes of AirBnb and Uber. However, these  companies have provoked loud criticism for their impact on society and working practices and have added a dent to the idea of a  digital sharing economy.  An alternative to such models  is a sharing economy in the form of more local solutions, steered by local municipalities. This can be referred to as the sharing city where municipalities or community organisations facilitate solutions that ensure delivery of public benefits and at the same time restricting those that might bring about negative impacts on society. 

The city of Amsterdam was in 2015 named the first European Sharing City. Building on its experimental approach to digital transformation, the shareNL has fostered solutions such as Peerby, where citizens can rent or lend a wide range of tools, Barqo and GoBoat which connects boats that are unused 92% of the time which tourists and locals. The motivation for the city to encourage this development, aside from the facilitation of better access and more sustainable consumption, is the idea that the sharing economy cultivates interest in participation and contribution to the city by harnessing the connectivity provided by digital technologies. 

Closing remarks

The environmental benefits of the sharing economy may seem obvious as it increases the utilization of already existing resources which should reduce the need for extraction of new resources. However, a significant research gap still exists concerning the benefits of the sharing economy and its possible rebound effects related to the circulation of goods and increased digitalization. If done right, the sharing economy can reduce the current negative impact from consumption and production and create greater access to resources by harnessing the possibilities of digital tools. 

Josephine Andersen is a graduate student at Sciences Po Paris where she is completing her masters in International Public Management. She has a Bachelor degree in Political Science from the University of Oslo. She is currently an intern with the Centre for European Policy Studies in Brussels where she does research on European environmental and energy policies and she is involved in several research projects on circular economy. Josephine is fluent in English, Norwegian and Danish, and with basic knowledge in French.