Sharing Economy, Shared Innovation

July 20, 2018

The sharing economy, born as an answer to the deep crisis that struck the global economy in 2008, is today the symbol and the fulcrum of a consumer revolution that starts from the millennials, the ambassadors of a lifestyle based on experience and no longer on possession. From Uber to Airbnb, the world of shared goods and services has witnessed the emergence of 195 new entrepreneurial realities in the last 5 years, capable not only of responding in an innovative way to the changed needs of society, but of profoundly influencing their habits.

Among the phenomena of the moment, the free-flow bicycles are growing increasingly popularpopular, combining the latest Internet of Things technologies with innovative business models. A new way of understanding urban transport with surprising implications, where nothing, from the impact on the environment to the methods of financing, is as it appears.

 

SHARING ECONOMY. THE VALUE OF THE EXPERIENCE

“Use it only if and when you need it”, it seems to be the slogan of the new generations strongly influenced by the digital world, but also by the financial insecurity and limited spending possibilities. Therefore, objects become only the physical means of accessing the true desired good, the experience.

The sharing economy, made famous by the success of companies such as Uber, Airbnb, BlaBlaCar or Foodora, is a term that comes in various modes of delivery: gig economy, on demand services, peer to peer economy, pooling economy, etc. All with a single purpose, to allow as many people as possible to use a good or service, reducing the costs to a minimum.

40% of startups born from the sharing model, operates in the field of tangible assets, with vehicles, objects and spaces that make up 95% of the offer. Among the intangible assets, on-demand skills stand out at 39%, deliveries at 24% and transport at 13%. Despite the objectives and the direction seem clear and consolidated, the sharing economy is in full evolution and opens unimaginable business scenarios even for the most established companies of the ‘old’ economy. In March 2018, for example, the Italian energy giant Eni launched Enjoy Cargo, the first free-floating service for goods transportation, providing the first fifty vans in Turin, Rome and Milan.

According to Rachel Botsman, collaborative economics guru and author of the book ‘What’s mine is yours, the revolution of collaborative economy’, the revolution concerns above all the relationships between people and a fundamental element of their interaction: trust. Once the latter was all about the personal security in the approach with strangers while today, with the various feedback and rating systems, it travels on completely different tracks. You wouldn’t feel too uncomfortable by leaving a hotel room untidy, for example, while as an Airbnb guest it would become of primary importance for you to be perceived well enough to keep high the overall rating of your profile. “Online trust will change our behavior in the real world, it will make us more responsible in ways we can not even imagine,” says Botsman.

An ancient phenomenon, that of sharing, which in the digital age poses a new problem of rules and responsibilities. As evidenced by the Uber case and by the revolt of the taxi drivers, the new business models require a timely adjustment of the laws. Undoubtedly, the sharing economy offers greater opportunities for those on the margins of the job market, but at the same time it risks creating a gray area for taxation, workers’ protection and transparency on the management of data and user privacy.

 

THE BOOM OF SHARED BIKES. THE IoT UNLOCKS MOBILITY

They are orange and just over a month ago have invaded the streets of Bologna. After Florence, Milan, Turin, Bergamo, Pesaro, Mantua and Reggio Emilia, the shared bikes of Mobike, a Chinese company operating in 160 cities, have also collected the favors of the capital of the Emilia-Romagna region. In the first ten days since their debut, 80,000 kilometers have been covered and 38,500 trips have been made.

Bike sharing, actually, is not in itself a novelty. It was 1965 when Luud Schimmepennik, an exponent of the Dutch anarchist group of the Provo, had a revolutionary idea: fighting consumerism and defending the environment with thousands of free bikes for everyone. In the 1990s, the first urban rental stations were born with alternating success, till finally arriving today to 18 million bikes shared  in 1,608 cities.

Also in this case, the drive towards success also comes from technological innovation that, together with the ability of managers and entrepreneurs to intercept the potential of the Internet of Things, has eliminated the most obvious disadvantages of the old rental service. According to data from the Italian National Observatory on Sharing Mobility, at the end of 2017 the world market was already worth 1.5 billion dollars, and in 2019 it will reach 3.5 billion. The biggest market is the Chinese one, while Italy is in 4th place worldwide.

