Antenna for Social Innovation. We Share. Who Wins: unravelling the controversies of the collaborative economy

We share. Who Wins?

MAY 2016

AUThors

Heloise BucklAnd

estHer VAl

dAVid Murillo

unrAVelling tHe controVersies of tHe collABorAtiVe econoMY

isBn 978-84-608-7969-5

ParT 1: The CoLLaBoraTiVe eConoMY

1.1 setting tHe scene

1.2 unrAVelling tHe controVersies

1.3 MArket controVersies

1.4 goVernMent controVersies

1.5 Workers’ controVersies

1.6 citizens’ controVersies

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ParT 2: BLaBLaCar

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ParT 3: 10 exaMPLes of soCiaL innoVaTion froM The CoLLaBoraTiVe eConoMY

3.1 cHegg

3.2 etsY

3.3 freegle

3.4 kickstArter

3.5 lA rucHe Qui dit oui

3.6 PeerBY

3.7 refugees WelcoMe

3.8 sHAretriBe

3.9 sociAlcAr

3.10 VAndeBron

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ParT 4: finaL refLeCTions

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2.1 sociAl iMPAct

2.2 finAnciAl sustAinABilitY

2.3 innoVAtion tYPe

2.4 cross-sector collABorAtion

2.5 scAlABilitY And rePlicABilitY

references

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references

Annex 1:

stAkeHolders interVieWed

for BlABlAcAr

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73

05

INTRODUCTION

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In this fourth edition of the Antenna for Social Innovation, we discuss one of the most fascinating and controversial economic transformations: the growth of the collaborative economy. This transformation has been accompanied by a series of events that is destined to revolutionise our societies – namely, the expan-sion of the Internet, as well as the rise of smartphones, social networks, advances in artificial intelligence, and the capacity to instantly process huge amounts of information at a tiny cost. We talk about societies in a broad sense because the new wave of developments in the digital economy will transform the economic sphere of our lives – as well as the workplace, tax system, ed-ucational models, consumption patterns, and communications. We face profound change.

As we are talking about disruptive innovation, and a set of in-novations with similar characteristics, we must also discuss the less friendly side of these innovations. This is the starting point for this Antenna and to which we dedicate considerable space. We note that the early and worthy declarations regarding the collaborative economy emphasised its horizontal, humanist, democratic, and environmentally-friendly character. However, we now see a widening gap between those initial ambitions and subsequent developments. It must be remembered that all of this has happened in just five or six years.

It is appropriate that a document that is both academic and informative – such as the Antenna – participates in this discus-sion. We approach current debates on the collaborative econo-my without preconceived ideas or premature assumptions, and intend to determine if the collaborative movement is an ally or an obstacle for the aims of social innovation. We want to es-tablish to what extent the collaborative economy can generate innovations whose ultimate recipient is the whole of society, and aim to convincingly explain the impact from a social perspective.

In this Antenna, we revisit this area of innovation with the five variables we used in previous editions. This means focusing on: social impact; economic sustainability; type of collaboration established with other agents operating in the environment; and the characteristics of innovation – such as scalability and replicability. The collaborative economy shows positive results for many of these measurements. However, there are grey ar-eas: particularly when we look at who takes most of the profit of ‘sharing’. The results are also less clear than expected when we analyse the impacts on environment and labour. And when we

examine the model of governance, we find the early horizontal and democratic promise is unfulfilled, and that reality reveals an operating structure that is hierarchical, opaque, and seemingly arbitrary.

Books by Morozov1 or Slee2 have recently opened our eyes. There are plenty of socially beneficial enterprises being developed as part of the collaborative economy, but the term has also been misused by some; while others have parasitically exploited al-truistic and confidence generating initiatives. The concept has also been cited by those with a purely capitalist interest and no inclination to promote the social good.

We start with a reading of the critical and demystifying literature produced around the collaborative economy. We emphasise the progress made, but also the unresolved disputes and debates that should be studied in depth. Our case study features a Eu-ropean company at the spearhead of the collaborative economy, the French BlaBlaCar, a pioneer in the field of new mobility and often mentioned in relevant discussions.

Finally, as has been customary in previous Antennas, we pres-ent ten initiatives in the form of mini-cases (some in a nascent state) that offer clues about how the collaborative economy can advance in light of the five variables mentioned. The final point is also where we began: unless the social impact of the analysed innovations is emphasised, the collaborative economy will become increasingly distanced from the initial liberational, horizontal, and ecological promises. If we begin calling things by their name, then perhaps we can still rescue for social innovation the good name of the collaborative economy.

Sant Cugat del Vallès May 2016

1 Morozov, E. (2013). To Save Everything, Click Here. The Folly of Technological Solutionism. PublicAffairs.

2 Slee, T. (2015). What’s Yours Is Mine: Against the Sharing Economy. OR Books. New York and London.

tHe collABorAtiVe econoMY

7

Before delving into the complexities and unravelling the contro-versies behind the collaborative economy, we take a step back to observe how the definitions of this emerging space have evolved over recent years. We then present a brief history of the collaborative economy from the birth of the term “collaborative consumption” in the 1980s to the current regulatory wrangles we are witnessing in 2016. As a final scene-setter we share a couple of useful frameworks that unpack some of the techy jar-gon that underpins the collaborative economy and help give an overall picture of the different types of activity across sectors.

Evolving definitions

The collaborative economy is made up of a rich and diverse arena of technologically supported systems, platforms and networks that enable individuals to share access to assets, resources, time and skills, and to exchange services, in ways that are faster and cheaper than ever before, and that today are being executed on an unprecedented scale. For the 40% of the world’s population who have access to the Internet, the collaborative economy represents a radically different set of options for the way we live, work, bank and consume.

In 2015 Rachel Botsman described the collaborative economy as “the macro paradigm shift the 21st century will become renowned for” and PWC estimated that by 2025 the five main sectors of the collaborative economy could generate global revenues of $335 billion (with peer-to-peer finance and online staffing growing quickest of all) (PWC 2015).3 In 2015 the European Commission launched the first international consultation on the collaborative economy,4 and in the same year the European Collaborative Economy Forum was formed by a group of collaborative economy companies across Europe to facilitate dialogue between policy makers and business.5 In the US, the Federal Trade Commission has organised workshops to discuss competition, consumer protection and regulation issues arising in this new economic landscape. In 2015 the UK Government set out objectives in the national budget to facilitate a related concept, the sharing economy, with the aim of making Britain the “best place in the world to start, invest in, and grow a business, including through a package of measures to help unlock the potential of the sharing economy” (HM Treasury 2015). There is no doubt: this is big, and actors from across civil society, business and government are all taking part.

In the following pages we decipher some of the key evolutions around the terminology and concepts used.

From collaborative consumption to the collaborative economy

Rachel Botsman’s highly acclaimed book What’s Mine Is Yours6

brought the concept of collaborative consumption into the spot-light in 2010 by outlining three different economic models: 1) redistribution markets for unwanted or underused goods, where Ebay led the way in the 90s; 2) product to service systems where the boom in car-sharing is one of the clearest examples; and 3) collaborative lifestyles which include the exchange of any non-product asset such as time, skills and finance. The idea of idling capacity (the term used to describe the untapped social, economic and environmental value of underused assets) was one of the key underpinning concepts behind collaborative consumption and this has translated into a cultural shift away from ownership to access, particularly popular for millennials.

Since the introduction of this early definition, the convergence of in-creased internet and smartphone access with the economic crisis has resulted in a much broader phenomenon that extends to other economic areas, namely production, finance and education—in short, what is now described as the collaborative economy—where disruption of traditional models occurs across the board.

Production models are evolving with the proliferation of open-source platforms and collaborative maker’s spaces with 3D printers and other technologies enabling citizens to co-design and co-create independently from large corporations. Collabo-rative finance follows a similar trend, where we observe a shift of power and trust away from large traditional financial institu-tions towards individuals and groups that come together either through online platforms or in person. The global crowdfunding market was estimated to have a value of $34.4 billion in 2015 (Massolution 2015) and peer-to-peer lending platforms have also seen exponential growth in recent years. The education sector is also witnessing major disruption as the increasing popularity of MOOCs and peer-to-peer learning platforms is radically changing access to education.

3 The five key growth sectors are peer-to-peer finance, online staffing, peer-to-peer accommodation, car-sharing and music and video streaming.

4 Public consultation on the regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy, as part of the Digital Agenda for Europe. For more information see: https://ec.europa.eu/digital-agenda

5 For more information see: http://eucolab.delanyco.com/

6 Concept hailed by TIME Magazine as one of the “10 Ideas that Will Change the World”. Botsman’s TED talks on the topic have been viewed more than two million times. In 2015 she designed the world’s first MBA course on the collaborative economy, which she taught at Oxford University’s Saïd School of Business.

1.1 Setting the Scene

We share. Who Wins? Unravelling the controversies of the collaborative economy

Advocates of the collaborative economy describe it as “systems that unlock value from underused assets by matching ‘needs’ and ‘haves’ in ways that bypass traditional intermediaries and distribution channels” (Botsman 2015) with idle capacity, crit-ical mass, trust, community and the concept of disinterme-diation identified as the key underlying principles (see Figure 1). However, the growing diversity of the sector (from the free, no-money-exchanged systems such as couch surfing to bil-lion-dollar enterprises like Airbnb, Uber, Lyft etc.) means that for some the concept of the collaborative economy is beginning to fall short as a common denominator. Spain’s CEO of Airbnb recently stated that while the term was a good way of describ-ing the sector, “it is now becoming outdated as within this huge playing field there are many niches that now form their own cat-egories. Airbnb is hugely different from Uber or BlaBlacar, both in ways of working and in organisational models” (Serrano 2015).

Figure 1. “The complete picture”: Categorizing the collaborative economy.

collABorAtiVe finAnce collABorAtiVe consuMPtion

(Zopa, Kickstarter, Pave)

B2B B2C P2P

•Collaborative lifestyles •Product service systems •Redistribution markets

(Airbnb, Etsy, Lyft)

collABorAtiVe educAtion collABorAtiVe Production

(Coursera, Skillshare, Chegg) (Techshop, Fablabs, Quirky)

Source: Adapted from Botsman 2015.

The debate on sharing definitions

In parallel to the consolidation of the concept of the collaborative economy, the idea of the sharing economy is more popular in certain countries. This is the case for the UK, where the concept has gained political support; “it allows people to share property, resources, time and skills across online platforms (…) to unlock previously unused or underused assets” (Wosskow 2014). As noted above, the UK Government has allocated a budget to the sharing economy with several regulatory adaptations and initiatives already underway to facilitate these activities. These include new rules to allow individuals to sublet rooms and allow local governments to use sharing platforms to book transport and accommodation, the digitalisation of criminal record checks as well as a national platform for sharing government spaces. In addition two pilot initiatives will be carried out in Leeds and Manchester to facilitate sharing across transport, space, health and social care. Sharing economy trade associations are also starting to appear; in the UK and Spain the trade associations use this term to encompass the emerging sector of organised

networks where participants rent, lend, trade, barter and swap goods, services, space or money.

The concept of sharing has generated both academic interest and criticism Hellwig (2015) has defined two types of sharing: “shar-ing in,” the type of sharing that we do with what he describes as the extended self, i.e. family, close friends and relations; and “sharing out,” which we are happy to do with strangers. He con-cludes that the personal value we assign to different assets will affect sharing behaviour. For example, objects that tend to have a high personal value and attachment, such as a laptop, will only be used for sharing in, whereas a hand drill is more likely to be put onto a sharing out type of platform. In the case of cars and flats, those individuals who have less emotional attachments to these resources are more likely to share them out. Critics of the concept have questioned the use of the concept “sharing” to describe an economic activity. After all, if you’re paying for something, is it really sharing? And more fierce opposition has described the sharing economy as “a triumph of public relations artistry” (Taylor 2015).

From the access to on demand economy

One of the more pragmatic terms is the access economy, which has been described as “people coordinating the acquisition and distribution of a resource for a fee or other compensation” (Belk 2014). This term has received less criticism as it is void of the ethics associated with sharing and the connotations of living in a global connected village and sharing common resources, which formed part of the discourse of the early advocates of collaborative consumption. The recent disruption in the automo-bile sector is a good example of the access economy, whereby the motivations of established players to acquire relatively new car-sharing services is a clear response to the economic oppor-tunity presented by the efficiency and cost benefits of shifting from ownership to access, “a new age where underutilized assets become peer to peer services for hire” (Cusumano 2015).

As economic activity in this space grows, definitions are be-coming more precise and many of the companies operating in this space are simply described as “new software platforms that allow service providers and consumers to interact without costly intermediaries” (Edelman 2015). Edelman describes the key components of these new software platforms as the provision of information about service providers (e.g. taxi drivers) and services offered (e.g. short term rental properties), an online payment system, reputation mechanisms about service providers and users, and finally, assistance with dispute resolution. Figure 2 illustrates the different layers of technology that enable the collaborative economy to function.

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Figure 2. Collaborative Economy Technology Stack

sHAreABle resources lAYer Marketplace listings, Digital signals

deVice And APPlicAtion lAYer Apps, Smart devices, Digital payments

deVeloPer lAYerData formats, Software Development Kids (SDK), Application Programming Interface (API)

trust lAYer Reputation, Ratings, Social logins

dAtA lAYerCustomer relationship management, Big data analytics, Cloud computing, Inventory management

Source: Adapted from Collaborative Economy Technology Stack Version 1.0 (Crowdcompanies)

As the software platforms providing peer-to-peer services grow exponentially and smartphones become ever more sophisticat-ed, we are now witnessing a very different kind of interaction between users of the collaborative economy. A far cry from the community sharing philosophy behind lending your neighbour a hand drill or participating in a local time bank, the on-demand economy which instantly matches buyers and sellers to deliv-er goods and services immediately describes the fast, profes-sional, app-based services to deliver holiday rentals, transport, micro-tasks or goods. “Mobile-enabled, on-demand, customised products and services are becoming the new normal” (Owyang & Samuel 2015). In this context it is no longer so relevant to have a personal connection with the person with whom you are exchanging access to an asset, but rather how much it costs, how convenient the delivery service is and the brand of the plat-form. To support the on-demand economy there is a subcategory described as the gig economy where traditional company jobs are broken up into individual gigs where independent workers are paid to do a specific task.

Given the fast pace of technological growth and the breadth of activity that spans the realm of peer-to-peer services, new software platforms, the Maker movement, crowdfunding, peer lending and collaborative education it is unsurprising that there is little consensus around the definitions except for widespread agreement that they will continue to evolve. In this publication we have chosen to use the term collaborative economy for sev-eral reasons. Firstly, it is the most established term to date both from advocates and critics, it does not bring up the ethical questions the shared economy faces and it is not restricted to one particular type of activity such as the access or on-demand economy (which excludes some of the more community oriented, long-term service-based platforms).

As a final scene setter, in Table 1 we illustrate the sectors with most activity, namely transport, space and finance followed by goods, learning, services, and logistics. Today there are 17 companies valued at a billion dollars or more operating in this space, 8 of which are based in California and 12 in the US. To date there are no billion-dollar companies operating in the fields of health, food, corporate, utilities and municipal sectors which are the remainder of the 12 categories described in the honey-comb model, a visual interpretation of the sector categorised into families, classes and startup organisations (Owyang 2015).

Table 1. The 10 Unicorns of the Collaborative Economy

sector Billion dollar companies7

trAnsPortLyft ($2.5B), Uber ($40B), Ola ($1B), Kuaidi Dache ($8,8B)

sPAceAirbnb ($10B), HomeAway , Wework ($5B)

trust lAYerTransferwise ($1B), Lending Club, Prosper ($1.7B), Funding Circle ($1B),

dAtA lAYer Etsy, Trademe, Ebay

leArning Chegg

serVices Freelancer

logistics Instacart

Source: Adapted from Owyang 2015.

A potted history

While the past five years have witnessed the most growth of the collaborative economy, we illustrate in Table 2 some of the key phases between the time when the term collaborative consump-tion was first coined in 1980 and 2015 when share economy and ride share entered the Oxford dictionary. It is interesting to note recent developments in two key areas of technology: smartphones and global Internet access.

7 The 10 Unicorns of the collaborative economy are those billion dollar companies that are still private.


Table 2. A potted history of the collaborative economy and enabling technologies

YeAr(s) keY PHAses in collABorAtiVe econoMY

inVestMent sMArtPHone usAge

sMArtPHone tecHnologies

internet trAffic

internet Access

1980 Concepts develop: Edgar Cahn creates time banking. Arcus Felson and Jose Speath coin the term collaborative consumption.

15GB/mo8 (1984)

1990-2000 Redistribution markets: Ebay and Craigslist are launched. Napster starts “pirate” culture in the music industry movement. Ownership gives way to streaming services.

50,000 units of Simon Personal Communicator sold (1993)

IBM’s Simon Perso-nal Communicator (1992)

Nokia 9000 (1996)

Ericsson GS88 (1997)

150,500 GB/mo (1995)

1% of world population have access

2000-2005 Peer-to-peer platforms: Freecycle (2003), couchsurfing (2004) and Zopa (2005).

Zopa raises 1$m in venture capital in 2005

738 million mobi-le phone users

ITunes launched 1 billion GB/mo (2005)

1 billion have access

2005-2009 Cloud culture emerges: Economic crisis sees the explosion of cloud and pirate culture and peer-to-peer platforms. Airbnb and Uber launched (2008).

Airbnb secures $600.000 invest-ment in 2009

Only 10% of mo-bile phones sold are smartphones

Nokia, first colour screen (2000), Blackberry (2002), First iPhone (2007), First Android (2008). Apple Store launched

9 billion GB/mo (2009)

2010-2011 Growth in shared access platforms: Rachel Botsman advocates a new economy where reputation, community and shared access are key values. Airbnb reaches 10 million stays.

Airbnb raises $7.2m and Uber $1.25m. $2.700m raised in crowdfunding sector

9,6% of world population with smartphone,

50% of phones sold are smar-tphones

Mobile data traffic is 3 times the size of the entire internet (2011)

20 billion GB/mo

(2011)

2 billion have access

2012 Car-sharing goes global: Myteksi launched in Malaysia, EasyTaxi in Latin America, Olacabs in Mumbai, Lyft in the US. 8 million car-share users in Europe.

15,7% of world population with smartphone (more than 1 billion users)

More than 100,000 apps in Windows Phone Marketpla-ce with 36 billion downloaded in 2012. iPhone 5 launched

26 billion GB/mo

2013 Big money - big business: Forbes estimates the sector at $3.500m. Boat bound (Airbnb for boats) is launched. Avis buys Lyft for $500m.

Lyft secures $60m, Airbnb gets $200m

19,8% of world population with smartphone

33 billion GB/mo

2014 Backlash begins: 30.000 taxi driver strikes against Uber across Europe, NYC state attorney claims 72% of Airbnb stays illegal. European Commission states Uber should meet taxi regulations. BlaBlacar 20m users.

BlaBlacar receives $100m investment

24,5% of world population with smartphone

Smartphones overtake desktop as primary source of di-gital communication

42 billion GB/mo (2.7 billion times higher than in 1984)

3 billion with access in 2010 (40% of world population)

2015 Regulation debate heats up: Lyft loses bid for lawsuit to treat drivers as employees, European Commission launches public consultation on regulatory issues of collaborative economy. Uber launches in its 300th city.

Uber secures $2.8bn, in March Lyft secures $530m and $150m in May

28,2% of world population with smartphone (almost 2 billion users)

Iphone 6 launched 3,25 billion with access. (48% Asia, 22% Ame-ricas, 20% Europe, 10% Africa)

Source: Authors and various sources (Bloomberg, CISCO, Mitchell, InternetLiveS).

8 Gigabytes per month.

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The collaborative economy has seen unprecedented and expo-nential growth over the past five years, disrupting traditional consumption, production, education and finance models on a global scale. These rapid changes have caused backlashes from traditional sectors that struggle to compete with the new players. Governments, consumer associations and citizens alike have also raised concerns. Should Uber operate under the same rules as existing taxi services, should Airbnb hosts pay hotel tax, should TaskRabbit workers receive a minimum wage? Regulatory, fiscal and labour issues are some of the key controversies on the table, however there is also increasing debate about the value distribution of this new billion dollar industry, as well as issues of liability, trust and data protection. Last but not least, and what concerns us most, is whether the collaborative economy is generating a positive social and environmental impact. In this section we unravel some of the controversies that are emerging behind the glamour of this shift from the “me” to “we” heralded at the outset of this new economic era.

The aforementioned controversies are not just hot topics in the press, but are also being examined by governments, consumer associations and international institutions alike. The European Commission is currently undertaking a public consultation on the regulatory environment for software platforms, online in-termediaries, data and cloud computing and the collaborative economy to better understand the social and economic role of these interrelated sectors, emerging market trends, dynamics and business models and will produce a series of guidelines for regulators in 2016. Likewise the UK government commissioned an independent study on the share economy in 2014 and has since proposed actions to deal with issues of trust and identity, insurance, digital inclusion as well as industry representation, proposing a European-wide trade association for the share econ-omy as well as a kite mark for responsible sharing. Finally, in PWC’s recent analysis of the economic potential of the sector two key hurdles were identified: “first, major regulatory and fiscal issues need to be resolved; and second, in scaling up, sharing companies face challenges in maintaining their uniqueness and authenticity” (PWC 2014).

The debate as to whether the collaborative economy is generating positive social value is also ripe from the advocates of this new space, as expressed by the founder of the Ouishare platform: “Often the narrative behind innovation is disruption for the sake of disruption, transformation for the sake of transformation, but there a social vision of these changes is lacking.”

