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Will we fear or embrace the sharing economy?
Despite the futuristic design of Toronto’s city hall, councilors demonstrated in recent days that the future is firmly on hold after voting to delay regulatory changes that would pave the way for Uber and traditional taxi services to co-exist.
As in cities all over the world, Toronto is grappling with the challenge posed by sharing economy players –like Uber. The ride sharing technology platform that links drivers with riders now finds itself effectively outlawed after city council voted to close loopholes that had left it exempt from bylaws regulating the taxi industry.
Conflict between the city’s cab industry and the upstart tech giant is not going to go away. Following the vote, Uber representatives vowed to keep the service going confident that with 17,000 daily riders it is the future.
Indeed, upholding the law will be virtually impossible. The cab industry’s short-term win will not hold back the tide of innovation that companies like Uber represent. Consumers are increasingly choosing to share, borrow or reuse goods rather than buy or own them.
A report by PwC noted that while the Great Recession is over the values that emerged during it seem to be staying put. Many consumers, particularly young people, are rethinking the necessity of ownership. PwC estimates global revenue from the sharing economy will be $15 billion in 2015 with the sector expected to reach revenues of $335 billion by 2025.
The Ontario Chamber of Commerce found that 45 per cent of Canadians are willing to rent their belongings to others and 40 per cent of those aged 18 to 34 participate regularly in the sharing economy. Consider there are 12,000 Autoshare members in Toronto, while Canadian Airbnb hosts average 52 nights booked annually.
Already these companies have become recognizable household names – and there are many more emerging. Their business models are changing the way consumers think about value and threaten disruption far beyond the taxi industry. The question that concerns us all is whether regulators and established players will embrace the change or seek to stifle it.
Governments have always had difficulty creating regulations that keep up with the pace of technological innovation. In order to find a way forward, stakeholders need to work together to transform today’s threat into tomorrow’s opportunity.
What’s at stake is the very economic progress promised by information and digital technologies. As the Ontario Chamber of Commerce noted, “those jurisdictions that recognize the sharing economy as an opportunity will build regulatory and taxation frameworks that support innovation.”
Those are also the jurisdictions that will reap the rewards.
Is there room for the sharing economy? Do we have a choice?
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Posted with permission.
About the author
Tracey White is a negotiator, mediator and coach who specializes in strategic planning, execution, business operations, and analysis. She combines conceptual business acumen with a focus on metrics and data analysis to support evidence-based decision-making, planning and priority setting. Her strengths include Enterprise Project
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