Zipcar co-founder and former CEO Robin Chase led a spirited discussion during the Global Entrepreneurship Research Network’s (GERN) December conference call, regarding questions raised by the emerging “sharing economy.” Each month, GERN holds a conference call for members to share ideas, explore best practices and hear from leading entrepreneurial professionals.
Chase recently authored Peers Inc., a book that Usman Ahmed, the head of global public policy at PayPal, said is required reading at his company. It describes how the global economy, and perhaps the very nature of capitalism, is being transformed by technology-enabled platforms. The future belongs to those who understand it, and there are few guides better than Robin Chase.
The sharing, or collaborative economy, is being driven by several key realities of our time. One is that we are connected to more people and things than ever before. Another is that inexpensive mobile technology makes it much easier for us to find each other and share things. Internet-enabled technologies such as mobile devices, social networks and peer-to-peer platforms make it possible for creative and visionary entrepreneurs to unlock the power of being connected.
The result, Chase said, is the possibility to leverage excess capacity. The most successful new platforms are those that organize and unleash existing assets –allowing people to obtain what they want or need by locating and connecting with a person who is able to provide it.
Excess capacity can be sliced – so that people only consume what they need – which was one inspiration for ZipCar. Before this platform, cars could be either purchased outright (and, as Chase’s data showed, sit parked 90 percent of the time), or rented by the day. Excess capacity can also be aggregated via a common interface, which is what AirBnB does with spare bedrooms. In just four years, she pointed out, AirBnB is able to offer more rooms (650,000) in more countries (192) than any traditional hotel chain. (InterContinental Hotels Group has been in business for 65 years, and offers 645,000 rooms in 100 countries.) Lastly, excess capacity can be opened, such as the United States’ data.gov platform, which is a boon for researchers.
Collaborative platforms enable startups to grow more quickly, learn faster and deliver smarter products and services. An example Chase pointed to is how Duolingo, through an innovative participatory platform, has learned how to teach languages. Getting the platform right, however, is not easy and requires much experimentation, iteration, adaptation and evolution.
The potential is that we will all benefit from more efficient ways of living and working. But, the rapid change has many wide-ranging and little understood implications. There are many questions for researchers, including whether these rapid developments are channeling entrepreneurial activity into narrow high-tech industries, and if so, how. Researchers are also looking at how these rapid changes are impacting traditional businesses models, and are leaving policymakers in continual catch-up mode.
Ahmed – who has a close-up, insider’s perspective – began the dialogue by asking a set of insightful questions, including:
On Entrepreneurship
- Are there slices of peers (large business, SMEs, micro-entrepreneurs, individuals) and different policy considerations for these slices?
- Are some of these peer entities collaboration/sharing while others are micro entrepreneur?
- Are there distinctions in the type of platform and what it means?
- What are the most transformative types of platforms?
- What do the lower barriers to entry of platform economy mean?
- How do you scale in a platform world?
- Is a platform based world good for entrepreneurship?
- Do gazelles rise in the platform economy?
- Are the platforms the only ones that can become gazelles?
Labor
- Should platforms treat peers as employees, independent contractors, entrepreneurs?
- Should government foot the healthcare and insurance bills for these micro employees?
Legacy Prudential Regulation
- What are the consequences of lower barriers to entry?
- How should peers be subject to legacy licensing, safety, and security regulation?
- Do the private rating systems of platforms obviate the need for the same type of regulation?
Antitrust – Lock in effects are strong on platforms.
- Do platforms enable portability?
- Are platforms picking winners and losers?
Platform Regulation – Ex ante requirements to interoperate, be subject to particularized local privacy and other transparency, reporting, or other requirements like in telecom or financial services arenas.
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