In the following pages we explore some of the controversies that have attracted considerable debate from four different perspec-tives. Firstly, who gets the money in this growing market? What is the value distribution and governance of the software platforms that generate value on the back of the social capital generated by

their users? Secondly, we open the Pandora’s box of regulatory and fiscal issues considering the dilemmas around if, how and when to regulate innovation. Thirdly, we look at the emerging precarious labour market of the micro-entrepreneurs who make the collaborative economy tick, who have been described as “employee-serfs” forgoing security, insurance and protection to serve a transaction based, on-demand economy. We then consider the consumer and the implications of living in an era of hyper-accountability and explore some recent controversies highlighted about the motivations of taking part in the collabo-rative economy. Finally we pose the question as to whether the overall environmental impact is positive or not.

1.2 UnraVeLLing The ConTroVersies

MArket

1. WHo gets tHe MoneY?

2. do tHe users get A slice of tHe cAke?

3. trAditionAl coMPAnies: sHAre or die?

goVernMent

4. in tHe neW “diY culture”: Will tHe stAte retreAt?

5. is sHAring “fAir” for existing coMPAnies?

6. tAxAtion And regulAtion: WHAt sHould goVernMents do?

Workers

7. does it creAte More joBs?

8. Micro-entrePreneur or sHAred-serf?

9. WHo PAYs tHe Bill WHen soMetHing goes Wrong?

consuMers & tHe enVironMent

10. A coMMunitY of trust or PriVAcY for sAle?

11. ideAlists or PrAgMAtists: do sHArers reAllY cAre?

12. is sHAring good for tHe PlAnet?


1.3 MarkeT ConTroVersies

Estimates of the current value of the collaborative economy and predictions for future growth are starting to emerge. While the figures may not be unified across the board, the overall mes-sage is clear: it has generated considerable interest from the investment community. According to market analyst VB Profiles, this economy today includes 17 billion-dollar companies (12 of them based in the US) with 60,000 employees. The sector has received $15 billion in venture capital, which amounts to more than twice what has been invested in social networks to date, however recent research by Crowd Companies and Vision Critical9 reveals that this has been channelled to just a few dominant players. More than half of the activity in each sharing category is owned by one company; Kickstarter is responsible for 57% of crowdfunding transactions, Craigslist for 65% of professional services, Uber for 86% of ridesharing and Etsy for 91% of the custom products marketplace. “The one percent clearly own the sharing start-ups, which means this is continued capitalism — not idealistic socialism” (Owyang 2015).

The secret to the success of these “unicorns”10 is “the financial-ization of the everyday version 3.0 (….) companies like Uber and Airbnb are enjoying their Andy Warhol moment, their $15 billion of fame. In the absence of any physical infrastructure of their own they are running on your car, apartment, labour and importantly, time” (Scholz 2015).

1 / Uber, the world’s largest taxi company, owns no cars; 2 / Airbnb, the world’s largest accommodation provider, owns no real estate; 3 / Alibaba, the world’s most valu-able retailer, owns no inventory; 4 / Facebook, the world’s most popular content platform, owns no content.11

In addition to lack of equality at the macro level, inequality of value distribution has also been observed at the individual platform level. For example, collaborative economy critic Tom Slee has challenged Airbnb’s claim that its users are single individuals earning small amounts of extra money, finding that half the revenue generated in New York City accrues to hosts with multiple listings (Schor 2014).

At the heart of the business model of new software platforms are the low transaction costs where companies effectively act as middlemen between those who have the asset or service, and those who want access to it. This matching of haves to needs is part of the discourse of collaborative economy advocates, whereby efficiency and trust are heralded as the key ingredients to facilitat-ing this exchange. However, from a purely economic perspective, the shift towards a “Zero Marginal Cost Society,”12 a term coined by Jeremy Rifkin to describe an economy based on software and intellectual property (rather than physical goods), may be a way of achieving even higher returns on capital than before.

At the other end of the spectrum, grassroots organisations within the collaborative economy sector (such as Freecycle and Couchsurfing) are becoming more commercially oriented. The UK-based free reuse platform Freegle is a good example of this. It was formed by 200 volunteers who left the US-based platform Freecycle in 2009 as they felt its ethos was being eroded; Freegle now has 1,9 million members. As it grew in membership Freegle went through a process of formalizing internal policies, creating a new cooperative structure, centralizing activities and finally establishing income streams to support its new professional-ized structure. By 2014 Freegle had become a limited company (Martin el al. 2015).

2. do tHe users get A slice of tHe cAke?

The great fallacy behind the software platforms business model is that the very users who build the social capital and provide the assets and services required for the platforms to operate are eventually taken advantage of as external investors demand ever higher returns. “Thanks to users unpaid labour of friending and posting, tech companies can employ far fewer people, and extract five to ten times more profit per employee than business-es in other industries. Fiduciary responsibility to their investors requires that they turn on the people who made them successful” (Schneider 2014). Schneider goes on to explain how platforms entice users into their online communities as an apparently free and open commons, “only to gradually enclose it by tweaking terms of service, diluting privacy, or charging fees for essential features.” Other authors note similar patterns. Shor observes that business-to-consumer software platforms are more about maximising financial return than sharing values: “increasingly they’re about earning money (for providers) and managing labour

9 The new rules of the collaborative economy, a report published by Crowd Companies and Vision Critical.

10 Unicorns are companies that have soared to a $1 billion valuation or higher, based on fundraising.

11 Tweet by Ted Nash @Nashy 2015.

12 This concept was coined by Jeremy Rifkin in his book of the same title published in July 2015.

1. WHo gets tHe MoneY?

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and other costs cheaply (for the platforms), than the feel-good values of sociability, carbon footprint reduction and efficiency many platforms emphasized when they started out” (Shor 2015).

While of course the platforms do generate collaboration between users, when it comes to value distribution, ownership and gover-nance, the collaborative economy is built on age-old capitalism techniques: reduce marginal costs, invest, grow fast, sell and move on. Now that the collaborative way has been paved by the pioneers (notably Uber and Airbnb), the sector is fertile for this kind of quick “growth and sell” model. Take Lyft, for example, which was launched in 2012 and within just two years was bought by Avis for $500 million (along with its competitor Zipcar for the same amount).

Advocates for a fairer distribution of the wealth generated by the collaborative economy claim that the value should be shared with the users who have helped create it. In this vein Gansky argues that “collaborative economy companies should share more with the people who generate value for them” (Gansky 2015). Others have taken an even more critical stance, asserting that “the sharing economy is truly neoliberalism on steroids” where everyone is encouraged to be an entrepreneur and take part, yet the power lies in the hands of the few companies who control the data (Morozov 2014). The network effects of new software platforms (where the value of their service is dependent on the number of people using them) exacerbates this inequality. This is because network effects reinforce market power for the already dominant companies as more users attract still more users, dominant networks attract developers and networks at-tract advertisers (Data Justice 2015).

As the sector grows, so do the disparities between the different types of approach, with an increasing gap between the not-for-profit platforms that offer genuine sharing of assets without any money changing hands such as Freecycle and Couchsurfing, LandShare and Yerdle, and the commercially oriented profit-making multi-nationals such as TaskRabbit, Airbnb, Uber and Lyft. There is a widening gap between the gift-giving models and those founded on market-based exchange; “some are genuinely collaborative and communal, while others are hotly competitive and profit-driven” (Nadeem 2015). Given the concern around this disparity, new concepts are emerging such as that of “we washing” – disguising purely profit-driven operations as open commons platforms.

In light of the controversy around value distribution and platform governance there is an emerging debate from collaborative econ-omy advocates on the potential for decentralised platforms. This concept is built on the idea that individuals would be able to share their assets, time, and money without going through an intermedi-ary, externally managed software platform. Sharetribe. which has developed an open-source software to enable independent sharing communities to achieve this, is highlighted later in this publication.

A recent sign that the collaborative economy has disrupted busi-ness models across the board is the adoption of collaborative services by traditional companies. Should we therefore consider BMW’s car-sharing service part of the collaborative economy? Is Avis’ purchase of Lyft and Zipcar an example of “sharing”? The collaborative space now offers a broad range of responses to the disruption of the mobility sector from traditional automobile manufacturers offering car-share services (e.g. BMW’s Drive Now, Peugeot “Moi voiture” etc.), to independent car-sharing companies (e.g. Lyft, Avancar), ridesharing systems (e.g. BlaB-laCar) and peer-to-peer rental (e.g. Socialcar). The economic crisis, mobility saturation in cities and young people’s interest in access over ownership are all factors that have paved the way for these innovations.

Traditional companies in the tourism sector are also adapting their models to the collaborative culture. Marriot has recently partnered with the international co-working company LiquidSpace to offer co-working in their under-used lobbies and common spac-es, which represents a new revenue stream and also brings po-tentially new customers through their doors. Fang Roe, Marriott’s chief sales and marketing officer for Asia and Pacific explains, “It wasn’t just revenue generation, it was also about changing consumer perceptions of our hotels and becoming more relevant to how people live and work today” (Botsman 2014). The new hybrid business Be(Mate) combining the facilities of a hotel with the culture of Airbnb is another example. While the big players have the resources to adapt to the collaborative economy, the reality of the small hotels is very different, with many being threatened by the competition of cheaper Airbnb rentals. Recent research shows that in Austin and Boston, local hotel revenues have dropped by 8-10% as a result of Airbnb (Zervas 2015).

There is extensive literature on the emerging trend of traditional companies adapting their business models to the collaborative culture (Martin 2015, Owyang 2015); the UK government’s re-view of the sharing economy also points to this as a key growth sector: “we will see more of is traditional businesses starting to use sharing models to complement their existing services” (De-partment for Innovation and Skills 2014). Other UK examples include B&Q’s skill- and tool-sharing platform Streetclub and Marks & Spencers’ secondhand clothes service. Table 3 out-lines some of the different approaches traditional companies are taking to adapt to the trends of the collaborative economy, from the lowest-risk strategy of partnerships (sometimes criti-cised as simple marketing ploys) to the integration of entirely new business models.

3. trAditionAl coMPAnies: sHAre or die?


“The continued, rapid growth of collaboration means every busi-ness needs to think about how to combat, complement or compete in this space” (Owyang 2015).13 “These new upstarts are changing the rules of the game, and forcing everyone else to play along or disappear from existence” (Owyang and Samuel 2015).

Table 3. How traditional companies adapt to the collaborative economy

APProAcH coMPAnY ActiVitY exAMPles

Sponsorship and partnership

Pay for co-branding or create partnerships for an integrated service provision

• Walgreens pharmacy, PepsiCo and GE partnerships with TaskRabbit including TaskRabbit buttons on their apps for deliveries

• Vodafone sponsors Bicing, Barclays sponsors “BorisBikes” in London, Citibank sponsors bike-sharing in France

• Marriot Hotels partners with LiquidSpace to offer co-working spaces in hotels

• Whole Foods partners with Instacart for one-hour deliveries

• Nordstorm resells maker goods from Etsy in retail stores

Investment Purchase equity in established collaborative economy companies

• Google invests $125 in Lending Club (P2P lending)

• GE invests $30m in Quirky (crowdsourcing ideas)

• General Motors invests $3m in RelayRides

• BMW’s iVentures invests in Parkatmyhouse (driveway rental) and Chargeatmyhouse (EV charging)

• Hyatt invests in OneFineStay (homesharing platform)

Acquisitions Buy new software platforms, usually maintaining the original brand

• In 2013 Avis buys Lyft for $500m and Zipcar for $500m, and maintains the two competing brands

• In 2013 SNCF (the publically run French railway) car-sharing platform www.123voiture.com

• In 2015 Expedia bought Airbnb rival, HomeAway for $3.9 billion and Priceline has bought booking.com

New hybrid business models

Develop new business models adpating to collaborative trends

• DHL’s new App “Myways” to connect senders and recipients with people willing to transport parcels

• Hotel chain Room Mate launched “Be Mate” (tourist apartment platform)

• BMW’s “Drive Now,” Peugot’s “Mu”, Ford’s “GetAround” carsharing services and Ford’s “GoDrive” for low emission vehicle hire

• Decathlon’s “Trocathlon” and for selling 2nd hand products, Wallmart’s “Trade In” to sell back phones & electronics in stores

• Insurance companies (USAA, Geico, Farmer’s Insurance) offer special packages for ridesharing

Source: Author, Cusumano (2015) and Botsman (2014).

13 For more information see: http://www.triplepundit.com/2015/10/collaborative-economy-opportunities-companies/

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The report “How to survive and win in the collaborative economy” published by Crowd Companies shows that 82% of sharing trans-actions are at least partially motivated by price. Convenience is the second most popular reason people choose sharing services and branding is very relevant with trust in known brands as a key factor. The report recommends that companies focus on these three aspects (price, convenience and brand) when driving their consumers and traditional buyers towards sharing.

Take-aways

To round up our exploration of the market-based controversies, we offer three take-aways. Firstly, the majority of the collaborative economy is controlled (like so many other parts of the economy) by just a handful of external investors and driven by tradition-al capitalistic principles. Secondly, the value created by these companies is based on assets they don´t actually own with the “sharers” getting no share of this value. Thirdly, while there is great diversity across the sector from the genuine collaborative platforms offering shared access to common resources to the profit-driven low-marginal-cost intermediary platforms, there is a growing tendency for traditional companies to sponsor, invest in and acquire new software platforms as well as adapting their own models to compete in this new arena.

4. in tHe neW “diY culture”: Will tHe stAte retreAt?

“The proliferation of Do-It-Yourself (DIY) culture in all aspects of citizen life (education, professional, labour, health etc.), appears to be the perfect legitimization for the progressive dismantling of the state” (Sunyer 2015).

That the emerging context of profitable private companies with the help of collaborative citizens can create efficient ways of providing “public” services, such as transport or waste man-agement, and achieve significant environmental gains, is poten-tially great news for governments. Many collaborative economy platforms are achieving major efficiencies in terms of a more intensive use of underutilised resources that has not been possible to achieve from public initiatives alone. The massive uptake of private car-sharing initiatives (BlaBlaCar alone has 20 million registered users) is a clear example of this and research shows that this translates into reductions in C02 emissions (Martin & Shaheen 2011). However, the flip side of this issue is that the car-sharing trend could result in the state having fewer potential passengers to provide for through public transport, and hence legitimizing reductions in those services. This could leave those who lack access to such software platforms with poorer access to transport.

The global phenomenon of Open Education (OpenCourseWare, MOOCs, TED, Wikiversity, aaaaarg, et al.) is another area of major disruption; it is radically changing the landscape of higher education in terms of technological-pedagogic practices, busi-ness models, ownership and institutional structures. In this case public education provision is being turned on its head by private market-oriented solutions, again posing a question for governments as to the future of public education provision.

“Many venture and multinational capital-backed Open Education start-ups are consciously aimed at disrupting the institutional structures of higher education in order to open up what to date has largely been a public institution to the penetration of their marketised solutions” (Broekman et al. 2014).

A potential outcome for the collaborative economy is that it creates a similar situation to that of the UK’s Big Society, where social costs are offloaded onto the realm of households and “empowered” communities and as a result more profit making initiatives engage with social provision resulting in more, not less, inequality. Critics have argued that in the case of the Big Society this created “further financialisation and a deepening of capitalist disciplinary logics into the social fabric” (Dowling 2014).

1.4 goVernMenT ConTroVersies


Clearly a pragmatic scenario would be a combined effort be-tween private software platforms and public institutions where-by the platforms focus on achieving resource efficiencies and widening access to new services while the public sector di-verts potential financial savings to the social priorities that the collaborative economy may not reach, such as the elderly or other groups with limited internet access. To safeguard public services and citizens, Morozov, author of Net Delusion: The Dark Side of Internet Freedom, has put forward a more radical solution. To ensure that citizens are not crushed by the increasing power of software platforms whereby the majority of day-to-day services end up being controlled by a small handful of large private companies in an “emerging data-centric cap-italism,” he advocates ensuring that the driving force of this new capitalism (i.e. the data itself) remains within public hands (Morozov 2013).

5. is sHAring “fAir” for existing coMPAnies?

Companies operating within the collaborative economy benefit from a variety of economic advantages (Edelman 2015). A major advantage is bypassing the financial burden of owning stock as the physical assets being exchanged (e.g. cars, houses and tools) belong to platform users. There are also significant cost reductions through decentralization, where no central physical resources are required to operate the platforms. In turn, the decentralization of production and distribution enables a far more efficient matching between the haves and wants of cus-tomers, which is described as preference-matching. The ability to balance supply and demand more efficiently through dynamic pricing models such as Uber’s “surge pricing” algorithm is another advantage for companies. This model raises prices in times of peak demand and in response users shift from peak to lower demand periods, thus self-regulating supply and demand. Likewise Airbnb has started to use a variable pricing model where hosts can set a maximum and minimum and let the algorithm calculate the best price according to demand.14 BlaBlaCar provides price recommendations through a series of algorithms based on location, popularity and seasonal tempera-tures to ensure hosts are accurately adjusted to the market.

Given that many new software platforms provide services that are unregulated, an additional economic advantage is not having to pay for a license to operate. Furthermore, in some cases li-censes are simply not available, as in the case of taxis in Madrid or touristic apartments in Barcelona. Finally, organisations can

operate without needing to comply with local health and safety regulations and standards or, in some cases, to pay local taxes.

As a result of these economic advantages, it is unsurprising that there is considerable backlash from the traditional service providers and we are witnessing as “constant and continuing battles occur between incumbents, lobbyist and governments” (Allen & Berg 2014). Incumbents claim that their new soft-ware-based counterparts enjoy unfair competition and empirical evidence is starting to emerge that the sharing economy is making inroads by successfully competing with, and acquiring market share from, incumbent firms (Zervas et al. 2015). Unfair competition is a growing concern amongst trade associations, governments and international institutions, which take the view that “to assure sharing will grow up, we need to avoid market and regulatory failures that allow parts of the market to gain unfair advantage over others” (Malhotra 2015).

In response to disgruntled lobbies from the hotel and taxi industry, Spain’s National Commission for Markets and Compe-tition (CNMC) has undertaken a consultation on the legalities of the collaborative economy and whether it breaches rules around fair competition, although it has already advanced that no regulation may be the best kind of regulation. This approach has gained support recently in the Spanish press: “If there is no economic reason for the activity not to take place, why should the individual freedom of the businessman or consum-er be restricted? Why defend the interest of a single group?” (Villarejo 2015). To counteract the pressure from incumbents, some collaborative economy groups have organized their own counter-lobbying; Airbnb funded the “Fair to Share” campaign in San Francisco and has hired “community organisers” to amplify the voice of home-sharing supporters in Barcelona to allow for short-term rentals. A curious phenomenon is that this kind of activity has been described as the “uberisation of activism” (Boudrou 2015).

14 “Airbnb Modifies Its Pricing Model” Accessed 13 November 2015 at http://www.pymnts.com/

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Taxation is another thorny issue and research suggests that government tax revenue will decline as the collaborative econ-omy grows. “Ridesharing can exploit loopholes to avoid rules and taxes. When this occurs, the sharing economy becomes the skimming economy” (Malhotra & Alstyne 2015). Where cloud companies’ fiscal duty lies is unclear. As in many other sectors, the company headquarters are often established in countries with low corporate tax regimes; Airbnb has joined social media giants such as Google, Facebook, LinkedIn and others in that it pays corporate tax in Ireland. For local tax, certain city councils and governments have taken a proactive stance to enforce collaborative companies to make a contribution. For example, Airbnb now facilitates local tax collection from users in 16 cities across the world (of the 190 where it operates) (see Table 4).

Table 4. Airbnb tax collection across the world

citY/countrY tAx PolicY

Amsterdam 5% of total revenue to host

Enforced by City Council, applied to all length stays

Phoenix, Arizona (US)

5% of total revenue to host

Several cities operate under this tariff

New York City (US) 5,875% of total revenue to host

Equivalent to hotel room occupancy tax

San Francisco (US) 14% of total revenue to host

Equivalent to hotel tax, valid for stays of up to 29 days

District of Colombia (US)

14,5% of total revenue to host

For all stays up to 90 days

India 14% of total listing price

Includes any cleaning fee

Paris and other French cities

0,83€ per person / per night

This amount includes the city-imposed tourist tax and the administrative district tax

it is clear that the debate on tax and the collaborative economy will continue to evolve as governments become more engaged in this space. In this light, the UK government is developing an online tax calculator to help users work out how much tax they should pay. However, this is only part of the larger debate as to how to regulate the collaborative economy. Innovation is hard to regulate per se and the dilemmas that arise are whether the new software platforms should be classified as innovation and therefore protected, or should be subject to the same rules as existing commercial operations.

“Regulators are at crossroads: on the one hand, innovation in sharing economy should not be stifled by excessive and outdat-ed regulation; on the other, there is a real need to protect the users of these services from fraud, liability and unskilled service providers” (Ranchordás 2015).

The debate over regulation versus innovation hinges on wheth-er experimentation with new technologies and business models should be permitted by default or whether the precautionary prin-ciple should be applied, or perhaps something in between. Some authors suggest that regulation is stifling innovation and support the concept of permissionless innovation: “Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated and problems, if they develop at all, can be addressed later” (Thierer 2015). Thierer is not alone, and others argue that the rapid growth of the collaborative economy “alleviates the need for much of this top-down regulation, with these recent innovations likely to do a better job of serving consumer needs” (Koopman 2015).

US Federal Trade Commissioner Maureen Ohlhausen also ar-gues for a similar “innovate first - fix later” policy; in 2013 she called for “a dose of regulatory humility (…) and if harms do arise, consider whether existing laws and regulations are sufficient to address them, before assuming that new rules are required.”15 However, later in 2015 she made it clear that the regulatory debate for the collaborative economy is far more complex: “How should regulators appropriately respond to a highly dynamic market where the business models of today may be completely transformed tomorrow?” 16

15 Comments from her speech “Internet of Things: When Things Talk Among Themselves” from the FTC Internet of Things Workshop held on 19th November 2013.

16 Sharing Some Thoughts on the “Sharing” Economy. Prepared Remarks of Commissioner Maureen K. Ohlhausen, “Sharing” Economy Workshop June 9, 2015.

6. tAxAtion And regulAtion: WHAt sHould goVernMents do?


