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What Makes a City Suitable For a Sharing Economy?

The Sharing Economy has been a hot topic lately. However, we seem to hear about it most in light of controversy, and particularly in regards to Uber. Protests led by angry taxi drivers have raged in dozens of major cities, such Toronto, Bogota and Paris, in recent months. The Sharing Economy isn’t always welcomed into cities with open arms.

But while some cities have battled it, especially in Colombia, others like Seoul and Amsterdam have embraced the Sharing Economy. Through providing funding for startups in the space, as well as offering other initiatives, Seoul is one city that has taken strides to position itself as a global leader.

So where is the Sharing Economy causing tensions? And why are some cities choosing to support its growth instead?

When the Sharing Economy Isn’t Welcome

The Sharing Economy is based on access instead of ownership. It enables people to connect through technology and share with each other.

The global Sharing Economy is worth $15 billion USD, but it’s expected to soar to $335 billion USD by 2025, according to PwC. There’s thousands of new startups and companies emerging in the space–including TaskRabbit for chores, Lending Club for loans and Washio for laundry services.

This inclusive economy may sound appealing to consumers, but the industries it’s disrupting are really up in arms—particularly the taxi industry. For months there’s been Anti-Uber protests around the world, in major cities like Paris, London, Brisbane and Sao Paulo. In Toronto, one taxi driver clung onto an Uber car and was dragged down a major city street (although Toronto recently legalized Uber X, regulating the ridesharing option). In Germany, Uber X is actually banned, even though many German car makers are implementing car sharing initiatives.

Bogota, however, is where it seems Uber has been having the most difficulty. This year, there’s been more than 100 violent incidents against Uber drivers and their passengers. Some cab drivers use the Uber app to request a car, only to attack the driver once he or she arrives. In February, Carmen Santos (the daughter of former Colombian Vice President Francisco Santos) was trapped in an Uber car for 40 minutes as angry taxi drivers threw rocks at the vehicle. A month later in March, an anti-Uber protest became violent and protesters were hit by tear gas. Colombia has also fined Uber the equivalent of $140,000 USD for violating the country’s transport legislation, proving that at least in Colombia, the ride-sharing app really isn’t welcome.

The Global Leaders

Despite tensions, most cities support the Sharing Economy. According to a survey conducted by the National League of Cities, 71 percent of the 245 cities surveyed wanted to see it grow. As of 2015, San Francisco and New York City saw the most Sharing Economy startups–together, they boasted 220. London came in third, housing 72 startups in the space.

In the UK, government leaders applaud the movement rather than denounce it. UK Chancellor George Osborne encouraged civil servants to use Sharing Economy companies to book accommodation and transportation to save money. The government also announced it would invest £700,000 in two cities, Manchester and Leeds, in attempt to make the UK a global center for the Sharing Economy.

Seoul has made strides to position itself as a leader in the Sharing Economy, too. Seoul’s Sharing City project was launched out of the city’s Innovation Bureau in 2012. It’s a dense city with 10 million inhabitants—60 percent of which live in apartment buildings. The initiative is working to connect people with sharing solutions, reduce waste, and create a better sense of community.

According to this 2014 Shareable article, the city invested the equivalent of $450,000USD in Sharing Economy companies. The funding resulted in 359 shared parking lots, and a 68% increase in homestays like Airbnb. In the city, 779 building have been opened to the public during idle hours, providing space for people to meet and hold events. There’s about 2000 public WiFi networks, and lending libraries have opened up across the city, allowing people to exchange things like books and tools.

Last year, Amsterdam was named the first ‘Sharing City’ in Europe. The government was the first to regulate Airbnb within the city; it’s now looking to Seoul’s sharing economy platform for further guidance. Amsterdam’s Sharing Economy has more than thirty ambassadors—including Amsterdam Smart City and Amsterdam Public Library—who work together on sharing initiatives. Even more, 84 per cent of city residents surveyed said they were willing to take part in at least one aspect of collaborative consumption, according to Sharing Economy platform shareNL.

What’s the Difference?

Evidently, some cities have taken leadership roles in the Sharing Economy. They look at the bigger picture, providing financial support and infrastructure needed for the economy to succeed. But, why have these cities chosen to embrace the Sharing Economy while others have denounced it?

It’s because they’re more open to innovation.

Take San Francisco, for example. On top of being the global leader in tech-startups, San Francisco boasts the country’s highest minimum wage at $15 per hour, and a city-funded college savings program. The city also has programs like Pavement to Parks, which turns idle city spaces into parks and plazas. In London, former mayor Boris Johnson released his plan for the city in 2012, “2020 Vision: The Greatest City on Earth, Ambitions for London,” outlining the importance of entrepreneurship and the push to be a “smart” city. And entrepreneurial development programs are underway to make the plan come to life. Vancouver has set a mission to become the greenest city in the world by 2020, which has already lead to a 20% decrease in water consumption. Plus, 41% of people walk or bike to get around.

Openness to innovation has been seen as successful in these cities, and this paves the way to forward thinking. So rather than attempting to regulate companies in the Sharing Economy space, the cities are finding ways to work with them in order push their city culture higher up the innovation ladder. As more startups and governments pave a communal path towards a successful Sharing Economy, others in less innovative ecosystems will look on and want to share in their success, too.

Nooshin Mohtashami is the founder of Lendogram, a sharing platform for friends.

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