As an entrepreneur you’re looking ahead, yet you also reflect on past events to learn to analyse what has happened, and to adapt your strategy accordingly. When entrepreneurs reflect, why do experts hardly ever follow their example? I’m taking the challenge by reviewing my ‘5 predictions about the Dutch sharing economy in 2016’.
1. ‘Traditional’ companies take the step into the sharing economy
“Traditional (corporate) companies will join in the sharing economy themselves. The automotive industry will be taking the lead. Also corporates like Facebook and Google will join the sharing economy.”
The first steps into the sharing economy by corporates where as expected mainly investment and acquisition based. AccorHotels acquired the high-end Airbnb variant onefinestay.com for about 170 million and directly promised to stimulate the development of the platform with another 70 million.
In the land of mobility, corporates knew to find the start-ups as well. A great way stay current with the newest developments. General Motors, for example, invested 500 million Dollar in Uber rival Lyft. In time, the company wants to use Lyft as a platform for its upcoming self-driving car’s.
Own initiatives were deployed by BMW, among others. The company announced a pilot with 40 self-driving taxis in Munich just before year’s end.
Especially insurers have been exploring their future during this year. A Dutch insurance company, Centraal Beheer, started a pilot by offering insurances for shared cars in late December and OHRA experiments with Clixx: an insurance that allows you to insure your car for a single day for sharing purposes.
The prediction that sharing activities would be started by Facebook and Google has turned out to be mistaken. Only Facebook launched Marketplace this year and Google experimented in ‘ride sharing’ with Waze. Both (still) with minimal impact. And that’s about to stay that way for a while, I expect.
In many segments corporates are clearly not taking the lead, but like BMW’s vice president Klaus Buettner said, “Someone else spent the money to educate the market and then we came in with a cool product. We will not be the largest, but we can be the coolest.”
Question of definition:
However the sharing economy is the most frequently used name for this development, I also see a rise in the the terms ‘collaborative economy’ and ‘(peer2peer) platform economy’. The core of these developments is that individuals find each other through platforms in order to make transactions. In this article I’ll be using both sharing economy (things) and ‘gig economy’ (labour/tasks). To keep this story accessible for the reader, I decided to use sharing economy as an all encompassing term, knowing it might not be the ideal terminology, although it’s most recognizable.
2. Greater supply of sharing platforms
“A huge growth in the number of sharing platforms.”
However the supply in absolute numbers has grown, the growth in number of platforms is disappointing. Especially in segments that are already well represented (accommodation and mobility) fewer companies started. All in all, it seems that the sharing economy market for platforms with serious growth ambitions has been satisfied.
In case new sectors are added, more entrepreneurs are starting at the same time. This year sharing platforms offering storage space launched. In the Netherlands, both Djeepo and Storage Share started at almost the same moment. It was the very same story with Dutch based campervan sharing platforms Camptoo and GoBoony in 2015. See here the complete overview of sharing platforms.
3. Growth through partners and APIs
“Platforms will open their APIs for others, so they may grow faster.”
This prediction can clearly been filed in the category ‘the wish is the father of the thought’. To me, growth through APIs and opening up to others is a reasonable step within the sharing economy. Entrepreneurs still don’t seem to have their business organized well enough to take this step. Many platforms enforce their own market position first, and are only then looking beyond their own abilities. Sharing within the sharing economy is still hard.
4. More on-demand working platforms
“A growth in platforms facilitating (lower educated) labour. Rising discussion about the durability of these kind of platforms.”
However Uber, Helpling and Werkspot made again good progress in 2016, the growth in number of platforms for temporary work in the Netherlands stalled. The growth occurred mainly in the ‘on demand’ delivery of fresh food, where UberEATS, Foodora and Deliveroo launched in a number of larger cities. The battle in the delivery market is turning towards the question, who is not only going to have the digital, but also the physical contact with the customer. This, again, can be seen in the acquisition of the German Resto-in by Takeaway.com just after the change of the year. In the United States, many more similar platforms are active and I noticed a strong growth over the last year. Additionally, the discussion about the inequality of these platforms was stirred.
Laborers are earning less and less in the USA, though platforms offer employees the opportunity to change their fate. 2016 has been the year of ‘platform coops’, i.e. platforms being owned by the people on the job. In Denver, a taxi platform cooperation of about 600 drivers had put together 2.000 USD each to build their own taxi-app. In the meantime the have grown an impressive market share of 34 percent in the region where the cooperation operates.
5. The market will mature
“Platforms can’t hide behind their ‘disruptive’ character any more, and will take their responsibility.”
This prediction has absolutely been fulfilled. Although platforms grew exponentially in their first phase, I noticed a few platforms making choices that impact their short term growth negatively in 2016, this to strengthen their raison d’être on the long run.
For example, Airbnb made agreements with the governments of Amsterdam and London, amongst others. The company programmed local legislation into the platform. According to Financial Times the company hence forfeits a yearly income of about 382 million euro in London only. Calculating these short term losses is a characteristic of thinking short term. In case Airbnb wouldn’t have done so, other measures and legislations would have affected the business anyway. Now they’re working on a solution together, i.e. this step has been essential to the company’s long term raison d’être.
Every well-thinking entrepreneur could have anticipated this move of Airbnb. Under the cover of disruption and innovation, platforms like Airbnb were able to grow rapidly in a very short time, also due to the confusion about legislations, though they knew that the time would come they had to conform to existing rules.
You may also recognize smaller platforms that use the hard lessons large pioneers like Airbnb have learned. AirdDnd, a platform for home restaurants, proactively offered a legislative proposal in order to direct the discussion with the status quo into a manageable environment from the very beginning.
Additionally, public authorities are taking the sharing economy more and more serious. Last year I’ve been speaking with Dutch institutions like the The Social and Economic Council of the Netherlands (SER), Netherlands Bureau for Economic Policy Analysis (CPB) and the Dutch Ministry of Finance about the impact of this development. It truly seems that the sharing economy is maturing and that offers a more durable perspective for the future.