Different regulators have reacted in different ways so far. Uber, for example, has been banned in 10 countries, suspended in 6 cities and seen one of its managers in Paris face prosecu-tion. Although Uber has received considerable bad press for these incidents, its growth seems unaffected and it is currently opening operations in its 300th city. Other regulatory responses include California’s Public Utilities Commission regulation of car-sharing, with obligatory vehicle checks, insurance coverage and police checks for drivers. Australia, Singapore and India also require drivers to have professional insurance. In response to this, Uber and Lyft have changed their policy to oblige driv-ers to have such insurance that covers their driving at least in “period 1” (i.e. the time they are on the way to pick up a passenger). Other countries have taken a stricter stance, as is the case in France, where the “Loi Thévenoud” was passed in 2014 to protect taxi incumbents. This law states that taxi providers cannot be geolocalised before they are hired, and that they must return to a central base before their next call, as well as inform of their price at the time of booking. Later in 2015 a new “15-minute rule” was passed to prohibit taxis picking up passengers unless 15 minutes had passed from soliciting the ride. This regulation attempt, however, has been unpopular from incumbents (who ask for a longer wait time) and ignored by the ridesharing sector. Edelman observes that policing such extra regulation (such as drug testing, vehicle inspections, waiting times etc.) implies an additional cost for the public sector, and in many cases there is no evidence of the benefits of such requirements. However, in the case of the collaborative economy the self-regulation mechanisms built into most software platforms cost the public sector nothing and could be more effective. For example, it is more likely that a user will give a driver a poor rating on their phone than take the time to go to the police station to file a complaint.

Take-aways

We conclude with three reflections on the role of governments in the collaborative economy. Firstly, a proactive engagement from regulators with new software platforms could help identify where government can best contribute to ensure that citizens and the environment are protected and social needs met. Secondly, in terms of creating level playing fields between collaborative companies and traditional counterparts, the jury is still out. Regulators will as always struggle to keep up with the fast pace of innovation. Finally, the issue of local tax seems relatively straightforward with several cities already acting on this, how-ever for other types of regulation it make sense for regulators to take advantage of the self-regulation mechanisms built into software platforms and integrate this into their policies.

The debate around regulation of the collaborative economy is set to continue, and authors argue for an updated regulatory framework that takes into consideration the following advantag-es of the sector: increased efficiencies through reduced trans-action costs, improved allocation of resources, sophisticated reputation and accountability systems and pricing efficiencies (Edelman 2015).

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The economic crisis coupled with the phenomenon of the Zero Marginal Cost Society, where the internet has facilitated a shift from markets to collaborative commons with transactions costs close to zero, has had profound implications on labour markets across the world.

“Nowhere is the zero marginal cost phenomenon having more impact than the labour market, where workerless factories and offices, virtual retailing and automated logistics and transport networks are becoming more prevalent. Not surprisingly, the new employment opportunities lie in the collaborative commons in fields that tend to be non-profit and strengthen social infrastruc-ture” (Rifkin 2014).

One of the results of this disruption of entire sectors of the global economy is a shift away from contract employment with traditional companies to more short-term, freelance work. For a sector which has received $15 billion in investment, the fact that only 60,000 jobs have been created is evidence of this shift. The Freelancers Union currently estimates that one third of the US workforce is freelance,17 and the EU Affairs Freelancers Association18 claims one quarter in Europe. The Bureau of Labour Statistics19 estimates are that by 2020 50% of workers in the US will be freelance.

There are several ways of looking at this changing global em-ployment landscape. On the one hand, the flexible forms of employment that the collaborative economy provides are a great opportunity in times of economic crisis. “These plat-forms are expanding people’s options with an increasing array of work migrating to on-demand arrangements fuelled by ever more sophisticated algorithms that match available and quali-fied workers with the work that suits them, when they want it” (Boudrou 2015). In the UK the government claims the route to self-employment has never been easier and the UK government celebrates the fact that individuals are “empowered to make money from assets and skills they already own” (Wosskow 2014).

In the context of the Zero Marginal Cost Society, Rifkin foresees a positive future for workers, where many needs are satisfied through a highly efficient and highly automated collaborative commons: “our grandchildren are likely to look back at the era of mass employment in the market with the same sense of

utter disbelief as we look upon slavery and serfdom in former times. The very idea that a human being’s worth was measured almost exclusively by his or her productive output of goods and services and material wealth will seem primitive, even barbaric” (Rifkin 2015).

The flip side, however, is that the rights, benefits and fair pay of the emerging sector of freelancers is under threat. Uber drivers can be held liable for accidents on the job, TaskRabbit workers don´t receive a pension and workers looking for health insurance or job stability are unlikely to find it in the collabora-tive economy. Micro-task sites have been accused of stripping opportunities from the bottom of the pyramid as jobs move from traditional manufacturing to services and micro-services with software platforms facing fierce competition. Ideological opponents have used terms such as “shared serfdom,” and “employee-serfs” to describe collaborative economy workers, observing that “collaborative companies can shed overhead but mortgage the future by covering only marginal costs and leaving nothing for new skills, health care or retirement” (Malhotra 2015).

8. Micro-entrePreneur or sHAred-serf?

“As start-ups and their wealthy investors increase their valuation into the millions and billions, sharing companies create a new kind of digital economy feudalism” (Owyang and Samuel 2015).

In 2015 a comprehensive study of freelancers in the US work-ing in the collaborative space (ridesharers, micro-taskers etc.) was carried out and results published in the 1099 Economy Workforce Report.20 The report provides a fairly bleak picture for the micro-entrepreneur. “It’s dominated by the Ubers and Homejoys of the world, companies that use low-cost contract workers to serve customers at high volume and take a cut. This is also known as the 1099 economy, since contract workers fill out 1099 tax forms used to report income other than regular wages and salary” (Benner, 2015).

The report shows that workers do not rely on this kind of work as a primary source of income. Around 60% of workers claim to use the collaborative economy for less than 50% of their household income and one third said that they can´t see them-selves as an independent contractor for the rest of their life and would like to leave after a maximum of three years. Insufficient

1.5 Workers’ ConTroVersies

7. does it creAte More joBs?

17 For more information see: http://www.freelancersunion.org.

18 For more information see: http://www.euro-freelancers.eu/eu-affairs-freelancers-association.

19 For more information see: http://www.bls.gov

20 The RFS 1099 Economy Workforce Report published by Requests for Startups.


pay was identified as the main reason for leaving this type of work (43%) and not finding enough work was the main cause of dissatisfaction (49%) with understanding tax and legal issues as a close second (36%). According to SherpaShare21 Uber and Lyft drivers earn between $10 and $15 per trip across the US (with the exception of New York, where they earn double but are highly regulated). The costs incurred by drivers, such as fuel, insurance, upkeep are not yet measured across the board so drivers’ net income is difficult to estimate.

In some cases the precariousness of collaborative economy jobs has been the source of lawsuits, with contract workers suing Uber, Lyft, Postmates and Instacart with demands to be recognized as employees (Benner 2015). Dissatisfaction has also been expressed by employees of traditional companies, who value security over flexibility and feel threatened by the new wave of on-demand micro-task platforms such as TaskRabbit and Amazon’s Mechanical Turk (Buttonwood 2015). Airbnb fig-ures, however, tell a different story, with the claim that “more than 50% of Airbnb hosts depend on it to pay their rent or mort-gage today” (Friedman 2013). There is still a major information gap around the economic reality of the new micro-entrepreneur given the complexities of measuring employment status, labour force participation and wages earned; in addition, of course, much of the collaborative economy is not accounted for by traditional GDP metrics.

Economist Guy Standing named a new type of freelance worker in 2011 as “the precariat (...) characterised by chronic uncer-tainty and insecurity.” These workers move in and out of jobs with no secure role in the market, no occupational identity and little future perspective. Although this emerging class fuels the collaborative economy, Standing is now considering the phe-nomenon as a potential source of social change, advocating that “the precariat needs to move beyond the primitive rebel stage manifested in 2011 and become enough of a class-for-itself to be a power for change” (Standing 2015).

According to the aforementioned 1099 workforce report, inves-tors welcome regulatory intervention to address worker precar-iousness in the collaborative economy. As stated by Joanne Yuan from Cowboy Ventures, “regulatory change will be extremely impactful in this space.” In the same report Mar Hershenson from Pejman Mar Ventures comments, “the government will become more involved and eventually set clear guidelines for classifying the workers and determining their benefits (….) employers them-selves will have to reconsider HR practices (…) how to recruit, how to train, how much to train them, what type of compensation and benefits, how much integration into the company culture etc.”

A poignant issue for people working in the collaborative space is the lack of insurance coverage whilst on the job, as com-panies typically offload the risk to their workers with little or no insurance to help reduce transaction costs. In the past couple of years liability issues have become more common, as illustrated by the two following examples.

“Uber driver held liable for death of six-year-old pedestrian”

In 2013 in San Francisco, an Uber driver struck a mother and two children; the six-year-old daughter, Sofia Liu, was killed. The family sued both Uber and the driver, claim-ing that the driver was looking at the Uber app on his phone during the accident. Uber immediately deactivated the driver’s account and did not accept responsibility, claiming the driver was not working for them at the time since he had no passenger in his car.

Uber subsequently changed their policy to insure drivers from the time they have the app activated, even though they may not be carrying a passenger. The family lawyers claimed that this insurance policy is too weak, consid-ering that the coverage was not applicable to cover the medical expenses Sofia’s mother and brother incurred in the accident. Eventually, in July 2015, an out-of-court settlement was made between Uber and the family and the driver was charged with misdemeanour vehicular manslaughter.

Source: Constine 2014 and Bradshaw 2015.

21 Sherpashare is a smartphone app that helps rideshare drivers track their mileage and tax deductions, and is based on over 10,000 drivers taking more than 1 million trips from January to May of 2015.

9. WHo PAYs tHe Bill WHen soMetHing goes Wrong?

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“Living and dying on Airbnb”

“It’s only a matter of time until something terrible hap-pens,” predicted Ron Lieber in his article on liability issues of Airbnb for the New York Times in 2012.20 That very same year, news of the first Airbnb guest to die hit the press. Whilst staying at a property in Texas, an Airbnb guest was hit on the head by a branch above the garden swing. He was rendered unconscious immedi-ately and, due to the subsequent and irreversible brain damage, his family later made the decision to take him off a life-support machine.

As a journalist and keen to spread the inconvenient truth of Airbnb, the deceased’s son Zak Stone did not accept the typical out-of-court settlement that would have prevented him from writing about the situation. He has since been researching liability issues for guests and hosts of Airbnb around the world. The findings are several: firstly, the company’s insurance policy for dam-age to property has increased (after a host had their property burnt down and heirlooms stolen); secondly, integrating safety measures is simply not good business for Airbnb (imagine the costs of inspection and com-pliance); and, finally, his father’s death is not the only story of its kind, as similar accidents have happened in Taiwan and Canada, though the details were covered up.

Source: Stone 2015.

Liability issues are complex and fast evolving. Companies like Uber and Airbnb have taken a reactive stance, adapting their policies as incidents occur, though whenever possible they avoid paying for any damages. The British Insurance Brokers’ Association has taken a more proactive stance and issued a new guide to insurance and the sharing economy (BIBA 2014). This guide suggests that collaborative economy companies should to pool their resources to jointly negotiate insurance coverage, which would best be achieved through the creation of a trade body to represent the sharing economy sector. Another potential measure would be to enable users (as producers) to provide reviews of the platforms they are operating under, an issue which was recently discussed at the Economy Forum of Le Havre by Catalan collaborative economy expert Albert Cañigueral and other collaborative economy advocates.

Take-aways

The controversies around the future of work in the collaborative economy are a growing concern and we summarise the current debate with the following take-aways. First and foremost, there are more opportunities than ever to earn money through sharing out assets, skills and time. The dark side of this reality is that there is an increasing dissatisfaction being voiced from the new breed of micro-entrepreneur in terms of low pay, lack of benefits and stability. This situation is likely to be regulated in the future. Finally, liability issues are hitting the press as workers are left exposed by the low marginal cost platforms and insurance companies are beginning to respond to the emerging needs for different types of coverage in this sector.


“As we entrust more and more of our lives to connected devices and smartphone apps, we must ask what happens if a critical device fails? What are innovators doing to safeguard critical functions? And what happens to all the data generated by this sharing activity?“ (Gobble 2015).

Trust was been heralded as one of the cornerstones of the collaborative economy (Botsman 2010) and online reputation mechanisms, whereby users and consumers self-police the plat-forms, have been considered as an alternative to regulation. Lior Strahilevitz in his essay in the recent book The Reputation Economy espouses this concept: “imagine if every plumber, manu-factured product, cell phone provider, home builder, professor, hair stylist, accountant, attorney, golf pro, and taxi driver were rated… In such a world, there would be diminished need for regulatory oversight and legal remedies because consumers would police misconduct themselves” (Fertik 2013). Trust in brands is there-fore crucial for collaborative companies. Many of the top sharing companies such as Etsy, BlaBlaCar and Kickstarter have hugely popular reputations (Owyang and Samuel 2015) and these are maintained by a sophisticated system of mechanisms, algorithms and finely tuned feedback systems for users.

There is, however, an ethical debate around the increasing penetration of user feedback mechanisms: “How do we feel about living in an environment of hyper-accountability?” (Tanz 2014). The question it raises is, what happens if the big data captured through the multiple software platforms gets into the wrong hands? The organisation Data Justice alerts us to the danger of our digital identities being increasingly controlled by just a few players (namely Google and Facebook). They warn against the potential for these big data platforms becoming the gateways to all types of service from education to health, energy to transportation.22

Increasing, services such as the messenger service Telegram are being used to protect users’ identity; they are heavily en-crypted to avoid sharing location and identity. A step further in this direction is the increasing activity on the Darknet and as-sociated anonymity networks enabling peer-to-peer connections, which conceal individuals’ identity and location. Tor, currently the most popular free software for enabling this anonymous communication, has an estimated 2,5 million users daily, often associated with Bitcoin and other crypto currency transactions.23

An additional controversial aspect of online reputation issues is the potential for fraud and bias. “Biases can mislead, ostracise, shill unearned praise, and damn worthy competitors. A recent study found 16% of Yelp reviews are not genuine” (Zervas 2015). Zervas’ later article “Fake it till you make it” explores the eco-nomic incentives behind the business decision to leave fake reviews. In response to potential fraud, initiatives have been developed such as Trustcloud, a trust and safety service for platforms, users and consumers. From the public sector the UK government has developed the identity verification system Verify. Online reputation aggregators are also new mechanisms to enable people to collect and share their ratings across multiple sharing platforms; for example, eRated enables users to transfer their eBay rating to build trust on Etsy. Veridu and Jumio offer similar services. Helping to build consumer trust in online transactions is crucial for the future development of the sector, and public sector collaboration in this aspect has been highlighted as important in the UK government’s review of the sharing economy. “The Disclosure and Barring Service should fully digitise criminal records checks, so they can be (...) integrated into third party services such as sharing economy platforms” (Wosskow 2014).

11. ideAlists or PrAgMAtists: do sHArers reAllY cAre?

Given the unprecedented market reach of the collaborative economy, there is increasing market research activity to support companies in creating more targeted and effective marketing strategies to reach the new breed of collaborative consumer (Hellwig 2015; Mohlmann 2015). It has been estimated that 51% of the US population take part in the collaborative economy (PWC 2014) and this facet of the economy sees continued growth across all sectors including goods, services, money, transportation, space, learning and cryptocurrencies. In terms of a sharer’s profile, Millenials are more likely to share (33% of 18- to 34-year-olds already do so) with those over 55 less inclined to take part (27%). Notably, if the price reduction is 25% or more, sharers are unlikely to ever switch back to the traditional companies (Owyang & Samuel 2015).

Crowd Companies and Vision Critical recently carried out a study of 50,000 North American consumers which showed that price, convenience and brand were the three most significant factors in choosing a collaborative economy option. “It implies

1.6 CiTizens’ ConTroVersies

10. A coMMunitY of trust or PriVAcY for sAle?

22 For more information see: http://www.datajustice.org/site/network-effects-lock-market-power-big-data-platforms

23 For more information see Jamie Bartlett’s recent book The DarkNet: Inside the Digital Underworld

23

that consumers are more interested in lower costs and conve-nience than they are in fostering social relationships with the company or other consumers” (Eckhartd 2015). Findings were similar for research carried out across users of Car2go and Airbnb, which revealed that cost savings, familiarity, service quality, trust and utility had the most influence on the level of satisfaction of using a sharing option (Mohlmann 2015). This is not the case for all platforms, of course. For example, an analysis of the motivations for joining the no-money-transfer land access platform Landshare showed that people joined this platform predominantly for the social need of belonging, politics and ethics, but also for adventure and self-development, financial benefits and improved health (McArthur 2015).

The above research shows that different people share for dif-ferent reasons and it appears the decision to share is not based purely on demographic variables but rather on personal mindset and psychological disposition. According to a study of Swiss and German consumers, some of the influencing factors include the significance of the shared item to its owner. The more relevant the item to one’s “personal extended self,” the less likely it is to be shared. Other factors are personal philos-ophy around reciprocity, level of generosity and whom they are sharing with. On the whole crafts, recipes and knowledge are much easier to share than personal items and on the whole women and younger generations share slightly more than men and older adults (Hellwig et al. 2015). Hellwig’s study identifies four different types of sharers, as described in Table 5, and suggests targeted marketing strategies for each.

Table 5. Four sharing clusters

1. Idealists – largely women who work part time, are homemakers and believe sharing is a good thing for their community and the planet. “Sharing idealists are best targeted by sharing offers emphasising the idealistic and emotional value of sharing (rooted in intrinsic motivation, prosocial ideals, hedonic value, and social relationships).”

2. Opponents - slightly more men, tend to be entrepre-neurs, managers or retired and negators of social media. This group is basically sharing averse.

3. Pragmatists – tend to be male, full-time workers who share as they perceive it is the logical and fair thing to do. “Sharing pragmatists are best targeted by emphasizing the functional value of sharing (functionality, efficiency, utility value).”

4. Normatives - share because it’s seen as socially desirable. This group is likely to be the most active group on social media. “Sharing normatives are best targeted by sharing offers emphasizing the signalling value of sharing (sharing to signal that I am an ethical, responsible and social person).”

Source: Hellwig 2015.

12. is sHAring good for tHe PlAnet?

It depends of course, on whom you ask. Zipcar will tell you that each car club car removes 14 privately owned cars from the roads and estimates that London alone will have 1 million car-sharers by 2020.24 Lyft paints a similar picture and is now working with city councils to collaborate on reduced emissions plans. Likewise, Airbnb will tell you that home sharing is anoth-er way to save the planet. In 2015 the company published an environmental report25 claiming that in Europe Airbnb guests consume 78% less energy than their hotel guest counterparts (and 63% less in the US), as well as achieving significant reductions in waste production and water consumption and practicing greener travel habits. Airbnb has since been accused of greenwashing, however, and the full results of the survey across 8,000 guests are not publicly available. Many platforms present sharing as a way to reduce users’ carbon footprint and there is a general assumption that sharing is less resource in-tensive than traditional ways of accessing goods and facilities, particularly when considering the entire life cycle of a product. This said, there are some controversies around the environmen-tal implications of the collaborative economy. Does it overall generate more resource use through a potential “boomerang effect” whereby lower prices enable more transactions? What are the transport implications of decentralised systems? On the whole there is limited data available to answer such questions.

24 For more information see: http://www.zipcar.co.uk/car-lite-london-reports

25 For more information see: http://blog.airbnb.com/environmental-impacts-of-home-sharing/


One of the few sectors that has been studied in more detail, albeit with varying indicators, is the collaborative economy’s disruption of mobility and its environmental implications. For example, the change in car culture has been measured through the decline in applications for driving licenses (particularly in 16- to 29-year-olds) over the past decade with data for several countries including the US, France, UK, Germany and Austra-lia.26 There is also a wealth of statistics around reduced city congestion (London claims 30% less traffic over the past ten years), increased multi-modality and of course bike-sharing and car-sharing. “Mobility as a service” is the emerging trend, with digital information as the fuel of mobility. Gilles Vesco, the politician responsible for sustainable transport in Lyon, France, has gone so far as to predict the car will become an accessory to the smartphone (Moss 2015).

In terms of emissions reductions from this new mobility, com-prehensive data is still limited. One exception is the research on greenhouse gas (GHG) emission impacts from car-sharing. A US-based survey of users of the major car-sharing organisations showed that while individuals may increase emissions due to better access to cars, these small increases outweigh the de-creases from those who are sharing vehicles and driving less. The collective emissions reductions outweighed the collective increase, implying that car-sharing does reduce emissions as a whole. The study showed a mean reduction of −0.58 t GHG per year per household and 27 kilometres less driven per year (Martin & Shaheen 2011). Research in Korea showed similar results with car-sharing reducing the total C02 emissions in a small town by 62,07 t GHG/year with the car-sharing location as a key influencing factor (Lee et al. 2014).

In terms of the environmental impact of the on-demand economy where goods are delivered directly to the consumer, it is useful to consider the environmental analysis of e-commerce more broadly. A comprehensive review of 56 scientific research pa-pers27 revealed that the ecological footprint of B2C e-commerce is significantly greater than conventional shopping (Mangiaricina et al. 2015). Several influencing factors were noted: increased use of less efficient delivery vans, failed home deliveries caus-ing further travel, consumers tending to purchase from different sites each requiring independent deliveries, warehouse oper-ations becoming more complex with larger numbers of small deliveries and consumer returns, and finally greater packaging needed for individual item delivery.

