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Tech, Transport, Tourism, Transformation -- What To Know About The Sharing Economy In Africa

If harnessed responsibly, the sharing economy has the potential to benefit more people in more ways than almost any other economic model in recent history.

03/03/2017 05:03 SAST | Updated 03/03/2017 06:22 SAST
April Rinne

South Africa has a long tradition of approaching, adopting and even leapfrogging innovations in its own unique way. The digital economy provides ample examples of this already, from financial services like Jumo and payment systems like Snapscan, to healthcare and civic activism. The emerging sharing economy should be no different. In fact, if harnessed responsibly, the sharing economy has the potential to benefit more people in more ways than almost any other economic model in recent history.

But first, what exactly is the sharing economy? In short, it is an economy based on "access over ownership" and decentralised networks of people connected through new technologies. It's a way to use under-utilised (or idling) assets more efficiently and sustainably, while fostering relationships and more flexible lifestyles. It includes a wide range of activities, from transportation (carsharing, ridesharing) to homesharing, to sharing co-working spaces, to on-demand skills-sharing platforms, and so much more. The sharing economy is not a panacea (more on that below), nor a one-size-fits-all solution; however, it continues to outpace the "traditional" economy in terms of growth and investment, it now touches almost every aspect of daily life, and it's expanding rapidly to serve individuals, businesses and society alike.

Given that context, let's consider South Africa, and Africa more broadly. This land of contradictions, challenges, and change, is in the midst of an unprecedented Millennium. The population is set to double by 2050 (to 2.4 billion people from 1.2 billion today). The majority of urbanisation globally will take place here. And thanks to high fertility rates, it has among the youngest populations on earth (26 years for South Africa, 19.5 years for the continent). Against this backdrop, how do youth thrive in such a future? How do cities grow sustainably and yet remain happy, healthy places to live? How do both public and private stakeholders rethink partnership opportunities and scale grassroots solutions? And, to borrow a metaphor from entrepreneurship, how do local policy makers effectively guide this rocket ship that's gaining altitude so fast?

I have had the honour of working across Africa for the past 15+ years. I spent more than a decade focused on microfinance and enabling access to essential goods and services, at the base of the economic pyramid: water and sanitation, education, healthcare and clean energy. As part of this I advised on policy and legislative reform, witnessed the birth of mobile banking (and, by and large, a smart, light-touch regulatory approach to it), and met scores of extraordinary social entrepreneurs. My personal and professional experiences there set a high bar for what can happen when people, guided by limited resources and fierce determination for a brighter tomorrow, come together to rethink what's possible.

About five years ago, I went to Rwanda. At the time there were five Airbnb listings in the entire country (all of them in Kigali). I picked one, which turned out to be a classic social enterprise: income earned from homesharing was used to support skills training for girls and to establish the country's first "culinary institute." Today there are some 330 listings in Kigali and many more scattered around the country, providing critical tourist infrastructure in places that previously lacked it, at basically zero cost, creating new livelihoods and revenue streams for locals nationwide, as well as developing the destination in the process.

Needless to say, this phenomenon isn't limited to Rwanda, or South Africa, or any particular location. Gradually, people around the world are beginning to recognise the benefits an "asset light" lifestyle and adapting work, travel and purchasing behaviours as a result. While I fully appreciate that there are big differences between those who already "own" and those who are struggling to get a foot on the financial ladder, sharing economy models can help regardless of one's socioeconomic status. Indeed I have been unable to identify any other business model which offers so many benefits simultaneously:

  • Economically, one can save money and/or earn income (and, I would note, saving an extra few hundred - or even few thousand - Rand is significantly more helpful for a low-income family);
  • Environmentally, sharing rather than owning is more sustainable consumption;
  • Practically, accessing rather than owning enables greater choice; and
  • Socially, one can meet new people and forge new relationships.

Just as individuals are gradually starting to figure this out, so too are cities. In my work advising governments, policy makers and public sector stakeholders worldwide, I have come to value both the unique constraints faced by municipalities and the unparalleled benefits that could be reaped. In particular, cities need to recognise that the sharing economy does not automatically mean painful policy reform or unknowns. Rather, when a city applies sharing economy thinking to its own operations, it can actually serve to help reach its own goals.

There are countless examples of cities that are proactively harnessing the sharing economy. Seoul, South Korea has established a Sharing City team within its municipal government and invested public funds in more than 50 local sharing economy initiatives, ranging from clothes to meals, pets and tourist guides. Amsterdam has created an Airbnb-style platform for sharing underutilised city-owned spaces (augmenting its capacity and earning revenues in the process). This means fewer wasted resources, lower overheads, and enhanced sustainability.

Rather than fretting about how to keep hotels open when peak demand passes, we now have an almost infinitely flexible way to expand or contract supply on-demand - with economic benefit directly back to the local community. And last but not least, when one considers that one car put into shared use takes between nine and fifteen cars off the road, many places are reimagining both traffic patterns and CO2 emissions. When one pauses to reflect on these outcomes, it becomes remarkably difficult to see them as "threats" - perhaps to incumbents who are unwilling to innovate, but certainly not for meeting tomorrow's daunting needs.

Turning back to South Africa, one could easily imagine the sharing economy helping to tackle a range of priorities, from urbanisation to tourism development to prospects for youth. It offers a myriad of insights for meeting Sustainable Development Goals (SDGs) and agendas (to be taken up in a later post). We could imagine more localised platforms, a new class of community-led partnerships, and the deepening of "township tourism." In short, the sharing economy could be one of the features that helps make the 21st Century, Africa's Century - if individuals, communities, organisations and the government alike can rise to the occasion.