The revolution brought by Mobike and Ofo, another giant in the industry with 100 million users in 170 cities and 9 countries, is constituted by the ‘free floating’ system combined with the smart lock. Bicycles, equipped with a geolocalizer, can be unlocked with an app and left anywhere in the area defined by the operator. The capillarity of the service also reaches the suburbs and the payment no longer requires cards and subscriptions, but is charged based on actual consumption. Mobike and Ofo were able to respond to the need for a slimmer and faster user experience thanks to the NB-IoT (narrowband Internet of Things) solutions, which ensure strong coverage even in areas with weak signal. The payment time has fallen from 25 to 5 seconds and the GPS has eliminated the installation costs of the racks. The technology has also optimized the life cycle of the battery, extended now from 2 months to 2 years, while the smart locks collect information on the state of the bike, further reducing maintenance costs. All this was possible thanks to the collaboration with China Telecom and Huaweii for Ofo and the partnership with Ericsonn and China Mobile Group Shanghai in the case of Mobike.

 

BEYOND BIKE SHARING. THE DATA ECONOMY

Although bike sharing is naturally associated with sustainability and environmental protection, studies have shown that it is an inefficient tool to reduce smog and traffic in the city. Shared bikes rarely replace cars, as they are mostly used instead of public transport and walking routes. On the contrary, since it is no longer necessary to bring the bikes to the appropriate racks, both in China and in Europe have been found mountains of abandoned or vandalized bikes. In addition, the night vans used to redistribute the bikes eventually add smog to the already polluted air of the cities.

The ecological motivation failed, and considering that without public or private funding the service is not economically sustainable, one wonders what is the reason that pushes the Municipalities, but also the giants of the global market, to invest in bike sharing. The answer, as is increasingly the case in the 4.0 economy, is to be found in the data.

The bike sharing is actually a live forecast of the transport of the future and a veritable mine of data on the behavior of the cyclists in the city. It is no coincidence that the giant of online retail Alibaba has bet on Ofo, while Mobike has been bought by Meituan-Dianping, a giant in the sale of coupons for restaurants and home deliveries. Companies that sell products and services on the web are interested in the tastes and habits of users, in order to send them targeted offers. Thanks to geolocation, a chain of restaurants or a store can send discounts and benefits to cyclists when they pass nearby. To understand the value of these data just think that Ofo and Mobike have raised funding for 1 billion dollars each.

Not only smart transport and smart cities, but also health, food safety, climate and efficient energy management. According to European Commission estimates, the data economy was worth more than 285 billion euros in 2015, or slightly less than 2% of European GDP, and employed 6 million people. With the implementation of political and legislative conditions to encourage investment, the data economy could reach € 793 billion in 2020, 4% of GDP and employing 7.4 million people.

 

PRIVACY, ENVIRONMENT AND HEALTH. THE CHALLENGES OF SHARING

The sharing economy, born as a reaction to the changes in the global economy, is now in a position to model it itself, by posing new challenges and opportunities to the attention of specialists in the most innovative and rapidly growing sectors of the moment.

The undisputed success of the new model of bike sharing demonstrates how the spread of the Internet of Things puts businesses, even the most traditional ones, in front of infinite possibilities of integration between the material and the digital world and, consequently, makes possible the creation of new and more efficient services that are closer to consumer needs.

Technology will most likely also be the answer to environmental issues, with softwares developed specifically to stop the service only when the user has put away an object in the most correct way, without damage to the environment. Furthermore, digital innovation can also act as an incentive to recruit new users and promote a healthier lifestyle. The bike sharing company oBike, for example, makes its users earn the oCoins, a cryptocurrency that can be used to buy videos or songs.

In an economy where the true value is the data, the specialists of cyber security will be called to develop new solutions that can guarantee the same trust that underlies the new business models of sharing. The General Data Protection Regulation (GDPR), which has been in force in the EU since last 25 May, does not cover the access and transfer of non-personal data, which leaves room for concerns about the transparency and security of the use of the data generated from the various forms of sharing. In the specific case of bike sharing, privacy and security can also be violated through the application necessary to unlock the bikes, which is able to provide real-time information on the position and movements of the users themselves.


 

For those who want to become an active part of the change and acquire a managerial approach to the challenges proposed by the sharing economy, Bologna Business School offers programs designed to provide highly specialized training and bring innovation at the center of strategic decisions of companies and organizations:
Master in Data Science
• Master in Digital Tecnology Management: Digital Project Management, Cyber Security, Artificial Intelligence
Master in Internet of Things
• Master in Business Management / Green Management and Sustainable Businesses




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