Take-aways

To sum up our exploration of the controversies that affect citizens, we suggest the following take-aways. Firstly, in an era of hyper-accountability, the risks to privacy loss and data manipulation are increasing. Secondly, the response to this situation ranges from one extreme to another, from the gen-eration of online reputation aggregators to anonymous peer-to-peer networks. Thirdly, different people share for different reasons, and there are interesting reflections on how to best market a collaborative service depending on the type of sharer one is targeting. Last but definitely not least, the claim that the collaborative economy is the key to unlocking significant carbon reductions and resource efficiencies cannot be taken at face value. Of course, more rigorous research is need, but given that the collaborative economy has resulted in an overall increase in economic activity, whether it be through production, consumption, education or finance, it is possible that the overall increase in environmental impact far outweighs the reduced impact of each individual transaction.

26 See the study “The reasons for the recent decline in young driver licensing in the US” by the University of Michigan, US PIRG Education Fund’s report “21st Century

Transportation” and Charting Transport in Australia as examples.

27 This review analysed 56 scientific papers on the environmental implications of e-commerce published from 200 to 2014 in 38 peer-reviewed international journals.

25

BlABlAcAr

27

“We are learning to use our resources in a smarter way thanks to new technologies. Driving alone in your car for 300 miles has always been a nonsense, it is an economical and an ecological non-sense and it is boring” (Frédéric Mazzella, founder of BlaBlaCar).

oVerVieW Leading European carpooling startup, which enables passengers and drivers heading in the same direction to share the journey and associated costs through an integrated software platform, BlaBlacar charges a commission for every ride shared (in some countries), and the company is now worth over a billion dollars.

locAtion Active in 22 countries worldwide: Belgium, Netherlands, Luxembourg, Croatia, Czech Republic, France, Germany, Hungary, India, Italy, Poland, Portugal, Romania, Russia, Serbia, Spain, Slovakia, Turkey, Ukraine, the United Kingdom, Mexico and Brazil.

founded 2006, France.

users 25 million people registered.

sociAl iMPAct 10 million rides shared a quarter, 1 Megatonne of CO

2 saved over the last 12

months.

econoMic sustAinABilitY

Not publicly disclosed. Estimated turnover of $96 million annually. Market value: $1.6 billion. 15 offices. 410 employees.

innoVAtion tYPe A combination of well-designed safety and online reputation mechanisms with an effective global communications strategy.

cross-sector collABorAtion

Several partnerships with traditional companies and governments to integrate carpooling across sectors and amplify positive impacts.

rePlicABilitY And scAlABilitY

Model successfully replicated in some countries, and has expanded through a targeted global “acqui-hire” strategy. Plans for further international expansion in Asia and Latin America.

Launched in France in 2006, BlaBlaCar connects drivers who have empty seats with paying passengers who are heading in the same direction, generally for trips over 250 km. Since 2014 there have been 47 million human interactions across Europe through the BlaBlaCar platform. From the outset, BlaBlaCar has aimed to become the world’s leading long-distance carpooling platform. In early 2015, it acquired German competitor Carpooling.com, the biggest and oldest player in Europe with 6 million members, and in December 2015 the company launched in Brazil, its first venture into South America. It doubled its membership from 10 million to 20 million in 2014, making it the fastest growing col-laborative consumption company in Europe, and it now operates in 22 countries. It has entered the group of “Unicorn startups” with a market value of $1.6 billion and plans to expand further in Latin America and Asia. BlaBlaCar’s business model relies on a commission charged to the passenger (10%-15%) taken through their online booking system which is being introduced gradually in all countries once a critical mass of users has been reached in the respective country. The platform is based on a trusted community where both drivers and passengers share information about themselves, their car and their travel preferences, while be-ing encouraged to rate each other after sharing a ride. BlaBlaCar provides extra insurance; secure online payments and moderation to create a safe and fair environment. Additionally, BlaBlaCar’s impact on the environment is significant, with 90.000 tonnes of CO2 saved in Spain alone in the past 5 years.

From traditional carpooling to BlaBlaCar

Carpooling is not a new phenomenon and has adopted many names and variations around the world throughout the years. The first documented example of carpooling began shortly after the introduction of Ford’s Model T, America’s first affordable au-tomobile. In 1914 the recession hit the US prompted many car owners to offer seats in their cars to share costs. Just like today, carpooling’s popularity gave rise to opposition by public transport companies who lobbied the US government to control the com-petition. New liability regulations were introduced by 1918 which reduced ridesharing by 90%. By World War II, the US government partnered with the oil industry to launch an ad campaign to raise awareness on the need to save resources (Cozza 2012).

Another example of public support for ridesharing was prompted by the 1973 oil crisis and the subsequent oil embargo imposed by oil-producing countries. A steep hike in the price of the oil barrel ensued, leading President Nixon to design new policies to promote and provide funding for ridesharing initiatives. However, carpooling’s popularity declined again as the oil price fell and disposable incomes rose.


In Europe, carpooling has also flourished for decades in some countries. For instance, in Germany the concept has been popular for nearly 50 years. Interestingly, at present carpooling has largely replaced the longstanding European InterRailing and hitchhiking tradition. In countries such as Germany and France, where state-run railway monopolies have prevented the emergence of intercity bus networks, carpooling platforms have thrived. The Internet, and social networking in particular, combined with the focus on saving money brought about by the economic downturn, has helped fa-cilitate and promote carpooling among a wider spectrum of users beyond the earlier young, bohemian carpool users (see Table 1). All these elements have paved the way for the phenomenal rise of BlaBlaCar in Europe and elsewhere.

Table 1. Definitions of car-sharing and associated concepts

B2C Car-sharing: Service whereby a number of people use a company-owned fleet of cars that are parked in dedicated car bays around the city. Members can book (and extend) by the hour via web or phone and access the car via a smart card.28 Many traditional car manufacturers now offer this service as well as new startups.

Carpooling: Shared use of privately owned cars by the driver and one or more passengers.29 For the purpose of this study, we will refer to carpooling when it involves long-distance rides where costs are shared. BlaBlaCar is a carpooling platform. The terms carpooling and ridesharing are often used interchangeably.

Ridesharing: Inner-city taxi-like service where private ve-hicles operated by independent contractors are booked over the Internet at short notice using geolocation tech-nologies. Uber is a ridesharing platform.

P2P Car Rental: Platforms enabling car owners to rent out their cars to other individuals in exchange for a fee, and usually a commission from the platform.

Figure 1. Evolution of the car-sharing sector

cAr oWnersHiP cAr-sHAring cArPooling

MercedesSeatGM

BluemoveRespiroClickcar

BlaBlaCar Amovens

ridesHAring P2P cAr rentAl

UberLyft

SocialCar Drivy OuiCar

28 Car-Sharing. Available from: < http://p2pfoundation.net/Car_Sharing>. [15 December 2015].

29 Carpooling. Available from: <http://p2pfoundation.net/Carpooling>. [15 December 2015].

29

The rise of BlaBlaCar

BlaBlaCar was founded with a vision of transforming the world of mobility to make it more efficient, accessible and affordable. As Vincent Rosso, co-founder of BlaBlaCar Spain, puts it: “The initial vision was to ‘Digitalise the motorways’ bridging the gap between the carpool lanes and the internet injecting thus efficien-cy and accessibility into road transport”. BlaBlaCar’s concept has been described as “the hitchhiking of the 21st century” or the “Ryanair for the road” (Nusca 2015). Through its software platform, it connects drivers who have empty seats with paying passengers headed in the same direction. BlaBlaCar is often compared to Uber, however its business model is fundamen-tally different. It connects people who are travelling between cities (the average trip is 320 km long), not within a city, and, critically, BlaBlaCar drivers don’t make a profit. BlaBlaCar puts drivers and passengers in touch with each other and everyone shares the cost of the trip—which would happen anyway, as it is not an on-demand service. This strategy also protects the company from having to deal with taxi regulations that have plagued Uber. In a context of rising fuel costs, expensive public transport and traffic congestion on European roads, BlaBlaCar is a win-win proposition: the driver offers empty seats to cover petrol and road tolls and the passenger gets a cheap trip and convenience. In addition, cost sharing has two implications: drivers are insured since they are only splitting costs and they are not making any revenue that needs to be declared.

The idea for the company came to Frédéric Mazzella, founder of BlaBlaCar, during the Christmas holiday. It was the 24th of December 2003 and he was trying to get from Paris to his family home 500 km away for Christmas. The trains were full and his sister had to to make a detour to come to pick him up. On the way back, he hatched a business idea. “The highway goes the same way as the trains and I could see the trains were full with no seats left and the cars were empty.” This was a vast inefficiency in his eyes. “The idea was to organise all the available seats in cars just like we organise all the available seats in planes and trains, with a real search engine, and this did not exist. There was only demand and no offer and organised in a very weird way in that you would have neighbours who would share a ride but you did not know where they were going and when” (Hick-ey 2014). In 2006 Mazzella launched the V1 of the website www.Covoiturage.fr which he coded himself with a few friends, changing the name to BlaBlaCar in 2013. The platform is based on a trusted community where both drivers and passengers

share information about themselves, their car and their travel preferences and are encouraged to rate each other. BlaBlaCar provides extra insurance free of charge, secure online payments and moderation to create a safe and fair environment.

Monopolies and legal disputes

“From the beginning, I realised that what we are disrupting is not hitch-hiking, it’s the transport industry,” (Nicolas Brusson, BlaBlaCar co-founder and COO).

The collaborative economy has revolutionized the way we think about car ownership. While ownership of a personal vehicle still looms large, the existence of an increasingly diverse array of mobility modes has prompted many individuals to rethink their own approach to getting around. Collaborative platforms like BlaBlaCar, Uber and Lyft are disrupting the transport sector and are prompting defensive reactions from coach companies and taxi drivers. Over the past year or so, incumbents have filed a number of lawsuits against these startups worldwide. Many of these new software platforms have different business models; BlaBlaCar dubs itself a social network, Cabify is a travel agent and Uber connects paying passengers with drivers who are not licensed for commercial driving, which is illegal in many countries. Given its cost-sharing model, BlaBlaCar has by and large avoided Uber-style conflicts with regulators and incumbents. However, carpooling is undercutting trains and coaches and has attracted an increasing number of users who are keen to save costs and make last-minute travel decisions.

BlaBlaCar is currently involved in a lawsuit in Spain for unfair competition with the coach company trade association. This is the first lawsuit it has had to fight in all 22 countries where it operates in. In Spain, transport companies apply to the Transport Ministry for a transport public service authorisation to operate routes that they exploit on a monopolistic basis. In exchange, they are obliged to cover a number of daily services and unprofitable routes in order to provide a public transport service. Against this backdrop, the Confebús trade group claims that BlaBlaCar is operating a for-profit public transport company without complying with the necessary licenses and regulations. The trade group claims that it has lost 20% of the market share as a result. Confebús asked the judge to issue a restraining order to shut the service down, which the judge turned down at the end of November 2015 (Martínez 2015).


BlaBlaCar helps carpooling go mainstream

According to Spain’s BlaBlaCar Country Manager, Jaime Rodríguez de Santiago, carpooling is not a fad and will outlive the current eco-nomic downturn. On the contrary, he sees it is part of a global shift in mind-set and consumer patterns. Low-cost airlines emerged prior to the global downturn and remain popular as on balance they provide better value than traditional airlines. According to Jaime, carpooling has lost the low-cost, low-value hippy halo in favour of convenience and reliability. These predictions are sup-ported by UC Berkeley’s Transportation Sustainability Research Center’s work (TSRC) in the field of shared-use mobility which claims that “in the coming months and years we will see growth within the carsharing and associated industries themselves and with respect to our broader understanding of their social, economic, and environmental impacts” (Bergren Miller 2014).

According to a French Environment Agency (Ademe) study on carpooling30 published in September 2015, the practice has become increasingly popular since 2013 and BlaBlaCar has played a key role in mainstreaming this practice in France. Ademe figures show that 70% of respondents had never used carpooling before signing up for BlaBlaCar and only 5% of re-spondents were registered on another platform. Furthermore, the Ademe study shows that the carpooler profile has evolved and it now appeals to a wider demographic. Back in 2009, carpooling users used to consist almost entirely of the stu-dent community. However, by 2015, the mean age of users has risen to 33. It is also worth noting that carpooling has shifted from being a service used predominantly by urbanites to increased popularity in rural areas (16% of respondents). In addition, the spectrum of BlaBlaCar users is increasingly varied: 71% of users are professionals, 13% are students, 13% are unemployed and a rising segment are retired (3%) who are being introduced to BlaBlaCar by their grandchildren. According to the same survey, the perception of carpooling in France is very positive: users polled describe the service as good value, friendly, convenient and environmentally friendly.

By and large, BlaBlaCar has helped carpooling become main-stream by making it safer, easier and more reliable (than hitch-hiking for example), in much the same way Airbnb and Uber have done in their sectors, by reassuring both sides of a transaction that the other person they are dealing with can be trusted. On the other hand, trains are very expensive in some countries like France and coach transport is not convenient (or does not exist) and has been criticised by consumers. According

to ESADE marketing professor Gerard Costa, “The millennial generation is used to consuming and sharing their experience with their social media community. This trend [...] is supported by consumers. If Uber is not allowed, then BlaBlaCar will serve the purpose; if it is banned then another player will emerge to fulfill that service” (Rodríguez de Paz 2015).

Collaborative economy expert Arun Sundararajan argues that “People below the age of 30 are much more likely to identi-fy with their mobile and computing devices than their cars…. Autos just aren’t the identity-making purchase that they once were.” Not surprisingly, more than half of millennials report being open to sharing rides with others, according to a study from the Penn Schoen Berland research firm (Naughton 2015). According to Susan Shaheen, a transportation expert at the University of California, Berkeley, each vehicle that goes into a full-time car-sharing service, such as short-time rental company Zipcar, replaces four to six new car sales and postpones the purchase of up to seven more. The results contrast with the Ademe survey that concludes that the vast majority of French carpoolers (81%) have not changed their attitude with regard to owning a car although 13% (mostly under 30) stated that after carpooling they would put off passing the driving test or purchasing a car. Figures can invariably differ from survey to survey and from country to country. However, the fact that car manufacturers are monitoring global trends very closely and shifting their business models from product (car manufactur-ing) to service (carsharing) signals that consumer patterns are changing (from ownership to access) and in this context carpooling and BlaBlaCar is thriving (Naughton 2014).

One interesting issue to explore further in the light of the seemingly conflicting data available on potential behaviour change caused by carpooling is whether this practice can lead to an increased awareness of collaborative services and a deeper change in lifestyle. According to BlaBlaCar’s own data, environmental concerns rank third in the order of moti-vations for first-time BlaBlaCar users following money savings and social experience reasons. Interestingly, another survey commissioned by BlaBlaCar in April 2015 among 14,200 us-ers shows that environmental awareness increases fivefold as users repeat the service. Also according to BlaBlaCar’s own data, 19% of users started ridesharing to work after trying the service and a percentage of their community began using other online collaborative services after becoming a member of BlaBlaCar (between 1 and 6%). This suggests that by using BlaBlaCar, people become more aware of the benefits of col-

30 Agence de l’Environnement et de la Maitrise de l’Energie 2015, Enquête auprès des utilisateurs du covoiturage longue distance. Available from: <http://www.ademe.fr/enquete-aupres-utilisateurs-covoiturage-longue-distance>. [15 December 2015].

31

laborative services and are therefore more open to adopting new collaborative behaviours. However, Ademe’s report paints a different picture: Carpooling does not seem to lead to enhanced collaborative behaviours in other areas as the vast majority of carpoolers polled drive to work alone. Again, these apparent contradictions warrant a deeper independent analysis and may be a helpful future line of research.

BlaBlacar thrives in a climate of public transport inefficiency

BlaBlaCar’s ascent has come partly on the back of a deterio-rating public-transport system across the continent. Europe’s prolonged economic stagnation is depriving many governments of the ability to maintain, let alone broaden, transport networks. France’s national audit office has urged the national railway company, SNCF, to stop building new high-speed tracks because many existing lines generate losses. Germany, known for its high-speed rail network, is struggling with ageing fleets and tracks. In Portugal, the government recently had to shelve plans to build new bullet-train connections. According to AVUC,31 an association that advocates the use of French trains, BlaBlaCar seems to be the clear winner in this scenario. Its business model responds to the flaws in train travel many users have been complaining about for years: high prices and poor service (Bisserbe 2014).

In addition, BlaBlaCar has helped guarantee comprehensive road link cover in many regions, giving rise to a new transport grid that covers the gaps left by public transport. As a 2015 study com-missioned by BlaBlaCar shows,32 the platform provides enormous granularity: the 10 most popular BlaBlaCar routes in Spain amount to less than 5% of the monthly overall offer. Interestingly, in emerging markets, BlaBlaCar is making a significant contribution to solving public policy issues with solutions, which they could not entirely foresee before entering those markets. Despite its shortcomings, Europe has traditionally had a choice of transport options where-as in India and Russia, and to some extent in Turkey and Mexico, infrastructure is rather thin on the ground. In these countries, BlaB-laCar has started linking cities that do not have train connections, enabling a new layer of infrastructure. In India, in particular, the train network is so congested that it is nearly impossible to get a rail ticket. BlaBlaCar has signed a partnership with the Indian railway (IRCTC) to alleviate the saturation of the train system and divert high railway demand to road transport. BlaBlaCar is therefore helping mitigate public infrastructure shortcomings in emerging countries and entering into key partnerships to amplify its impact.

31 Association des Voyageurs-Usagers des Chemins de Fer.

32 Extracts shared with the author.


There are 239 million cars in the EU33 but they have always been underused. A car is the second highest value asset for an individual (after property) yet it sits idle 95% of the time and when on the road is often stuck in traffic. Critically, every day across Europe, 500 million car seats are left vacant. Against this backdrop, BlaBlaCar’s founder says: “It costs €5,000-6,000 a year to run a car in France, and there are 38 million cars, meaning €200bn is spent, amounting to 10% of GDP. Yet, 96% of the time the cars are parked and not moving… and three out of four cars that are moving have only one person on board. If this under-optimisation was applied to trains or buses, it would be considered nonsense” (Willsher 2015). Significantly, the trend is being reversed in the BlaBlaCar community, where the average car occupancy is 2.8 people, versus a European average of 1.2 (as low as 1.3 passenger per car in some countries). The occupancy rate is still rising as the community becomes even more efficient.

As the trends towards urbanisation intensify and the planet is expected to grow from current 7 billion people to near 10 billion by 2050, one increasingly pressing public policy issue focuses on making transport systems more efficient and sustainable in order to cope with overpopulation and congestion. As BlaBlaCar Spain co-founder Vincent Rosso discusses, subsidised universal service coach links, with few people occupying a coach to remote rural areas, may not be the most efficient way to manage congestion and public finances. He argues that we need macro-solutions in the form of public–private partnerships and he sees BlaBlaCar as well positioned to become a prominent player in helping solve this emerging societal issue.

Many of BlaBlaCar’s stakeholders single out carpooling as the purest collaborative economy form as costs are genuinely shared and a (car) space is shared among “strangers” who need to trust each other. According to consultancy Roland Berger,34 the positive impacts derived from BlaBlaCar’s activities include the following:

• Environmental protection: Carpooling reduces the number of cars on the road and hence cuts down CO2 emissions. Accord-ing to data provided by BlaBlaCar, over the past 12 months the company has saved one Megatonne of CO2 across all the coun-tries where it operates. In the past 5 years alone, BlaBlaCar users have saved 90.000 tonnes of CO2 emissions in Spain.

In April 2015, the International Board for Entrepreneurs and Busi-ness People awarded BlaBlaCar with the Entreps Environment Prize

for its contribution to CO2 emission savings. At the ceremony, the President of the European Economic and Social Committee, Henri Malosse, congratulated the company adding that it was “an excellent example of energy saving, environment protection and employment creation.” 35

• Enhanced road safety: According to BlaBlaCar’s own data, 93% of drivers are of the opinion that travelling with passengers keeps them awake and alert on the road. This is relevant as drowsiness is the first cause of accidents on the highway. Safety is also enhanced as passengers rate the driver’s driv-ing skills and the driver takes personal responsibility for the passengers in the car.

• Comprehensive road coverage: Carpooling involves the creation of new ad-hoc itineraries giving rise to a new grid with routes, which are not covered, or not covered adequately, by the public transport network.

• Cost of living: Carpooling helps both drivers and passengers travel at a lower price.

Environmental footprint

Amovens, BlaBlaCar´s Spanish car-sharing/pooling competing plat-form, lists a number of positive impacts of car-sharing/pooling including the reduction of urban congestion in the short term. In the long term, the practice of sharing cars may induce a shift in individuals’ travel behaviour and reduce the need for parking spac-es in the city. Another positive externality, according to Amovens, includes the powerful social bonds generated between car-sharers which enhance the community fabric and, as a result, have a positive impact on the functioning of urban centres.

A number of environmental benefits of generic shared mobility have been consistently documented, including reduced levels of vehicle ownership, usage, and vehicle miles travelled (VMT) (Bergren Miller 2015). Other potential benefits identified in a recent policy paper by the University of California, Berkeley’s Transportation Sustain-ability Research Center include eliminating gaps in existing transit networks (including the critical first- and last-mile vacancies) and reducing transport costs for households and individuals. In Europe, a case study was carried out in Lisbon to estimate car-sharing im-

2.1 soCiaL iMPaCT

33 The International Council on Clean Transportation 2013, European Vehicle Market Statistics, Pocketbook 2013. Available from: <http://www.theicct.org/sites/de-fault/files/publications/EU_vehiclemarket_pocketbook_2013_Web.pdf >. [15 December 2015]

34 Study commissioned by BlaBlaCar to consultancy Roland Berger in 2015 to assess economic, social and environmental impact of BlaBlaCar. Executive summary shared with the author.

35 BlaBlaCar, galardonada con el ‘Entreps Environment’ 2015, 2015. Available from: <http://www.europapress.es/sociedad/medio-ambiente-00647/noticia-BlaBla-Car-galardonada-entreps-environment-2015-20150416150157.html>. [15 December 2015].

