Why Urban Sharing is a Better Model for Cities

Why shared urban infrastructure, not the sharing economy, is a more effective long-term model.

Over the past decade, digital technology has transformed social interaction and shifted global economics in ways that are still being defined and understood. For better or worse, one of the most significant disruptions has been the introduction of the so-called sharing economy, a marketplace based on online peer-to-peer transactions. When they both launched in 2008, popular web-based sharing platforms like Airbnb and Uber (considered to be quintessential brands of the sharing economy) seemed to introduce a new kind of community-friendly, resource-sustainable model where owned properties could be utilized more efficiently. Customers could have alternative (and possibly better, cheaper) options for goods and services with the click of a mouse or, these days, the swipe of a finger.

As a broader concept, the idea of sharing existing resources makes fantastic sense; according to this comprehensive Brookings article, transportation economist Donald Shoup has shown that most privately-owned vehicles are parked for around 95% percent of their lifetime. That’s a massive underutilization of resources, and a huge problem for growing urban areas that are literally running out of space. That’s why these brands — and their “sharing” label — have resonated deeply with the modern consumer, made clear from the massive growth and valuations seen by both companies. If you own a car, why not offer an empty seat when it does get driven? The driver earns a little extra, and sharing the existing cars in cities means freeing up space and preventing resource waste — in theory.

But while these platforms may have started with different intentions, the obvious opportunity for earning has since polluted the model. In a recent article from CityMag titled “The Sharing Economy is a Lie,” author Farrin Foster writes, “People are buying Uber-compliant cars just to be able to drive for the company to try to make a living. They’re not sharing resources they already have…And Airbnb can — in some cases — encourage people to buy up investment properties and rent them out at sky-high rates.”

Julian Agyeman, urban studies scholar at Tufts University agrees, saying in this Grist article, “There’s a problem with the sharing economy…while useful in some ways, the concept of a ‘sharing economy’ limits this very human value — sharing — to an economic transaction.” Thus, the sharing economy, also called the “access economy” or “collaborative consumption,” is becoming increasingly capitalized-upon, as these platforms deviate from their original message of friendly symbiosis to become something far more commercial. This affects the brand identities, too; Airbnb’s dreamy, Instagram-filtered aesthetic promises a more “authentic” travel experience, but the reality has often come to mean booking an apartment where no local person actually lives, and which has a good chance of having the same curated-for-travelers look whether you’re in San Francisco or Paris. It’s fine, but it’s often not shared any more than a hotel room is shared; attaching the word “sharing” to this type of transaction is misleading to the consumer.

“It started out being about sharing, and very quickly turned into something else,” says Urban Infrastructure Partner (UIP)’s CEO Axel Bentsen. “The business model is just too good for those who focus on the prospect of it. Airbnb is not about you letting someone stay on your couch anymore. It’s about some super-styled place used only for Airbnb, in many cases. And Uber has turned into a different and better way of doing taxis. If people see that the incentives are good enough, they’ll buy more stuff and share that instead, and keep their original thing. It’s not about sharing anymore.”

If these platforms are encouraging users to acquire more goods and properties instead of fewer, then their continued growth in cities, rather than providing solutions, is actually contributing to urban crowding and congestion. Moreover, these traditional examples (Airbnb and Uber) have caused other problems in cities, seen and unforeseen, for businesses, individuals, and policymakers. Along with obvious grievances by hotels, taxi drivers, and landlords, there are other, more complex issues at play. Cases of discrimination have made these platforms an unfriendly space for some minority customers. There’s also examples of questionable working conditions, as discussed in this op-ed from the New York Times, and ambiguous models of accountability, which often rely on ratings systems and user feedback rather than public regulation. As these brands continue to penetrate the global marketplace, all of these operational issues can only become more problematic.

As a technology-driven operator of shared urban resources, UIP also believes in sharing, but with a bigger picture perspective and a clearer focus — to provide tangible solutions for operating long-term shared infrastructure. According to the Brookings article, “in the broadest sense, the sharing economy represents a transformation of products, once bought outright by consumers, into services that can be accessed on demand.” In this sense, UIP is applying this concept more accurately, by reducing the number of personally-owned goods, and providing services that benefit everyone, including the cities themselves. The key difference then lies in the ultimate purpose of sharing. “Something like a bike sharing scheme is actually shared infrastructure. A city bike is no one’s bike,” says Bentsen.

UIP’s Product Manager Geir Arne Brevik agrees. “A city bike experience is a shared experience, but it’s an owned set of assets, making it more like public transport. You don’t want to trash the bus or the tram, because you know that it’s only hurting everyone, and that’s kind of the same thing with the bikes…because it’s everyone’s bike.” In other words, shared mobility platforms like bike or car sharing are built for everyone, and shared by everyone. Without the option for individual ownership and monetary gain, the resources are always accessible, and genuinely shared.

Foster sums up in her article by writing, “The sharing economy is lying to us…nothing built around money is ever really about sharing.” While traditional sharing economy platforms like Airbnb and Uber still have their merits and probably are here to stay at least for the immediate future, we must admit that they’re mislabeled, and shouldn’t be confused with models of resource sustainability. They’re very successful commercial enterprises that, like most other trendy brands, will need to work hard to stay relevant.

To properly address urban growth, cities need resource-sharing platforms that are sustainable over the long term, and which fundamentally operate to free up city space and ease urban mobility. “Cities are growing much faster than the population itself, and consequently aren’t able to adapt to the enormous growth that they see in population.” says UIP’s CFO Kristoffer Bøe Henriksen. “We operate shared urban infrastructure that’s much more effectively used because it’s shared. We’re interested in providing people with an effective solution.” To address real problems, it’s time to look beyond trends and buzzwords, and toward establishing a long-term culture of urban sharing.