The Sharing Economy – Why I’m a Fan

>>The Sharing Economy – Why I’m a Fan

Some say that the new sharing economy, meaning our ability to share infrastructure and services mainly due to technological advances such as the ubiquity of smartphones, will transform our societies. While the longterm effects remain to be seen, I can already say that I’m a huge fan.

Car2go vehicle. [Photo: Solches, CC BY-SA 3.0]

Car2go vehicle.
[Photo: Solches, CC BY-SA 3.0]

Take transportation, one of the major areas where new services are popping up. A taxi ride from my home in Frankfurt to the airport costs around 46 Euros. When I choose Uber, I can either use their limousine service (called Uber Black), which will cost me around 41 Euros, or UberPop, where people offer to take you in their private car. If I am willing to drive myself I can opt for Car2go, a car sharing services offering Smarts that you can take and park anywhere in the city. Usually, there will be a vehicle nearby and the cost of the ride is around 13 Euros.

So in short, even the most expensive alternative to a taxi will be around 10% cheaper and will offer me a much better service, namely a fancy black luxury limousine (the two times that I’ve used the service I had an Audi A8 and a Volkswagen Phaeton). UberPop, which I would rate on par to an average taxi ride, is already at almost half the price of a taxi. And if I’m willing to drive myself and accept the slight inconvenience of having to go and pick up the car somewhere in the neighborhood I can save a whopping 70%.

How’s that possible? Before you start crying foul and point me to meager payments to drivers and other alleged shortcomings that the main drivers in my opinion are two: first, a much better utilization and second the ability for new suppliers to enter the market.

I recently spoke with a taxi driver (yes, I still take taxis occasionally) and asked him about the average waiting time for taxis at Frankfurt airport. It’s an astonishing 2.5 to 3 hours. If we assume that an average ride is about 30 minutes that means that a driver and his vehicle may spend 80% of the time idling.

By the way, even taxi drivers are benefitting from technological advances. Apps such as MyTaxi make the independent of the radio taxi centrals that charge hefty monthly subscription fees.

Note that I’m not arguing in favor of a particular company here and that I’m not condoning recent privacy violations at Uber. Also, there are many details that need to be ironed out: how to ensure that drivers and other new service providers pay taxes, how to ensure car safety etc. At the same time, it’s time to relieve taxis from some of the most onerous and outdated requirements.

We are seeing a paradigm shift and this shift is for the better. More freedom for everybody (including taxi drivers) and more competition. That would be good for everybody: consumers, service providers and the environment.

CC BY-ND 4.0 The Sharing Economy – Why I’m a Fan by Matthias Catón is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.

By | 2016-10-14T16:54:22+00:00 7 May 2015|Categories: Public Affairs|Tags: , , |