33

pacts and the effects of a possible technology change. The results demonstrate that those benefits can represent reductions of 35% to 47% in terms of energy consumption and 35% to 65% for CO2 emissions, if a shift to hybrid vehicles or to electric vehicles is promoted, respectively (Baptista 2014). All these studies look at car-sharing, and some of their results may be extrapolated, but the reality is that there is a dearth of independent and reliable studies focused on carpooling and the environmental and social impact and its possible “rebound” or “boomerang” effects. The aforementioned study on carpooling conducted by the French Environment Agency (Ademe) finds that 21% of drivers polled say that without carpool-ing they would travel less frequently while acknowledging that “by allowing passengers to travel more car-pooling creates a rebound effect which has not been quantified yet”. Indeed, the net social and environmental balance of carpooling is difficult to measure for a number of reasons: these shared mobility platforms are quite new, the competitors are often public transport providers with univer-sal service obligations, standardised indicators and benchmarks to measure carpooling impacts have not been established, and, critically, there is a lack of financial/usage data from carpooling providers (and collaborative economy platforms in general) which are often very cautious about public scrutiny. This lack of mean-ingful data has a knock-on effect on policy makers’ awareness and consequently appropriate public policies cannot be designed to amplify the positive impacts of carpooling. In this context, it is noteworthy that Uber and Lyft have agreed to share their ridership activity data for the purposes of a new study announced by the Nat-ural Resources Defense Council and UC Berkeley’s Transportation Sustainability Research Center (TSRC) to analyze the environmental impact of Uber and Lyft in the US (Hawkins 2015). BlaBlaCar could helpfully follow suit and share their data with academia and other independent organisations that could shed light on their overall impacts in Europe where it already has a critical mass.

Social capital

As for the purely social impacts of BlaBlaCar, the company empha-sises that their activity has an intrinsic and a very powerful social cohesion value, i.e. it generates social capital. By offering low-cost transportation for passengers, it creates demand for and access to affordable transport, particularly for those who cannot afford

high travel costs or who don’t own a car. According to BlaBlaCar estimates, 150 million Europeans do not own a car36 and thus the platform provides this massive population group access to a private vehicle and to low-cost travel. Another key aspect in the realm of social capital is the granularity afforded by BlaBlaCar. Indeed, the platform provides routes to areas which are not covered or are not easily and conveniently accessible by public transport. For example, in Spain 60% of journeys listed on BlaBlaCar do not have a direct equivalent by public transport. Furthermore, BlaBlaCar increasingly offers door-to-door solutions for less frequent routes which other-wise may require an unworkable number of transfers for a number of people. In this vein, BlaBlaCar’s UK Country Manager says: “We can become a relevant alternative to trains. We have more departure times, we’re faster, we’re cheaper and we have more routes. Eventu-ally, we’ll have so many drivers that our service will be door-to-door” (Davidson 2015).

Other positive social impacts noted by some stakeholders include the social bridge BlaBlaCar affords by mixing people together from diverse generations, incomes and backgrounds. Some interview-ees37 have likened the BlaBlaCar experience to a “military ser-vice-type” social immersion for the kind of lifelong memories and friendships many young men shared when doing their compulsory stint in the army.

Finally, in an OCU (the leading Spanish consumer organisation) comparative study of collaborative economy platforms,38 35% of analysed companies were found to be purely transaction-based, 55% created solid social networks among their users and 10% based their model on a transformative paradigm. OCU situates BlaBlaCar in the second category (“Connects Users”) along with other well-designed international software platforms like Airbnb, whereby its value lies in the connection it affords its users based on common interests and online reputation. BlaBlaCar rates very well on most indicators (top marks on Trust and Liability), however it fails on the “community footprint” i.e. whether or not the platform considers core its mission to redistribute wealth or its commitment to society and the environment. In the case of BlaBlaCar this “com-munity footprint” is deemed “basic” as it is organized around the concepts of efficiency and money saving and not a truly socially transformative mission.39

36 The figure is calculated as follows: 500m inhabitants (400m over 18yo) -> 250m passenger car fleet in Europe -> Roughly 150m Europeans don’t own a car

37 Vincent Rosso and Albert Cañigueral.

38 Conducted in 2015 with Consumer Organisations from Belgium, Italy and Portugal and the support or OuiShare. It analysed over 50 collaborative companies opera-ting in Europe. Full study will be published in January 2015.

39 OCU, 2015, ¿Colaboración o negocio? De todo hay. Available from: <https://dl.dropboxusercontent.com/u/32281041/Colaboración%20o%20negocio%20%20Estu-dio%20OCU%201-12-2015.pdf>. [15 December 2015].


“The goal is to build the biggest ground-transport company in the world in terms of passengers transported” (BlaBlaCar Co-founder and COO Nicolas Brusson).

Growth milestones

Frédéric Mazzella started the platform www.covoiturage.fr in 2004 but success was not immediate. Between 2006 and 2011, Mazella tried out six business models before developing a business plan around the idea of an online hub for “social travel” (“Expedia meets Facebook”). It took about two years for a critical mass of users to start using the site.

The turning point came in 2007 when a series of strikes crip-pled the French transport system. A well-timed press release communicating that BlaBlaCar was open for business attracted significant media attention. According to BlaBlaCar co-founder Nicolas Brusson, “the influx of users meant suddenly the service worked”. For the first time, people were saying things about the service such as “useful, interesting, low-cost, and efficient.” After that, the business continued to grow, opening an office in 2009 and hiring its first employee (Hickey 2014).

Another milestone came with the eruption of the Icelandic volca-no Eyjafjallajökull in April 2010, causing massive disruption to European air space which led to cancelled flights and sold-out trains. BlaBlaCar stepped up and saw a massive surge in the use of their carpooling platform. Stranded travellers realized that their next best option was to catch a ride in a stranger’s car rather than wait for space to free up on trains and planes. This incident catapulted BlaBlaCar into the public psyche, not only in France but also throughout Europe, as a smart travel solution.

Since 2006, the company has expanded its footprint in Europe with several acquisitions of existing carpooling companies in Italy, Poland, France, and Russia. In April 2015, BlaBlaCar an-nounced two additional acquisitions of Germany’s Carpooling.com and Hungary’s Autohop, which helped BlaBlaCar establish their presence in Germany, Hungary, Romania, Serbia, and Cro-atia. More recently, BlaBlaCar acquired Rides in Mexico (April 2015) and Jizdomat in Czech Republic and Slovakia (January 2016). The acquisition of Carpooling.com was a critical mile-stone for BlaBlaCar in the pursuit of its aggressive expansion strategy to become the company’s stated goal of “the world’s leading long-distance ridesharing platform.” Founded in 2001, Carpooling.com was the biggest and oldest player in Germany and BlaBlaCar’s biggest competitor with 6 million members be-fore the acquisition. Through this acquisition strategy, BlaBlaCar

doubled its membership from 10 million in 2014 to the current 20 million (2,5 million in Spain alone). The company now links more than 10 million travellers each quarter, making it the fastest growing collaborative consumption company in Europe.

Business model

BlaBlaCar is currently focusing on building a global brand to generate critical mass in different countries rather than on short-term profitability. In this sense, co-founder Brusson says, “I’d rather have 200 million or 500 million people ride-sharing globally in six years and not be profitable but knowing that we can be as opposed to trying to optimise today”(Cowan 2015). Thus, the business model is based around creating a large European footprint and then a massive global footprint in order to subsequently make the business profitable. BlaBlaCar has introduced a fee in those countries where it has already reached a critical mass. The commission is charged to the passen-ger, typically 10%-15% of the booking price, and is processed through the online booking system (see Table 2). Currently BlaBlaCar charges a fee in France, Spain, Portugal, UK and the Netherlands. The fee has been introduced in each country within a different timescale and depends on the maturity of the community and the liquidity of the most popular routes. In other countries, such as Turkey and Russia, where BlaBlaCar started operations in 2015, it does not charge a fee yet but will quickly shift to the paying model.

Table 2. BlaBlaCar’s platform fee

How is the commission calculated?

When a passenger makes an online booking, he/she makes a contribution towards the ride’s shared costs and also pays a platform fee which is broken down as follows:

• A fixed fee (0,79 €).• A variable fee (8,9% of the amount passengers pay

to the driver). This covers banking costs, SMS/email and platform costs.

• VAT (according to the country), applied to the aggre-gated costs (fixed and variable).

In order not to penalise shorter journeys, the fee is capped at 20% of the booking price.40

2.2 finanCiaL sUsTainaBiLiTY

40 n.d., BlaBlaCar Frequently Asked Questions. Available from: <https://www.BlaBlaCar.es/faq/pregunta/a-que-corresponden-los-gastos-de-gestion-para-cada-reserva>. [15 December 2015].

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Growth strategy and success drivers

BlaBlaCar’s expansion strategy has been referred to as “ac-qui-hire” as it focuses on making small acquisitions and setting up local offices with local talent. That is how they launched in Italy, Poland, Russia and Mexico. BlaBlaCar consistently emphasizes the importance of individually targeting Europe-an countries and customising the company’s mission to local culture (Dillet 2015).

Key to BlaBlaCar’s success has been the decision to cap the number of passengers to four and to cap the price that a driver is allowed to charge, i.e. up to 50% of the rate recommended by the web, in order for the passengers to simply share costs and thus for the service to avoid being of a commercial nature. This strategy helps the company steer clear of regulatory hurdles and ensures that there are no tax or insurance issues for drivers and passengers to grapple with. Furthermore, their focus on lightly regulated (or unregulated) inter-city travel has negated the need to comply with burdensome city transport regulations while avoiding conflicts with the belligerent taxi sector.

Some stakeholders have identified starting off and hitting a critical mass in France as a success driver in itself. Unlike Germany, France had no carpooling tradition and therefore had perception and security barriers to overcome. As a result, BlaBlaCar has had to work harder on developing trustworthy reputation systems and educating the public. Another key ele-ment to explaining its success in France is the fact that BlaB-laCar had no competition from long-distance coaches, which were not allowed to compete with the national railway company (SNCF). Furthermore, in France there are a number of big and middle-sized cities which need low-cost transport links, public transport is chaotic and strike-prone, train prices are steep and driving costs are high. All these elements create strong practical and financial incentives for sharing. In this context, BlaBlaCar has grown to dominate 90% of the French market to the point that the president of SNCF identified it as a competitor last year. BlaBlaCar co-founder Nicolas Brusson has famously said, “When you start from France, everything else looks simple.”

Company value

BlaBlaCar is not a publicly listed company so it does not pub-lish financial data. The founders decline to discuss revenues, but some trade journals have done the maths. According to Business Insider (Edwards 2015), BlaBlaCar’s revenues could currently be in the region of $96 million annually. This is cal-culated as follows: 10 million travellers per quarter x $20 per average trip x four quarters x 12% cut = $96 million. In comparison, Uber’s annual revenue in 2015 is estimated at $10 billion. Yet, Uber does more rides and takes a larger cut than BlaBlaCar at 20%. BlaBlaCar has been venture-funded so far with $335.6 million in investments from Accel, Cabiedes & Partners, Index Ventures, Insight Venture Partners, Isai, Lead Edge Capital, and Vostok New Ventures Ltd. Their last round of funding was held in September 2015 when they raised $200 million. That brings its valuation to $1.6 billion, which is rather impressive for a company that has around 10 million travellers per quarter. Forbes says it “stands out as one of the most well-funded young tech companies in Europe.” (Chen 2015).


Effective branding and positioning

BlaBlaCar was originally called covoiturage.fr, the French word for “carpooling”, and its app was called Comuto, also the name used for the service in Spain. They soon realized that in order to build a cohesive global brand they needed a single name that worked everywhere. BlaBlaCar’s name came from a central feature invented to smooth over a business difficulty encoun-tered: members could be uncomfortable riding with people who were too talkative or quiet. Now they rate themselves “bla”, “blabla” or “blablabla” accordingly. Likewise, Spain’s BlaBlaCar founder highlighted the communications strategy as one of the company’s key growth factors. Indeed, a Brand Awareness Survey conducted in Spain by a research company found that BlaBlaCar was by far the most recognisable collaborative econ-omy company in Spain (54,4%), well ahead of Uber (18,3%) with Airbnb lagging behind at 7,8%. Some stakeholders have also pointed out that BlaBlaCar has benefited greatly from jumping on the collaborative economy bandwagon. Even though BlaB-laCar was set up well before the collaborative economy had taken off in earnest, they were able to position themselves to benefit from its halo effect.

The business of trust

Creating a community of trusted members has been key to BlaBlaCar’s growth. Co-founder Nicolas Brusson claims that BlaBlaCar is not really in the low-cost transport business but in the trust business. The savings aspect of carpooling is straightforward but the innovation lies in the way trust is created and maintained. Brusson says, “The magic really takes place within the community. By providing profiles of themselves and carefully rating their experiences, the members do most of our job for us” (Adams 2015). Unlike what occurs when you rent a flat or a spare room where you may not even meet the owner, trust is ever so important in carpooling as you are sharing a car with a “stranger” in physical proximity and your life may literally depend on their driving abilities. BlaBlaCar has developed a collaborative economy trust framework called D.R.E.A.M.S. (and even a superhero!)41 to share their vision with stakeholders. It stands for Declared, Rated, Engaged, Activity-Based, Moderated and Social. After years of market experience, BlaBlaCar con-cluded that those are recurrent components that create trust in online sharing marketplaces when deployed. Consistent with this, the aforementioned OCU survey gives BlaBlaCar first top

marks in trust/online reputation among those companies anal-ysed. Interestingly, in the view of other stakeholders, BlaBlaCar has not “reinvented the wheel” as they use the same trust mechanisms designed by Couchsurfing and thus BlaBlaCar has simply repackaged the same product.

According to Spain’s country manager, the currency of trust is essential and it involves providing that information which will reassure and empower the users, which varies from one cul-ture to another. Interestingly, in some countries like India, the LinkedIn Connect feature was important in this regard, while in Turkey they conduct ID checks for enhanced safety. Surveys to the community found that the more users fill their online pro-files, the higher trust levels they reach, which in turn empowers them to transact with one another. This is a virtuous circle, as the community expands and grows bigger. Price transparency is another key advantage of collaborative carpooling sites like BlaBlaCar. The price is known beforehand, which can prevent some common occurrences like tampering with the counter or taking overly long, circuitous routes. Likewise, the benefit of increased information is clear when you know in advance the identity of your driver, their reviews and the car’s main features.

Unlike other collaborative economy companies, BlaBlaCar has had relatively few “horror stories” reported in the media. In 2014, a 49-year-old man was arrested by French police on suspicion of sexual assault after a female BlaBlaCar passenger alleged she had been drugged. The company responded by introducing a function for reporting bad practices. A feature called “Ladies Only” had already been introduced to allow for cars where both the drivers and passengers are female. Data shared by BlaBlaCar shows that in Spain there is a balanced number of men (58%) and women (42%) among its members, which may suggest that fears about safety have been partly overcome.

Self-regulation and platform security

Aware of the critical importance of protecting their sharing-cost business model, BlaBlaCar has developed a robust vetting system to ensure that there is no commercial activity on the platform. We list its main features in Table 3:42

2.3 innoVaTion TYPe

41 BlaBlaCar’s D.R.E.A.M.S. framework is available on: www.betrustman.com/

42 Adaptation from Roland and Berger study on BlaBlaCar’s platform, Sept. 2015

37

Table 3. BlaBlaCar’s self-regulation mechanisms

Not-for-profit carpooling policy:

• The contribution drivers can request for shared costs is capped at 50% of the suggested price.

• The number of seats that can be made available is also capped (4).

• There are upper limits for the per-seat-contribution requested by the driver and colour codes to show degree of closeness to the suggested price.

• The platform does not allow users to offer opportu-nistic routes based on existing demand.

There are control mechanisms to ensure compliance:

• Terms and Conditions of Use, frequent reminders of company policies, straightforward communication with users etc.

• Three-strike process for suspicious behaviour: Verify, Identify, Suspend,.

• Protection against offenders who want to re-enter the platform.

• Significant human resource allocation (21% world-wide) have compliance/community-management responsibilities.

BlaBlaCar verifies email addresses, phone numbers, bank de-tails and Facebook profiles, and moderates all content online. When a ride is posted, the driver must declare that he or she holds a driving license and insurance, but BlaBlaCar doesn’t verify insurance or the driver’s record. Instead, it relies on input from the BlaBlaCar community, encouraging members to take an active role in rating each other. According to BlaBlaCar’s data, 80,000 ratings are left on the site every month, 98% of which are positive experiences according to reviews. A mere 0,5% of users have been blocked or muted. Interestingly, BlaBlaCar announced in December 2015 that it was following Airbnb’s lead in implementing the simultaneous publication of reviews (both of the driver and the passenger) in a bid to curb false or overly favorable evaluations and thus reinforce trust in the review system (Esaín 2015).

Booking model and insurance

Other examples of innovations introduced by BlaBlaCar men-tioned by interviewed stakeholders include the booking model and the additional insurance. BlaBlaCar observed that some passengers were booking trips and not showing up. Drivers began to lose faith and would double book, resulting in mistrust from potential passengers that could threaten the whole sys-tem. In 2011, BlaBlaCar deployed a booking model in France, which has been later on extended to other markets, with a penalty for no-shows in exchange for a fee. The introduction of the credit-card booking functionality reduced no-shows and last-minute cancellations by a factor of 10, i.e. from more than 35% to only 3% of bookings today. Likewise, in May 2015 BlaBlaCar announced the launch of a partnership with AXA to provide its users with free additional insurance (see Table 4). It is initially available in France, UK, Spain, Italy and Germany.

Table 4. AXA - BlaBlaCar Insurance coverage

The AXA – BlaBlaCar partnership provides additional insurance with the following components:

• Breakdown coverage and onward travel: Paid-for alternative transport options to ensure that pas-sengers and drivers reach their destination.

• Passengers are insured to drive. Any additional in-surance fees are covered.

• Found objects retrieval.• Legal advice.


Government support

As Jef Cozza shows in his research on the history of carpooling mentioned above, the partnership between the private sector and the government, together with a substantial awareness campaign, have proved extremely effective in prompting a shift of consumer behaviour with regard to carpooling. We are now witnessing the latest wave of carpooling, which is emerging as part of the growing collaborative economy. In some countries, like France, the UK and even India, governments have had the foresight to promote assisting policies for carpooling as they have a vested interest in reducing traffic. The UK in particular has been very proactive in the promotion and regulation of the sharing economy as a key driver for economic development and innovation. Paradoxically, BlaBlaCar is not widely popular and carpooling practices are not widespread in the UK. However, in some Southern European countries where users have taken to carpooling and BlaBlaCar in greater numbers, there is still a regulatory vacuum and ensuing legal disputes as a result of a lack of awareness among policymakers on the wider benefits to society and the environment. While Germany and France define the term “car-sharing” in law, Spain does not yet have a clear legal definition of the practice.

BlaBlaCar has become a poster child for the successful shar-ing-economy startup and is treated almost as a national cham-pion. The Minister for the Environment, Ségolène Royal, has been interviewed alongside the founder who has also attended international events with French President François Hollande and the Minister for the Economy, Emmanuel Macron. A Green politician even announced that she would forgo the use of a personal vehicle and official chauffeur in favour of collaborative mobility platforms like BlaBlaCar during the campaign for the last regional election.43 In addition, one of the key pieces of legislation passed by President Hollande, the Energy Transition Act, includes the need to promote carpooling. There is also draft legislation in France within the Energy Efficiency Framework which sets forth toll rate reductions for shared cars.

In 2011 in Spain, BlaBlaCar signed a partnership agreement with the Ministry for Industry and Telecommunications to pro-mote carpooling and car-sharing with a view to enhancing energy efficiency and reducing CO2 emissions. The Ministry has also funded projects geared towards increasing the occupancy of car seats. BlaBlaCar’s competitor in Spain, Amovens, even signed a partnership with a local Basque Country Government to create

a collaborative economy platform in the region.44 However, accord-ing to stakeholders, after a great deal of effort and expectations, these public policy initiatives have not amounted to much. Tellingly, carpooling companies interviewed only wish to be “left alone” to get on with their business without much government interference. In this context, interviewees underline that their model needs to be understood as “pure collaborative economy that should not be regulated like other collaborative economy models”.

According to co-founder Nicolas Brusson, Europe has always innovated in the transport sector and expects more support coming from the public sector in this direction in the future. In France, there are pick-up points in some cities, which could be replicated in other countries. BlaBlaCar is currently exploring options for a European funded project to establish shared pick-up /drop-off points for carpooling in strategic parts of large cities in different European countries which they hope will be supported by both public and private partners (Torregrossa 2014).

Public transport and carpooling

It is important to acknowledge that carpooling and the public transport network are two interdependent systems. For car-pooling to be successful you need good public transport within cities to take care of the first part and the last part of the journey, the so-called “first mile, last mile”. The Ademe report confirms that interdependence: “Public transport is the main transport used by carpoolers to reach the meeting point: 44 % of the polled carpoolers used public transport”. This insight is very significant as it shows how government public spending and infrastructure decisions can either encourage new businesses like BlaBlaCar or prevent them. Co-founder Nicolas Brusson says “BlaBlaCar is huge in Germany because it’s easy to get around without a car in most cities. And while train links between German cities are good too, BlaBlaCar opens up a new market of riders who want to make those same journeys at a fraction of the train cost”. The lack of a well-developed public transport network is precisely the reason why carpooling has not taken off in the US. Brusson says: “It turns out that the US’s lack of public transport infrastructure in most cities hobbles BlaBlaCar from developing there while giving an artificial boost to Uber […] because Uber is replacing a lack of public transport” in the US (Edwards 2015).

2.4 Cross-seCTor CoLLaBoraTion

43 Una política francesa renuncia al chófer para pasarse a BlaBlaCar. Available from: <http://noticias.infocif.es/noticia/una-politica-francesa-renuncia-al-chofer-para-pa-sarse-BlaBlaCar> [15 December 2015].

44 Available from: http://moveuskadi.amovens.com

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Partnerships with the private sector

Partnership with totalIn France, BlaBlaCar has signed an agreement with oil company Total in the context of a White Certificate Scheme45 related to the EU objective of increasing energy efficiency by 20% in Eu-rope by 2020. White certificates are documents certifying that a certain reduction of energy consumption has been attained. France has implemented a White Certificate Scheme whereby it passes the obligation to achieve energy savings targets on to energy providers with a view to inducing end users to engage in energy efficiency measures. One of the ways fuel retail com-panies create energy savings and obtain their White Certificate from the government is by partnering with companies that promote energy savings, and carpooling is recognised as an energy-saving form of transport by the French administration. As part of the partnership agreement, Total aims to encourage drivers to carpool by offering fuel vouchers worth €20 to any driver publishing their first ride via BlaBlaCar’s online booking system. According to BlaBlaCar sources, this has been a highly beneficial partnership for BlaBlaCar as the voucher/financial incentive has helped unlock tremendous growth46 in the seg-ment of first-time drivers. Indeed, many first-time users were discouraged off the platform if they did not attract interest the first time they used the service, and the voucher incentive has helped them persevere. BlaBlaCar is currently studying establishing similar partnerships in Italy and Spain.

Partnership with VinciIn March 2015, BlaBlaCar and Vinci Autoroutes (France largest motorway operator) signed a partnership called “Temps Libre Covoiturage” (Free-time rideshare) to promote and encourage carpooling on the motorway through an innovative automatic toll payment service (see Table 5).

Table 5. BlaBlaCar -Vinci partnership

The partnership agreement includes:

• A new automated toll payment whereby BlaBlaCar users are entitled to a free télépéage (electronic tolling service) card worth €2. The card is valid for two long-distance carpooling trips a month booked on BlaBlaCar and made on the Vinci Autoroutes network.

• The provision of 19 designated carpooling car parks (a total of 1500 spaces) across the Vinci Autoroutes network, and, over time, the creations of secure meeting points for drivers and passengers on park-ing areas located near toll areas.

• Carpooling encouraged and promoted to all Vinci Autoroutes customers.47

Partnership with BoursoramaIn December 2015, the online bank Boursorama (part of Société Générale) announced a partnership to offer financial benefits to BlaBlaCar members. Specifically, Boursorama will offer €50 when a customer opens a bank account and savings of up to €150 through this partnership. Boursorama will have access to 8 million BlaBlaCar members, one third of whom are under 25 and the bank target group.48 BlaBlaCar benefits from this partnership by offering an increasing number of services to its money-sensitive community while receiving free advertising at a time where competition for carpooling is mounting. Indeed, the SNCF has acquired a number of carpooling platforms and in 2014 launched its shared mobility intermodality platform IDVroom to cover their trains passengers’ “last mile” (Bianchi 2015).

Finally, it is also worth noting that BlaBlaCar is signing com-mercial agreements with other traditional companies, like travel agents and Meta search engines (e.g. Rumbo, Destinia, Kayak, eDreams), in order to offer users the option to book BlaBlaCar trips, alongside other traditional travel options, through their own platforms.

45 Ministère de l’écologie, du développement durable et de l’énergie, n.d., Certificats d’économies d’énergie Available from: <http://www.developpement-durable.gouv.fr/-Certificats-d-economies-d-energie,188-.html> [15 December 2015].

46 BlaBlaCar declined to disclose any data in this respect but claims that user retention has been very significant as a result of voucher scheme with Total.

47 Vinci Autoroutes partners with BlaBlaCar to encourage ridesharing on the motorway. Available from: http://en.sites.vinci-autoroutes.com/en/article/vinci-autorou-tes-partners-BlaBlaCar-encourage-ridesharing-motorway>. [15 December 2015].

48 Boursorama Banque lance la première offre bancaire dédiée aux covoitureurs membres de BlaBlaCar, 2015. Available from: <http://www.boursorama.com/actualites/boursorama-banque-lance-la-premiere-offre-bancaire-dediee-aux-covoitureurs-membres-de-BlaBlaCar-42b4b3f37c51ebfc29a8abf8126c2162>. [15 December 2015].


“ […] Doing a European expansion should be easier. It’s almost as hard for a European company to scale in Europe as it is for a US company” (BlaBlaCar co-founder and COO Nicolas Brusson).

From French startup to a global company

According to Eurostat statistics, 76% of journeys in Europe are made by car and cover a distance of more than 100 km. With an average car only carrying 1.2 people, BlaBlaCar not only targets a large market but also the largest excess capacity in the transport industry. Frédéric Mazzella says: “We knew since our early days that we needed to provide a global solution if our members were to be fully satisfied with our platform. Our mem-bers are increasingly able to share rides with one same mobile application worldwide49. “The company has acquired 7 ridesharing and carpooling companies, has 10 million travellers a quarter and operates in 22 countries. With 2 million travellers a month, the multiplier effect of a growing viral community is striking.

For Blablacar to keep expanding, the real challenge now is around how to raise awareness among drivers across Europe and other places where most car owners don’t know about or consider offering empty seats to people who might be interested in hitching a ride (Wouters 2014). Co-founder Nicolas Brusson acknowledges that the platform is highly scalable provided they offer the right level of education to users: “We asked ourselves: is it a French phenomenon? We proved that it was not. We then asked: is it a European phenomenon? No. We are about to launch in Brazil, India and elsewhere. It is a platform that works wher-ever people have cars.”50 He goes on to argue that investors’ focus is on existing markets, but when you do something truly innovative the market does not exist, and BlaBlaCar is creating those replicable markets where there were none.

Other barriers for user adoption identified in interviews include: security (road and personal safety), dislike of cars and lack of comfort, the absence of pick-up points in cities, a perceived excess of flexibility versus scheduled public transport, social awkwardness and the difficulties of reaching those not online. Interestingly, the need to balance the interests of the sharehold-ers and the users, in a context of massive capital injections, was also mentioned as key for the sustainability of the model.

Through trial and error, BlaBlaCar learned from earlier nonscal-able models, like the B2B commuting corporate platforms, and focused on the current long-distance peer-to-peer business model. Spain was the first country that proved the scalability of the model in a market with carpooling competitors. User uptake was three times faster in Spain than it had been in France, which is key information for an investor to prove the replicability of the model. With regard to the expansion strategy, founder Frédéric Mazzella says: “We want to reach economies of scale, so we are looking at big countries. We look at the price of gas, the state of transport in general, and how people are connected — are they using their smartphones? — then we make a call on whether it can work” (Russell 2014). Added to this is the question of the reliance on local teams on the ground, which is central to the acqui-hire strategy that has been widely used to replicate the model in new markets.

To succeed, the company needs a critical mass of users, which it has achieved in France, Spain and Belgium. BlaBlaCar entered Russia in 2014 and has been overwhelmed by its staggering growth. “There was scepticism at first but BlaBlaCar reached 1 million users within 10 months. No other European country has had that level of growth after its launch.”51 Meanwhile, the United States is not on the company’s short-term horizon. Co-founder Nicolas Brusson says market dynamics are less compelling in the US, where petrol prices are comparatively lower than in other countries, highways have very few tolls, and culturally carpooling is less widely accepted. However, co-founder Brusson sees a shift towards a more entrenched col-laborative economy culture in the US, and says certain markets such as the Northeast, where train and air travel is common and expensive, could make sense (Korosec 2015).

Tapping into emerging markets

In the past year, BlaBlaCar has focused on expanding beyond Europe and into emerging markets. The company has discov-ered that demand for long-haul ridesharing in emerging markets like Turkey, India, and Mexico is much bigger than it ever antic-ipated. The company is thus accelerating its global expansion into Brazil, where it launched in late 2015, and other big Latin American countries such as Chile, and eventually plans to expand across Asia. In 2016 BlaBlaCar will invest in Asian

2.5 sCaLaBiLiTY anD rePLiCaBiLiTY

49 OECD Observer, 2014, Interview to Frédéric Mazzélla. Available from: <http://m.oecdobserver.org/news/fullstory.php/aid/4648/A_sharing_economy.html> [15 December 2015].

50 Quoted above: http://www.theguardian.com/society/2015/nov/29/future-of-work-gig-sharing-economy-juggling-jobs?CMP=share_btn_tw

51 Cuando la recesión aprieta... Airbnb enseña a los rusos a volver a compartir, 2015 Available from: <http://www.eleconomista.es/economia/noti-cias/7119619/11/15/Cuando-la-recesion-aprieta-Airbnb-ensena-a-los-rusos-a-volver-a-compartir.html>. [15 December 2015].

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markets including Japan, Korea, Indonesia, and Thailand. The company will evaluate China as a separate market and see if it makes sense to expand there.

Still, BlaBlaCar is not considering going public for a few more years as it is focusing on this period of growth. Frédéric Maz-zella says, “We are growing fast but it is important to take in that growth and not to burn steps. We are hiring and our teams grows twofold every year” (Hebert 2015).

Carpooling and the future of mobility

“I think that all cars will go fully autonomous in the long-term. In 20 years, any cars that are being made that don’t have full autonomy will have negative value. It will be like owning a horse. You will only be owning it for sentimental reasons” (Elon Musk, CEO Tesla).

It has often been said that the invention of the car was the “sav-iour of the horse”—as the engine became more widely used, horses became beloved and well looked-after animals used for leisure, rather than just tools for transport and industry. Similarly, Musk thinks non-autonomous cars will go the way of the horse. They’ll be driven for pleasure in certain settings, but certainly won’t be seen as useful transport options (Thompson 2015). This prediction is supported by a study published by the International Transport Forum at the OECD which claims that a fleet of self-driving shared cars could make 90% of conventional cars in mid-sized cities superfluous. Self-driving shared vehicles could take 9 out of 10 cars off city streets. Even during peak hours, only one third (35%) of the current number of cars would be needed to provide the same number of trips as today.52 BlaBlaCar does not seem worried: “There will be a mixed universe of cars for many years to come, as there will always be people who enjoy driving. The autonomous car will not affect BlaBlaCar as there will always be an owner who would like to share to make it more efficient” (Romero 2015).

52 International Transport Forum, Self-driving shared vehicles could take 9 out of 10 cars off city streets, 2015. Available from: <http://www.internationaltransportforum.org/Press/PDFs/2015-04-30-CPB-selfdriving.pdf> [15 December 2015].


ADAMS T, 2015, ‘My father had one job in his life, I’ve had six in mine, my kids will have six at the same time’. Available from: <http://www.theguardian.com/socie-ty/2015/nov/29/future-of-work-gig-sharing-economy-ju-ggling-jobs?CMP=share_btn_tw> [15 December 2015].

BARRAL L M, Moraño X, 2014, Relevancia de la economía co-laborativa en la opinión pública española. Available from: <http://www.slideshare.net/twomuchrs/economia-co-laborativaopinionpublicaespaa>. [15 December 2015].

BAPTISTA, P 2014, Energy, Environmental and Mobility Impacts of Car-sharing Systems. Empirical Results from Lisbon, Portugal. Available from: <http://www.sciencedirect.com/science/article/pii/S1877042814000366>. [15 December 2015].

BERGREN MILLER, A 2014, New Research Points to Successes, Cha-llenges of Shared-Use Mobility. Available from: <http://www.shareable.net/blog/new-research-points-to-successes-cha-llenges-of-shared-use-mobility>. [15 December 2015].

BERGREN MILLER, A 2015, TSRC Publishes Indispensable Primer on Shared Mobility. Available from: <http://www.shareable.net/blog/tsrc-publishes-indispensable-pri-mer-on-shared-mobility>. [15 December 2015].

BIANCHI F, 2015, Pourquoi Boursorama, Total ou Axa sont si généreux avec BlaBlaCar. Available from: <http://bfmbu-siness.bfmtv.com/entreprise/pourquoi-boursorama-to-tal-ou-axa-sont-si-genereux-avec-BlaBlaCar-935267.html> [15 December 2015].

BISSERBE, N 2014, France’s BlaBlaCar Gains Traction. Available from: <http://www.wsj.com/articles/carpooling-service-ex-pands-across-europe-1419538372>. [15 December 2015].

CHEN L, 2015, Meet Europe’s Newest Unicorn: BlaBlaCar Rai-ses $200 Million At $1.6 Billion Valuation. Available from: <http://www.forbes.com/sites/liyanchen/2015/09/16/meet-europes-newest-unicorn-blablacar-raises-200-million-at-1-4-billion-valuation/>. [16 December 2015].

COWAN M, 2015, BlaBlaCar has turned ride-sharing into a mul-ti-million-euro business. Available from: <http://www.wired.co.uk/magazine/archive/2015/05/features/Bla-BlaCar/page/4>. [15 December 2015].

COZZA, J 2012, The History of Carpooling, from Jitneys to Ri-desharing. Available from: < http://www.shareable.net/blog/the-history-of-carpooling-from-jitneys-to-ridesha-ring>. [15 December 2015]

DAVIDSON L, 2015, Ride-sharing app BlaBlaCar raises $200m to become Europe’s latest unicorn. Available on: <http://www.telegraph.co.uk/finance/newsbysector/transport/11869262/Ride-sharing-app-BlaBlaCar-rai-ses-200m-to-become-Europes-latest-unicorn.html>.[15 December 2015].

DILLET R, 2015, BlaBlaCar Acquires Its Biggest Competitor Car-pooling.com To Dominate European Market. Available from: <http://techcrunch.com/2015/04/15/BlaBlaCar-acqui-res-its-biggest-competitor-carpooling-com-to-dominate-eu-ropean-market/#.ibkoqd:WvBH>.[15 December 2015].

EDWARDS J, 2015, Why America may never see one of Euro-pe’s hottest tech startups. Available from: <http://uk.bu-sinessinsider.com/BlaBlaCar-hobbled-by-lack-of-public-transport-in-the-us-2015-11>. [15 December 2015].

ESAíN G, 2015, BlaBlaCar cambia el sistema de valoraciones. Available from: <http://elviajero.elpais.com/elviaje-ro/2015/12/10/actualidad/1449752373_644115.html>. [15 December 2015].

MARTíNEZ J, 2015, El juez permitirá compartir viajes por inter-net con BlaBlaCar. Available from: <http://www.elespa-nol.com/enfoques/20151125/81991846_0.html>. [15 December 2015].

NAUGHTON, K 2015, Ford Embraces Sharing With Plan for Owners to Rent Out Cars. Available from: <http://www.bloomberg.com/news/articles/2015-06-24/ford-em-braces-sharing-with-plan-for-owners-to-rent-out-cars>. [15 December 2015].

references

43

NAUGHTON, N 2014, Millennials drawn to car-sharing services, but eventually, they buy. Available from: <http://www.au-tonews.com/article/20140726/RETAIL/307289990/millennials-drawn-to-car-sharing-services-but-eventually-they-buy>. [15 December 2015].

NUSCA A, 2015, Another unicorn (reportedly) gets its horn: BlaBlaCar raises $160 million at $1.2 billion valuation. Available from: <http://fortune.com/2015/09/08/bla-blacar-unicorn/>. [16 December 2015].

HEBERT D, 2015, BlaBlaCar lève 200 millions de dollars: L’impact de notre concept est impressionnant. Availa-ble from: <http://tempsreel.nouvelobs.com/econo-mie/20150917.OBS6012/BlaBlaCar-leve-200-millions-de-dollars-l-impact-de-notre-concept-est-impressionnant.html>.[15 December 2015].

HICKEY, S 2014, BlaBlaCar is to car hire what AirBnB is to the hotel industry. Available from: <http://www.theguardian.com/business/2014/apr/13/BlaBlaCar-hire-airbnb-ho-tel-car-share-service>.[15 December 2015].

KOROSEC K, 2015, Another ride-sharing startup becomes a unicorn: BlaBlaCar valued at $1.6 billion. Available from: <http://for tune.com/2015/09/16/BlaBlaCar-uni-corn-list/>. [15 December 2015].

RODRíGUEZ DE PAZ, A 2015, Uber, BlaBlaCar y Cabify remueven el transporte. Available from: <http://www.lavanguardia.com/economia/20151025/54438352977/uber-BlaBlaCar-ca-bify-remueven-transporte.html>. [15 December 2015].

ROMERO A M, 2015, El seguro del automóvil no está en pe-ligro. Available from: <http://www.elmundo.es/mo-tor/2015/10/22/5628a197ca4741fb738b459e.html>. [15 December 2015].

SHAHEEN S, CHAN N, BANSAL A, COHEN A, 2015, Universi-ty of California, Berkeley’s Transportation Sustainability Research Center, 2015, Shared Mobility: Definitions,

Industry Developments, and Early Understanding. Avai-lable from: <http://innovativemobility.org/?project=sha-red-mobility-definitions-industry-developments-and-ear-ly-understanding>. [16 December 2015].

RUSSELL J, 2015, BlaBlaCar’s CEO Shares The Company’s 10-Year Journey And Global Expansion Plans. Available from: <http://techcrunch.com/2014/10/21/BlaBlaCars-ceo-shares-the-companys-10-year-journey-and-global-expan-sion-plans/>. [15 December 2015].

TORREGROSSA M, 2014, Collaborative pioneer: an inside in-terview with Nicolas Brusson, co-founder at BlaBlaCar. Available from: <http://www.collaborativeconsumption.com/2014/01/21/collaborative-pioneer-an-inside-in-terview-with-nicolas-brusson-co-founder-at-BlaBlaCar/>. [15 December 2015].

THOMPSON C, 2015, Elon Musk: In less than 20 years, owning a car will be like owning a horse. Available from: <http://www.techinsider.io/elon-musk-owning-a-car-in-20-years-like-owning-a-horse-2015-11>. [16 December 2015].

WILLSHER, K 2015, Will BlaBlaCar shake up French work cul-ture?. Available from: <http://www.theguardian.com/world/2015/oct/10/BlaBlaCar-frederic-mazzalla-dri-ving-france-to-digital-future> [15 December 2015]

WOUTERS R, 2014, Ride-sharing has arrived in Europe, and the race is on between BlaBlaCar and Carpooling.com. Availa-ble from: <http://tech.eu/features/481/ride-sharing-eu-rope-carpooling-BlaBlaCar/> [15 December 2015].

10 exAMPles of sociAl innoVAtion froM tHe collABorAtiVe econoMY

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In this section we have handpicked a selection of initiatives from across the collaborative space, from different corners of the world, different sectors and diverse economic models. On one hand we aim to illustrate the rich diversity of the collaborative landscape and on the other highlight some examples that have the potential to leverage social change (in spite of the afore-mentioned controversies). Below we describe the not-so-easy task of selecting just 10 examples from such a diverse sector that is experiencing unprecedented growth. We then present distilled data for each initiative through the prism of the five social innovation variables as guiding parameters.53

Selection criteria

Our underlying motivation for the selection of these examples has been to illustrate the collaborative economy’s potential for social innovation and how organisations in this space can generate positive social impact, in spite of the aforementioned controversies. Of course this selection does not attempt to be representative of the sector, but simply to offer a handful of inspiring examples that illustrate where the collaborative economy could make a significant difference to today’s social, environmental and economic challenges. In other words, we hope these examples serve to “offset” the controversies we explored in Part 1 and in some way provide a glimpse of light at the end of the tunnel.

For the selection of these examples we have taken the following criteria into account:

1. diVersitY of collABorAtion tYPe: redistribution markets, product-service, life-style collaborations, P2P, spanning production, consumption, education and finance.

2. diVersitY of coMMerciAl orientAtion: from no money exchanged, not-for-profit initiatives to commercially oriented, for-profit businesses.

3. diVersitY of sector: finance, education, accommodation, makers, geocaching etc.

4. geogrAPHic diVersitY: while much of the activity is in the US we have strived to include examples from other regions.

5. sociAl innoVAtion VAriABles: 1) positive social impact, 2) economic sustainability, 3) innovative 4) cross-sector collaboration and 5) the potential to scale.

Finally, we have chosen a selection of initiatives that are less known.

Following an initial selection of 50 initiatives, based on the above criteria we narrowed this down to 15 and for each undertook a review of secondary resources webs, reports, press articles, academic articles as well as primary evidence through telephone or email contact with a representative of the initiative.

53 See previous versions of the Social Innovation Antenna for a detailed explanation of the social innovation variables available at www.esade.edu/research-webs/socialinnovation


3.1 Chegg

oVerVieW

Description Chegg was one of the first companies to bring textbook rentals online. After Apple and Amazon moved into the space it diversified and became a “student hub” which offers online tutoring, homework help, academic and career counseling as well as scholarships and internship matching. Inspired by the founders’ frustration with the restrictive policies of their own university’s bookstore, they set out to provide a better solution for students, professors and publishers alike. The name Chegg is a contraction of the words chicken and egg, based on the founders’ experience after graduation: they could not land a job without experience, but could not get experience without a job.

Founded 2005, The United States

Legal format Public company

Number of users Over 8 million US college students and 75% of all US college-bound high school students

Num. employees/workers 379

Geographical reach United States

Certifications/ awards Best Place to Work in 2015 in the SMB category of the Glassdoor Employees’ Choice Award

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sociAl innoVAtion VAriABles

1. Social impact • Transforming the way millions of students learn by making higher education more affordable and accessible and inspiring a spirit of collaboration and support between students.

• Helps students decide if they should go to college and where, and what they should major in, find scholarships, internships and tutors etc.

• Chegg for Good, the philanthropy outfit, empowers students to be catalysts for change on campus, in their communities, and around the world.

• Over 6 million trees planted through partnership with American Forests Global ReLeaf program.

• Hosted Hackathon 2015, an event aimed at empowering students to disrupt the educational system through collaborative innovation. 2,000 students participated.

2. Economic sustainability • Market value: $622 million.

• 2015 expected revenues are in the range of $295 and $310 million.

• Reached a deal with Ingram Content Group, which fundamentally reshaped its business model (Feb 2015). It now earns a commission on each book rented, not the full rental price, as it will no longer invest in inventory.

3. Innovation type • One of the first companies to bring textbook rentals online. It has diversified its offerings to become an “academic platform”.

• Chegg Tutors provide affordable and immediate homework help, on demand, 24/7. Chegg Study provides access to millions of guided step-by-step textbook solutions. It also offers 24/7 access to help from a community of subject experts with Expert Q&A.

• Cheggheads is a community of 15.000 high school and college students across the US. It helps provide insights to understand the collective student mindset.

• Chegg Career Center is designed to address the skills and knowledge gap that millions of graduates face every year as they transition from school to work.

• Internships.com, the largest student-focused internship site was acquired in 2014 to support Chegg’s community.

• Chegg Textbook Solutions app launched in 2013 to help students solve textbook problems.

4. Cross sector collaboration • In 2014, Chegg struck a strategic partnership with Ingram Content Group, the world’s largest distributor of books.

• In 2015, established partnership with InsideTrack, a student services company to bring professional career coaching directly to students.

• Partnerships with organizations like The School Fund, Ashoka, and ONE foundation, to teach students about social entrepreneurship, advocacy and philanthropy.

• Partnership with American Forests Global ReLeaf program.

5. Scalability and replicability • Started out as an online textbook re-seller hub but now endeavors to own the whole student marketplace.

• Plans to continue to tap into an underserved student population which spends yearly over $200 billion.

References chegg.com

facebook.com/chegg

@Chegg


3.2 eTsY

oVerVieW

Description Etsy, Inc. is a marketplace where crafters, artists and makers sell their handmade, vintage goods and craft supplies to millions of people both online and offline. Etsy was founded in June 2005 in Brooklyn, New York, and connects a community of 22.6 million active buyers and 1.5 million active sellers in nearly every country in the world (as of 9/30/15). Etsy’s mission is to reimagine commerce in ways that build a more fulfilling and lasting world through the transformation of how goods are made, bought and sold. Etsy has been a certified B-Corp since 2012.

Founded June 2005, US

Legal format Public Company

Number of users 22.6 million active buyers and 1.5 million active sellers (as of 9/30/15)

Num. employees/workers 804 employees and 9 offices worldwide (as of 9/30/15)

Geographical reach Worldwide

Certifications/ awards • Certified B-Corp (2012 - 2015)

• Included among the top 25 “Best Medium Workplaces” by Great Place to Work (2013, 2014, 2015)

• Cooper-Hewitt National Design Award winner for Corporate and Institutional Achievement (2014)

• One of GameChangers 500 “GameChangers,” a ranking of “the world’s top for-benefit companies.” (2015)

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sociAl innoVAtion VAriABles suggested indicAtors BeloW, or use otHers WHere dAtA is AVAilABle. tHose in itAlic Are sPecific to collABorAtiVe econoMY

1. Social impact • 1.5 million active sellers; 22.6 million active buyers (as of 9/30/15).

• Over 36 million items for sale (as of 12/31/15).

• For 30% of sellers, Etsy is their sole occupation. 44% of sellers use the income generated to pay for necessary household expenses and 86% of sellers are women, with 45% had never sold their goods before.

• 81% sellers connect with other Etsy sellers and exchange best practices.

• In 2014, 97.4% of Etsy emissions related to marketplace shipping. In 2014, emissions per shipment increased by only 3% as intra-country shipments are growing fast. However, increased sales of digital goods led to a 1% decline in emissions per transaction.

• Encourages cycling to work, offering bikes and maintenance service; composts over 600 lbs of food waste per month; implements waste reduction programs; uses reclaimed/handcrafted office furniture; offers 20 hrs of paid time off for volunteering as well as donation matching for all employees.

2. Economic sustainability • IPO completed in April 2015; priced at $16 a share.

• $195.6 million in revenue (2014).

• Annual gross merchandise sales: $1.93 billion (2014). Up 43% from 2013.

• Charges a $0.20 fee for item listed and a 3.5% fee for sales completed. Additional revenue comes from seller services, i.e. promoted listings, payment processing and shipping labels.

3. Innovation type • Makes it easy for sellers to run independent businesses that reach a global market and connect people to make, sell and buy unique goods.

• Etsy Manufacturing: a new marketplace where sellers can connect with manufacturers (2015).

• Etsy Wholesale: a platform to connect sellers to retail buyers.

• Educational resources to help sellers from The Seller Handbook, to blog posts, to video tutorials, and a podcast series.

• Ongoing innovation i.e. promoted listings, direct checkout, and shipping labels.

4. Cross sector collaboration • Forest Stewardship Council and the International Living Future Institute for best practices on handmade, sustainable office furniture.

• Craft Entrepreneurship, an in-person, educational program that empowers creative people in underserved communities. Hosted in partnership with local governments and institutions such as libraries, community centers and small business associations. Committed to work with policy makers to expand the program, which is a commitment President Obama has recognized.

• Facilitates conversations between sellers and policymakers on entrepreneurship

• CEO, Chad Dickerson, sits on the President’s Advisory Board for Trade Policy Negotiations.

• Works with NY city government on tech training that meets private sector’s needs.

• Over 30K sellers crafted comments to FCC to protect Net Neutrality.

• Supporter of the White House Maker Faire.

5. Scalability and replicability Buyers and sellers in almost every country in the world.

References etsy.com

facebook.com/Etsy

twitter.com/etsy

https://blog.etsy.com/news/2015/the-promise-of-creative-entrepreneurship/


3.3 freegLe

oVerVieW

Description Freegle (standing for Freely Given, Locally, Easily) is a UK-registered charity that aims to increase the reuse of objects and reduce landfill by offering a free Internet-based service where people can give away and ask for things that would otherwise be discarded. It was formed in 2009 after many Freecycle groups in the UK decided to break away from the US parent organisation as a result of different positions around the autonomy of local groups. Each local group is run independently by a group of elected national representatives with Freegle UK providing central services. Important decisions are made by a poll of all volunteers.

Founded 2009, UK

Legal format Industrial and Provident Society for the benefit of Community (IPS) (Non-profit cooperative model with shareholders with voting rights)

Number of users 2,391,078 registered members in 409 local online groups.

Num. employees/workers Volunteer run. No employees but Freegle creates specialized (paid) projects.

Geographical reach England, Wales, Scotland and Northern Ireland.

Certifications/ awards • Cat Fletcher, founding member of Freegle UK, received the Points of Light Award from UK Prime Minister, 2015.

• Greener Together Community Award (Scottish Freegle groups), 2013.

• Highly Commended in the National Recycling Awards 2012.

• Winner at the National eWell-Being awards 2010 for Building Community Networks.

• Winner in the Nigel’s Ecostore Green Web Awards 2009.

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1. Social impact • More than 2.3 million members.

• Indirect beneficiaries: Circa 6 million.

• Approx. 10,000 tonnes of goods reused annually.

• Redistributes assets, builds community resilience, reduces waste, and assists the financially challenged.

• Facilitates reuse as it fills in gaps between mainstream (reuse) charities, waste management and businesses (auctions, Ebay, boot markets) while providing means for self-action.

2. Economic sustainability • Income source is currently only donations (about £10k annually) and competition ’winnings’. About to receive a grant of $50.000 from a global Microsoft competition.

• In the process of developing a business model to be financially sustainable.

3. Innovation type • Grassroots networks and non-profit organisations run Freegle groups.

• Groups are autonomous and affiliate to the national Freegle Ltd organisation. Basic requirements: being free to join and everything handed on must be free and legal.

• Anyone can join a local group for free and post a notice offering to give something away. Branch moderators screen every notice.

• The majority of Freegle groups are hosted on Yahoo! Groups, but most can also be used from Freegle Direct (Freegle’s own user interface) or as an app from Facebook.

• IPS model means Freegle shareholders who have voting rights to determine organization growth and format.

4. Cross sector collaboration • Freegle works with the UK Ministry for the Environment (Defra), circular organization WRAP, various MPs and local authorities. The biggest engagement has been in Brighton, Cumbria and Banbury.

• Freegle has a myriad of relationships, collaborations and partnerships with organisations from private, public and community sectors.

5. Scalability and replicability • 409 local online groups.

• Over 70% growth in 3 years.

References ilovefreegle.org/

@thisisfreegle

facebook.com/Freegle/

@FreegleBrighton

@WasteHouse

@CityReuseDepot

@GSTUK_Brighton


3.4 kiCksTarTer

oVerVieW

Description Global crowdfunding platform focused on creative projects, such as films, music, stage shows, comics and the like. Kickstarter has become the go-to platform for creative ideas from everyone from unknown entrepreneurs and concerned citizens to big-name celebrities, with 10 million people backing projects through the platform. It earns no money unless a project’s funding goals are met. It works with candidates to help them create a successful campaign. The management team is less concerned with short-term growth and focuses on building the integrity, trust and expertise of the platform for the long term. However, Kickstarter will pay dividends to shareholders and employees in the next few years: “It’s going to be profits shared on an annual basis. We’ll all benefit from what’s created.”

Founded 2009, The United States

Legal format Public-benefit corporation (since September 2015)

Number of users 10 million backers (since 2009)



Certifications/ awards • B-Corp (2014)

• One of the “Best Inventions of 2010” and “Best Websites of 2011 (Time)

• Winner of the 2013 Crunchie for Best Overall Startup (TechCrunch) Webby Breakout of the Year in 2014 (The Webby Awards)

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1. Social impact • Alternative source of funding for over 13 diverse categories, which is having a profound impact in the way individuals and collectives, can raise capital to launch projects.

• 10 million people have backed a project since 2009, $2.1 billion has been pledged, and 96,954 projects have been successfully funded.

• Commitment to report every year instead of every two as required. Maximum transparency around fiscal responsibility

• Donates 5% of after-tax profits to causes that support the arts and combat inequality.

2. Economic sustainability • If a project is successfully funded, Kickstarter applies a 5% fee to the funds collected. If the project does not reach its funding goal, there are no fees.

• The company has raised under $15 million. The founders retain the majority ownership.

• The company has been profitable for years. $5-10 million per year for each of the last three years and has continually reinvested that money in the business.

• The founders have no plans to sell the company or try for an IPO.

• It plans to begin paying a dividend to shareholders and employees in the next few years. Employees can exercise their option grants for up to 10 years.

3. Innovation type • With a campaign page virtually unchanged since its original design, most of the other crowdfunding sites have copied their lead.

• Viable alternative to traditional VC finding, with funds being raised in less than a day in some campaigns. In 2014, Neil Young’s Pono Music player, raising $6.2 million, became the third most successful campaign on Kickstarter.

• In 2014, TIME named Kickstarter as one of the five projects in its 25 best inventions of the year.

• Six Kickstarter-funded films have been nominated for Academy Awards and one for an Oscar.

4. Cross sector collaboration • “Curated pages” gives cultural/artistic entities space to highlight Kickstarter projects proposed by people associated with their organizations.

• Partnership with The New York Times to create a video section featuring one film on its homepage and YouTube channel each week.

• Partnership with The Guardian to boost the world of journalism.

• Partnership with United Nations Refugee Agency to raise money to help migrants fleeing the violence in Syria. Kickstarter has waived its fee.

5. Scalability and replicability • By 2025, the global crowdfunding market could reach between $90 billion and $96 billion (roughly 1.8 times the size of the global venture capital industry today).

• In 2014, 22,252 projects were successfully funded on Kickstarter: biggest number in its history with 2,202,171 people backing a project for the first time.

• 3.3 million people, from nearly every country in the world, pledged in 2014.

References kickstarter.com

facebook.com/Kickstarter

@kickstarter


3.5 La rUChe QUi DiT oUi (La CoLMena QUe DiCe sí/The fooD asseMBLY)

oVerVieW

Description Online platform and support system that enables people to organise themselves into groups (Assemblies) to purchase affordable, high-quality food online from local small-scale producers. Customers place an order on the platform and then pick up their food from a pop-up market. Each assembly is organised by a leader who is supported by La Ruche to organise venues and sign up local producers to the scheme. For every product sold a commission goes to the local leader and to the central organization. Starting in France, it has now become a movement across Europe. There are more than 800 Assemblies in France, Belgium, the United Kingdom, Spain, Germany and Italy.

Founded 2011, France

Legal format Social enterprise since August 2012

Number of users Over 800 local groups connecting 4.000 producers and 200.000 customers

Num. employees/workers Over 80

Geographical reach France, Belgium, UK, Spain and Germany.

Certifications/ awards • Certified in France as a Solidarity Company with a Social Purpose Best British food initiative at BBC Food and Farming awards, 2015.

• Climate Champion Awards, 2015 (Resilience Category).

• Compromiso Empresarial: Best Social Innovation in Spain, 2014.

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1. Social impact • Promotes the consumption of local, organic food.

• Connects 4.000 food producers with 200,000 customers in over 800 food assemblies across 6 European countries.

• Producers set their own price and get over 80% of the sale price (compared to the 15%-25% that most supermarkets offer them).

• 80% of assembly leaders are women.

• 21% don’t have another source of income. 3% have even quit their daily job to focus on developing their local assembly.

• 37% of assembly leaders have used their experience at the assembly to re-enter the job market.

• Goods come from within a 250Km radius, which helps reduce CO2 emissions.

• 78% of assemblies have grown into a true local community.

• SROI in analysis conducted in France and Belgium. Yearly overall economic impact analysed communities: €2 745 000, (June, 2015).

2. Economic sustainability • Started with €50.000 seed investment.

• Raised €1,5 million in September 2012 with VC firm Xange backed by the Postal Bank and Siparex, a social fund.

• In 2014, it raised approximately €1.5m in debt in 2014 from the Caisse Des Depots, the Paris Initiative Enterprise and BNP Paribas and it also receives subsidies from the Ile De France region.

• In 2015, it raised €8 million from international investors Union Square Ventures, Felix Capital, XAnge and Quadia).

• The company takes 16.7% of the pre-tax turnover from each producer (8.35% goes to pay for the online platform, and 8.35% goes to the assembly leader).

• Annual turnover: €2 million in 2015.

3. Innovation type • Unlike most consumer groups, La Ruche focuses on empowering the Assembly leaders to make their own group successful with an effective online platform.

• Connected yet distributed network that allows countries to choose their name. The UK has chosen to be known as The Food Assembly; in Spain, La Colmena que dice sí.

• The farmers, the assembly leader and the “members” attend weekly food collections.

• Support actions: online training, insurance, local facilitators, online forums etc.

4. Cross sector collaboration • Launch of communication platform to connect assembly leaders with local authorities to better coordinate events and communication campaigns.

• Proactive dialogue with city councils to support local farmers and to make public space accessible for food delivery.

• Collaboration with French government on a Europe-wide survey on the self-employed status.

5. Scalability and replicability • The company has spread very quickly from France to Belgium, UK, Spain, Germany and Italy.

• The Netherlands will launch soon.

References laruchequiditoui.fr

@ruchequiditoui

@foodassembly

facebook.com/TheFoodAssembly

facebook.com/laruchequiditoui/


3.6 PeerBY

oVerVieW

Description Amsterdam-based social startup that lets people borrow or rent things from their neighbors through an online platform (web and app). As per its mission, Peerby aims to “give instant access to everything, everywhere for everyone”. Its most popular items are power drills, pressure cleaners, bikes and tents. It started as friendly borrowing between neighbors after the founder’s house burned down. It has now evolved into a hyperlocal website with active communities in twenty cities across Europe and ten pilots in the US. It takes about ten people in a neighborhood to join for the site to become useful to those people and impact consumer patterns. The name combines “peer 2 peer” with “nearby”.

Founded 2012, The Netherlands.

Legal format Limited company

Number of users Expected 500,000 members signed up by the end of 2015


Geographical reach The Netherlands, Belgium, England, Germany, France and US

Certifications/ awards • Most Radical Innovation of 2015

• Best urban app in the AppMyCity! Competition, 2014

• Guardian Tech Talent Day Competition, 2013

• Radicale Vernieuwers 2013 (Radical Innovators)

• Postcode Green Challenge, 2012

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1. Social impact • Peerby sees transactions as a contribution to community building.

• Helps cut the CO2 emissions and raw materials needed to produce goods. (80% of household items are only used once a month).

• The site has processed more than 100,000 transactions. The database contains more than $1 billion worth of items.

• At least 60% of requesters are connected with a potential supplier within 30 min.

• The company expects to reach 500,000 members by the end of 2015.

2. Economic sustainability • $3 million raised from international investors and from prize money from the Postcode Lottery Green Challenge (member of the Clinton Global Initiative).

• Focus has been on building critical mass and an active network before collecting any revenue.

• In September 2015, “Peerby Go” model rolled out in Amsterdam, which takes a commission on each transaction by offering insurance and item delivery.

3. Innovation type • Peerby changed the business model after discovering that most people prefer to lend items to their neighbours for free. Instead of taking a cut of the rental fee, the company started selling insurance and delivery services

• Following analysis of other companies’ failures, they focused on demand rather than on long lists of classified ads.

• Algorithm to create a network of potential suppliers among members registered as Superbuur (Dutch for “super neighbour”). When a member requests an item, a push notification is sent to nearby Super Neighbours.

• Super Neighbours can earn additional money by delivering the item themselves.

• Plans to create another business model around a community where new goods, coming directly from the producers, are shared and members pay for use.

• There are no reviews as the site aims to spread goodwill among neighbours.

4. Cross sector collaboration • Strong links with local governments and partnership agreements with insurance companies and delivery services.

5. Scalability and replicability • It has expanded to 20 cities in Europe, including London and Paris, and it is doing pilot projects in 10 American cities, including New York and San Francisco.

• It expects to have a network of owners and renters in all major American cities by 2017.

References peerby.com @peerbyfacebook.com/Peerby


3.7 refUgees WeLCoMe

oVerVieW

Description A software platform that connects people willing to offer a room in their homes to an asylum seeker and live together for a period of time. The founders were the first to welcome an asylum seeker from Mali in December 2014. After a shared flat or house signs up to the website, which is available in English and German, Refugees Welcome connects them with a refugee organisation who will endeavour to find the right fit. The platform will also help the refugee gather the money to cover the rent either via micro-funding or public grants.

Founded 2014, Germany

Legal format Not-for-profit organisation

Number of users 411 Refugees (208 in Germany; 200 in Austria; Poland: 2; Spain: 1)

Num. employees/workers 6 full time and more than 60 volunteers

Geographical reach Germany, Austria, Greece, Portugal, The Netherlands, Sweden, Poland, Italy, Spain and the UK

Certifications/ awards None yet

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1. Social impact • Offers refugees a safe home and promotes a “a new culture of welcome” by helping new arrivals integrate.

• 411 refugees from: Afghanistan, Albania, Algeria, Bangladesh, Burkina Faso, Cameroon, Eritrea, Gambia, Ghana, Kenya, Liberia, Mali, Niger, Nigeria, India, Iraq, Iran, Pakistan, Russia, Senegal, Somalia, Sri Lanka, Syria, Tunisia and Ukraine.

• Very diverse pool of registered hosts and backgrounds: age ranges from 20 to 70 and includes bus drivers, carpenters, doctors and scientists.

2. Economic sustainability • In the absence of public financial support to help run the platform, the team has set up a crowdfunding campaign to finance refugee rents. By Dec. 2015, 444 donors had pledged money and 79% of budget target had been reached.

• Helps with microdonations from friends/family or in applying for public funding. By Sep. 2015, costs had been covered, in a third of the cases, by the job centre or social services. In a quarter of cases, rent payments were met via micro-donations to the site.

3. Innovation type • The German government has set up reception centres in disused barracks and other buildings, which have seen arson attacks and protests. Living together is the key part of the project so empty flats are not accepted and there is a “one person per room” policy.

• To join the scheme, people must register their interest online and give details of their housing situation, which a refugee organisation will review.

• Volunteers introduce people to their perspective new housemate and if they decide to take them in they are offered help financing the rent.

4. Cross sector collaboration • Strong links with local specialized NGOS and federal government.

5. Scalability and replicability • The project’s growing success has now led to offers of help to set up similar schemes in other EU countries, including Austria, Greece, Portugal, The Netherlands, Sweden, Poland, Italy, Spain and the UK.

• There is also interest outside Europe, ie. Australia and the US.

References refugees-welcome.net facebook.com/fluechtlingewillkommen @FlchtlngWllkmmn


3.8 shareTriBe

oVerVieW

Description Sharetribe provides a subscription-based open-source software for aspiring collaborative economy entrepreneurs to create their own peer-to-peer marketplace platform, “the wordpress of the collaborative economy”. Sharetribe makes a significant contribution in the pursuit of a more egalitarian sharing economy where local marketplaces can be run and owned by the users themselves and benefits put back into the local communities. The company started as a research project in 2008 for students to share, sell, buy things or ask/offer help and now supports over 500 collaborative economy entrepreneurs who lack the technical skills or resources to build and run a marketplace from scratch.

Founded 2011, Finland

Legal format Private company

Number of users Close to 500 paying customers in more than 40 countries



Certifications/ awards Winner, Peloton Summer Camp 2013 (competition for energy-smart startups in Finland).

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1. Social impact • Seeks to do for the collaborative economy what WordPress has done for Internet publishing.

• Provides value to entrepreneurs by helping build a minimum viable product within a day and start testing the concept with users immediately.

• 500 early-stage collaborative economy entrepreneurs run their businesses or nonprofits with Sharetribe’s software.

• Open-source license so it creates commons available for others to use.

2. Economic sustainability • Entrepreneurs using the platform are charged a monthly fee.

• The subscription includes the overall service, with different tiers to reflect the number of members in each Sharetribe community

• Annual revenue: $600.000. Growth of 600% year on year. Close to profitability.

• In 2014, the company closed $1 million in seed funding led by Finland’s Lifeline Ventures. The Finnish tax payer-funded Tekes also participated.

3. Innovation type • Unique technologies that can be used by anyone without a technical background to easily create their own peer-to-peer marketplace.

• Making it open source democratizes access to the platform.

• Sharetribe helps entrepreneurs grow their online communities through an online educational tool.

• Marketplace Academy to share experience and insights of the most common success and failure factors of collaborative marketplaces.

4. Cross sector collaboration • The platform is used by cities, local governments, non-profits, co-operatives, NGOs etc.

5. Scalability and replicability • The platform is already used in 40 countries and continues to expand. As an open-source platform, the platform is highly scalable.

References sharetribe.com @sharetribe facebook.com/Sharetribe


3.9 soCiaLCar

oVerVieW

Description Social Car is the first and leading peer-to-peer car rental company in Spain, based in Barcelona. It lets owners make money by renting out their own cars when not in use as well as providing a flexible and more sustainable car rental/sharing solution to the drivers. With its growing fleet of cars, Social Car is already present in more than 60 cities in Spain. There are no membership fees, but SocialCar charges a commission per rental against which it provides full insurance, payment services and customer support.

Founded 2011, Spain

Legal format Private limited company.

Number of users 75.000 registered users.

Num. employees/workers 10 employees.

Geographical reach Cars available in over 600 towns , including Barcelona, Madrid, Valencia, Mallorca, Menorca, Vigo, Sevilla, Bilbao and Ibiza.

Certifications/ awards • Plan Avanza 2011

• AIJEC 2011

• Smart City Awards 2011

• CECOT 2012

• Actualidad Económica 2015

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1. Social impact • 75.000 users.

• Over 6.000 cars.

• Drivers earn an average of €2.000 a year.

• 20% of users are tourists visiting Spain.

• More efficient use of cars and which impacts CO2 emissions.

• Offline car key handover, which facilitates social cohesion as neighbors meet, and people living locally meet each other.

2. Economic sustainability • Raised €800.000 in first funding led by Cabiedes & Partners in 2005.

• The company intends to use the funds to continue to consolidate its market position in Spain and expand abroad.

• Charges a 15%, 20% or 30% commission depending on the car rental.

3. Innovation type • New urban mobility option or small towns in Spain.

• Private car rental is not regulated in Spain but SocialCar provides extra layers of trust including insurance, security deposit and payment handling. It also handles possible driving infractions or parking violations during rental.

• Security checks on drivers.

• Information to users on their tax liabilities.

• User reviews.

• Offers brands not available in standard rental markets, like Tesla cars.

4. Cross sector collaboration • Relationship with local, national governments (e.g. position on regulations) and civil society.

• Active member of trade association Sharing España.

• Input into sharing economy studies from academia, local governments etc.

• Partnerships with insurance and utility companies like Axa and Repsol as well as travel agencies etc.

• Partnership with Nightswapping, Glovo andTrip4real to demonstrate savings and promote collaborative tourism.

5. Scalability and replicability • Started as a local service but has grown to become a substantial community through word of mouth.

• Plans to expand internationally.

References socialcar.com facebook.com/alexandra.socialcar @socialcarcom


3.10 VanDeBron

oVerVieW

Description Amsterdam-based startup, which translates as “from the source,” provides an online peer-to-peer marketplace between energy producers (local farms generating clean energy), and energy consumers (local homeowners and businesses looking for an affordable, local, renewable energy supply). Customers choose their preferred type of contract (one year, three years) and how much power they need. They can then choose among producers, who each get a page to describe themselves and their production set-up. Vandebron aims to accelerate the transition to a market that uses solely renewable energy and envisions playing an important role in the transition to an autonomous energy supply.

Founded 2014, the Netherlands

Legal format Limited company

Number of users 38.000+ households


Geographical reach The Netherlands

Certifications/ awards • European Utility Industry Awards: Smart Community

• Join Our Core: international winner

• Vrij Nederland: Radicale Vernieuwers (Radical Innovators)

• RTLZ: Toekomstmakers (Makers of the Future)

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1. Social impact • There are currently 50 producers on the platform, generating enough power for over 50.000 households with an average annual bill of €2.000.

• Average households can save up to €150 a year on their energy bill. Producers can make an additional € 20.000 per year which has allowed several projects to “close the loop” in terms of financing installations.

• Customers have saved 0,1 million tonnes of CO2 emissions since 2014.

• Independent producers host 5-8 “meet-your-provider” get-togethers on the farms every year.

• Enhanced awareness about energy efficiency. Would you waste energy if you know how and where it is being produced?

2. Economic sustainability • Unlike energy companies, Vandebron does not make any profit on the energy the farmers sell, the business model is built on the matching service between producer and consumer.

• The company charges a Spotify-like subscription of €10 a month paid by consumers and producers alike.

3. Innovation type • Incremental innovation moving towards local energy consumption and radical innovation in terms of connecting producers with consumers.

• Provides transparency in the energy origin and is an alternative to utility corporations with a home-generated power real market.

• Plays a significant role in accelerating the transition to 100% renewable energy and converting consumers to clean and renewable energy.

4. Cross sector collaboration • Works with consumers and independent producers as well as companies with a turbine or larger generator.

• Partnerships with the Dutch Consumer Association, Tesla, Triodos Bank, and other organisations to promote the service and raise the profile of the producers.

5. Scalability and replicability • Holland’s independent producers generate enough power for potentially up to 1 million customers.

• As the price for sustainable energy is more affordable, the business case for investing in sustainable production improves.

• The model is highly scalable because the company does not own any asset and simply connects supply and demand, keeping transaction costs to a minimum.

• The model works in Holland as it has a fully deregulated energy market. In other countries, the model should also work with the right regulatory framework.

• Vandebron is looking to leverage the experience to expand internationally.

References Vandebron.com Facebook.com/vandebron @vandebron

finAl reflections

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The fast pace of technologically driven social change is here to stay and new innovations are appearing every day in the collab-orative economy. By the time you read these words there will undoubtedly be a new wave of software platforms on the scene, as well as a greater penetration of internet and smartphones and multiple business and investment opportunities. As the collaborative economy grows, so do questions around gover-nance, ethics, and economic justice behind the initiatives: who owns the platforms, and is wealth being shared? Are workers protected and rewarded? The following pages provide some final reflections on this controversial area, as well as glimpses of hope for positive emerging trends.

The end of the golden age

Five years after the publication of Rachel Batsman’s acclaimed What’s Mine is Yours, 2015 saw the publication of Tom Slee’s What’s Yours is Mine. Slee, a technologist, argues that the col-laborative economy has not lived up to the great expectations of disrupting capitalism, and has helped increase inequality, with a race to the bottom for the most vulnerable and sky-rocketing profits for the wealthy few.

It is clear that events have moved on from the golden age of empowered citizens sharing idle capacity, and building commu-nities on the internet, to a stark reality where 17 companies valued at a billion dollars or more rule the roost in most sectors, thanks to the resources provided by the very same citizens.

It would be unfair to say that all of the early collaborative eco-nomic aspirations have failed. In terms of resource efficiency, BlaBlaCar has proved that it is possible to make gains by open-ing access to idle capacity. Forty million rides are shared every year on the platform, with an estimated million tonnes of CO2 already saved (the equivalent of the electricity used annually by 140.000 homes).1 It is fair to say that trust, another corner-stone of the collaborative economy has also increased. The fact that individuals now put their cars, homes, and even money in the hands of strangers is a major paradigm shift that has been facilitated by the effectiveness of online trust mechanisms. Reputation aggregators – sophisticated algorithms and finely tuned feedback systems – have in some cases created self-po-licing mechanisms that are more effective than the regulated options (ride-sharing versus taxis). It is in terms of community where the initial socialist dream has not been realised. Spain’s leading consumer association, OCU, studied 57 collaborative European companies in 2016 in terms of usability, trust, safety, and community (understood as having a social or environmental mission, horizontal governance, collaboration, self-organisation, and the use of local products). The analysis showed that 35% of platforms were simply used for transactions (i.e. no value

was added in terms of trust or community), while 55% create a social network between users, and 25% bring about a positive social or environmental transformation (although this is just 10% in the case of Spain).

Is the collaborative economy a social innovation?

Below we reflect on the collaborative economy through the lens of five social innovation variables:

• Social impact: This is the most controversial. In terms of the collaborative economy, where in most major shar-ing sectors more than 50% of activity is owned by a single company, wealth disparities are increasing. The tendency towards a ‘skimming’ economy, where taxes can be avoided by cloud-based innovations, also curbs tax contributions to a welfare state (depending on the country). For workers, also described as precariats, the sharing economy offers great support for individual free-lancers (Etsy is a prime example). However, income from sharing platforms usually amounts to less than 50% of total income, and this is not a desirable long term sit-uation given the limited access to rights, benefits, and stable pay – and the extra burden of liability and risk. It is perhaps the users of the collaborative economy who enjoy the most social benefits: thanks to more efficient and affordable access to everyday services – such as travel, food, accommodation, tasks, and even finance – as well as the social value generated by the connections made between users. This last point is highlighted by OCU as one of the greatest positive social impacts of the sector. Nevertheless, the majority of platforms are designed to fix everyday needs rather than solve social problems. The jury is still out on the environmental impact – while car-sharing comes up trumps, the ecological footprint of e-commerce is negative.

• Economic sustainability: Our second variable is far less controversial. The numbers clearly add up for collaborative companies – hence the $15 billion that has already been invested in the sector and estimated global revenues of $335 billion by 2025. Extremely low marginal costs, and increasing access to enabling technologies are two key factors that have helped the software platforms become so successful. Moreover, price is a key motivation for most sharers. Although the scene has been set for good busi-ness practices, there is not always much financial trans-parency – particularly among the big players.

• Innovation type: The collaborative economy is a hot-bed of disruptive innovation, with major paradigm shifts occurring


across sectors, most notably in travel, tourism, finance, and education. The culture change from ownership to access, particularly amongst millennials, is a key result of the impact of the avalanche of innovations across the board. The exponential growth in crowd-funding is another major shift. On a platform level, the sophisticated accountability systems that build trust, and effective algorithms around pricing, are both areas of significant and continued innova-tion. However, there is still room for innovation in how users provide feedback on the platforms themselves, rather than simply on other users.

• Cross-sectoral collaboration: Our reflection here is that collaborative companies could collaborate more across sectors, particularly with governments and regulators. Given the huge potential for software platforms to meet everyday needs in a financially sustainable way – there is great potential for public services if the regulatory details can be resolved. SNCF’s integration of private car sharing solutions into its integrated travel web is a good example of how this type of collaboration can work. There are also some emerging examples of collaboration between sharing companies; however, these are also few and far between given the high levels of competition (with very little room for second-placed players).

• Scalability and replicability: With over three billion people now connected to the Internet and around two billion smart-phone users, growth for software platforms is unprecedent-ed and investment in the field has already doubled the social media giants. The phenomenon is global, with the big players well established worldwide and even smaller ini-tiatives going global from the start. What remains unclear, however, is the potential rebound effect of sharing activity; while there may be positive environmental impacts when sharing idle capacity, there is insufficient data on whether this is outweighed by the resulting volume of transactions.

Critical crossroads for future of sharing

We are at a key moment in the history of the collaborative economy. The controversies are on the table; critical voices are getting louder from the press, sharing economy associations, consumer associations, and governments alike. Things could go either way: more of the same, unrestrained growth in the hands of hungry venture capitalists; or perhaps, more decen-

tralized, greener, and more genuinely collaborative models will take hold. Our selection of ten collaborative initiatives serves as a guide for potential future trends, which we highlight below.

• Platform cooperativism: this concept blends the idea of new software platforms together with the age-old cooper-ative movement. Some promising early stage initiatives include: Loconomics, a worker-owned alternative to Task-Rabbit; LaZooz, an Israel-based ride-sharing system using cryptocurrency; and Enspiral – the New Zealand based co-working community of digital professionals. Although currently in its infancy, the concept has huge potential if it reaches the big players. User-owned platforms mean that value distribution, labour issues, and other aforementioned controversies, are dealt with in a very different way; “What if Uber was owned and governed by its drivers? What if Airbnb was owned and governed by its hosts?” (Gorenflo, 2015).54 Ouishare, the P2P Foundation, and others, project a positive future for the idea: “Once the VC-backed shar-ing companies clear away regulatory hurdles, local co-ops will be poised to swoop in and spread the wealth.”55 BlaB-laCar’s founder is open to the idea of drivers sitting on the board, and Kickstarter has begun distributing shares among workers – so perhaps it will not be long before the idea takes off.

• Beyond commission-based business: Another interesting trend is the shift away from a strictly commission-based business model. The Food Assembly (La Ruche qui dit que Oui) channels 8.35% of every product bought through the local assemblies to the business, and the same per-centage to the independent local assembly leader, thus creating incentives for local decentralised governance, as well as a feeling of empowerment for the leaders that helps them find additional work elsewhere. Peerby, the neighbour exchange platform does not use commissions as neighbours did not feel comfortable charging for the use of items, and now just charges for extras, such as delivery and insurance.

• Empowering individuals through critical mass: Etsy is a roaring success with 54 million members globally, and the platform has gained enough traction that 30% of all sellers use the platform as their sole occupation. Airbnb is also providing the opportunity for individuals around the world to independently supplement their income. Likewise, Chegg is now used by eight million students, and provides affordable

54 http://www.shareable.net/blog/how-platform-coops-can-beat-death-star-platforms-to-create-a-real-sharing-economy

55 Nathan Shneider’s article ‘Owning is the new Sharing’

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textbook rentals and other services to students worldwide. Kickstarter is another of the big players and has succeed-ed in helping find funding for 200,000 projects.

• Keeping it local: the Vandebron platform connects energy producers with consumers and is one of several initiatives using software platforms to facilitate local renewable en-ergy consumption. Socialcar facilitates local peer to peer car rental. These types of initiatives are already starting to replicate in new locations.

• Uberisation and the ‘Airbnb for…’: Now that collaborative culture has gone mainstream, another emerging trend is the replication of established companies to create the ‘Airbnb for…’ or the ‘Uber for…’. For example, Refugees Welcome is an Airbnb for refugees connecting homeown-ers with refugees. The sharing economy platforms could do well to promote the more socially oriented examples that are emerging.

In the long term, the issues that will determine who benefits from the collaborative economy are complex and inter-connect-ed. Key factors include: who owns and controls the platforms; the demands from users for social, financial, and environmental accountability; how regulators respond to fair treatment for workers; the influence that sharing economy trade associations have on the sector; and the adoption of a potential next gener-ation of open source and decentralised collaborative platforms.


Academic articles

BELK, R. 2014. You are what you can access. Sharing and collaborative consumption online. Journal of Business Research, 67(8): 1595-1600.

CUSUMANO, M. 2015. “How Traditional Firms Must Compete in the Sharing Economy.” Viewpoints. Communications of the ACM, 58(1).

DOWLING E., & HARVEY, D. 2014. Harnessing the Social: State, Crisis and (Big) Society. Sociology, 48(5): 869–886.

EDELMAN, B. and GERADIN, D. 2015. Efficiencies and Regulatory Shortcuts: How Should We Regulate Companies like Airbnb and Uber? Harvard Business School, Working Paper 16-026.

GOBBLE, M. 2015. Regulating innovation in the new economy. Research-Technology Management. March - April 2015.

HELLWIG, K., MORHART, F., GIRARDIN, F. & HAUSER, M. 2015. Exploring definitions of Sharing Exploring Different Types of Sharing: A Proposed Segmentation of the Market for “Sharing” Businesses. Psychology & Marketing, 32(9): 891-906.

KOOPMAN, C., MITCHEL, T., THIERER, A. 2015. The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change. The Journal of Business, Entrepreneurship & the Law, 8(2) Article 4.

LEE, J., BYUN, W., LEE, S., DO, M. 2014. Correlation between optimal car sharing locations and carbon dioxide emissions in urban areas. International Journal of Environmental Science and Technology, 11: 2319-2328.

Malhotra A. & Alstyne M. 2014. “The dark side of the sharing economy and how to lighten it.” Viewpoints Communications of the ACM, November 2014, 57(11).

MARTIN, C., UPHAMB & P. BUDD, L. 2015. Commercial orientation in grassroots social innovation: Insights from the sharing economy. Ecological Economics, 118: 240–251.

MARTIN, E. & SHAHEEN, S. 2011. Greenhouse Gas Emission Impacts of Car sharing in North America. IEEE Transactions on Intelligent Transportation Systems, January 2011, 12(4): 1074-1086.

MCARTHUR, E. 2015. Many-to-many exchange without money: why people share their resources. Consumption Markets and Culture, 1(2): 239-256.

MOHLMANN, M. 2015. Collaborative consumption: determinants of satisfaction and the likelihood of using a sharing economy option again. Journal of Consumer Behaviour, 14(3): 193–207.

NADEEM, S. 2015. On the sharing economy. Contexts. American Sociological Society, Fall 2015, 14(4).

RANCHORDáS, S. 2015. Does Sharing Mean Caring? Regulating Innovation in the Sharing Economy. Tilburg Law School Legal Studies Research Paper Series, 6.

SCHOR, J. 2015 “Getting Sharing Right” in special edition “On the Sharing Economy.” American Sociological Association Contexts, 14(1): 12-19.

STANDING, G. 2014. O precariado e a luta de classes. Revista Crítica de Ciências Sociais, 103: 9-24.

ZERVAS, G., PROSERPIO, J., AND BYERS, J. 2015. The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry. School of Management, Boston University, Draft paper.

Other publications

ALLEN D., and BERG C. 2014. How over-regulation could destroy an economic revolution. Institute of Public Affairs.

BENNER, K. 2015. “On-Demand Begins March on White-Collar Professions; ‘Uber Legal’ to Come?” Bloomberg Brief: The Sharing Economy. Available from <http://www.bloombergbriefs.com/2015/06/15/sharing-economy/>. (15 June 2015).

BIBA (British Insurance Broker’s Association) 2014. A BIBA guide to The Sharing Economy. BIBA, DAC Beachcroft, Zurich. Available from <http://bit.ly/1zeh3l9>. / (1 September 2014).

BOTSMAN, R. & ROGERS, R. 2010. What’s mine is yours. Collaborative consumption is changing the way we live. Harper Business, New York City.

references

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We would like to thank the following individuals who were interviewed for the BlaBlaCar case study.

AMAYA APESTEGUíA - Responsible and collaborative consumption expert at OCU

RAFAEL BARBADILLO - President of Spanish Coach Association (CONFEBUS)

ALBERT CAñIGUERAL - Sharing Economy Expert, OuiShare

MIQUI FERRER - Sharing España coordinator and Collaborative Economy expert

ELSA DE LA HAZA - former Head of Communication/CSR at BlablaCar

DIEGO HIDALGO - CEO Amovens

ANGELO MEULEMAN - Shared mobility expert, OuiShare.

JAIME RODRíGUEZ - Director General (Iberia) at BlaBlaCar

VINCENT ROSSO - Founding Team - Co-founder BlaBlaCar Spain

AMéLIE SéGURET - Business Development Manager at BlaBlaCar

MARIA SOBRINO - Sub-Director at Spanish competition regulator (CNMC)

annex 1: sTakehoLDers inTerVieWeD for BLaBLaCar


insTiTUTe for soCiaL innoVaTion

The mission of the Institute for Social Innovation is to develop the capacities of individuals and organizations in the business and non-profit sectors to strengthen, in its own activities, their contribution to a more just and sustainable world. To this end, the Institute generates and divulge knowledge and provides training in the areas of corporate social responsibility and relationship with stakeholders, leadership and management of NGOs, social entrepre-neurship, sustainability and social innovation.

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The aUThors

heLoise BUCkLanD Bachelors and Masters degree in Modern Languages. Oxford University, 1997Masters of Science in Environmental Policy. Imperial College, 2000Chartered Water and Environment Manager. CEnv She is co-founder of the cooperative Barcelonya, specialized in developing innovative learning, research and communication services for a more resilient society. Heloise has 14 years expe-rience working in education for sustainability in Latin America, Spain and the UK with NGOs, public organisations, universities and business schools. She is one of the founders of the busi-ness association Ecoemprenedors, co-founder of Avalon Sustainability School and founding editor of the magazine Education and Sustainability. Heloise has collaborated with ESADE in teaching and research on CSR, social innovation and sustainability since 2004.

esTher VaLMaster in European Politics. Free University of Brussels Master in CSR. Pontifical University of SalamancaDegree in Translation and Interpreting. Universidad de Salamanca

Esther has worked internationally for 15 years. She started her career in European public affairs consultancy in Brussels and then moved to London, where she worked for the British civil service at the Office of Fair Trading and Ofcom (the communications industry regulator), where she represented the UK in communications-related international policy. She has also worked for the private sector, advising on broadcasting policy as well as ICT and CSR at Dis-covery Networks and Telefónica Europe, respectively. She took a sabbatical in 2012 to volun-teer and travel in Latin America where she started her master’s degree in CSR. Her master’s thesis focused on CSR, social innovation and the sharing economy. She has since worked as a consultant for leading collaborative economy platforms like Etsy and Airbnb and served as an expert evaluator in calls for social-innovation proposals under the EU’s Horizon 2020 programme. Her interests include CSR, social innovation and the collaborative economy as a potential social game changer.

DaViD MUriLLoPhD in Sociology. University of BarcelonaDegree in Humanities. Universitat Oberta de CatalunyaDegree in Business Administration. University of Barcelona

David Murillo has worked in the financial, public and non-profit sectors, where he has gainedexperience in commercial banking, as a local development agent and as an NGO manager inthe field of community mental health, respectively. In 2002, he began his collaboration with the Institute for the Individual, Corporations and Society (now renamed the Institute for So-cial Innovation), first as a Research Assistant and then as a Research Associate from 2006 onwards. Since 2009, he is lecturer of the Department of Social Sciences at ESADE and con-ducts research at the Institute for Social Innovation. David Murillo has served as an advisor on CSR-related issues to the Generalitat de Catalunya, the Ministry of Industry of Spain and the UNDP (United Nations). He regularly presents his research findings at conferences around the world and is a regular contributor to the newspaper Avui.

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