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Boom year for the Sharing Economy

Milan - Will this year go down as the year when private ownership ceased to exist? Probably not - it might not go quite that far - but many observers think 2014 will be a boom year for the sharing economy, or the economy of collaborative consumption, as it’s known in English.

Milan - Will this year go down as the year when private ownership ceased to exist? Probably not - it might not go quite that far - but many observers think 2014 will be a boom year for the sharing economy, or the economy of collaborative consumption, as it’s known in English. The recession might to be coming to an end, but a lot slower than expected, so people still have a real incentive to combine innovation with cost effective solutions. This year in fact, all these business ideas based on sharing goods or services, like car sharing, house exchanges, rentals between private parties, co-working, and many more have shown considerable growth. In Italy - where a website has been created to catalogue all of these opportunities, collaboriamo.org - the change is especially noticeable in Milan, where the car sharing service Car2go has had significant, and to some degree unexpected success: this is because you can leave shared cars anywhere you like, you can find the nearest one with a smartphone app, and it’s free to enter Central Milan’s Congestion Charge Zone.

Bicycle and car sharing, which arrived in Italy only recently, were based on pioneering Parisian models. The Parisian electric car sharing system Autolib’ is used 10,000 times per day, and the bike share system, Velib’, has more than 240,000 members. Using the site leboncoin.fr, privately owned objects can be bought and sold. In France this service is undermining the online sales giant Ebay. Of course most things start out in the United States. In New York alone, 24,000 private apartments are available for use as bed and breakfasts through the Airbnb service, which is the market leader in China, where it doesn’t even have an office. But sharing might not be quite the right word for this phenomenon, because these are really mini-rentals, or buying and selling something at prices that are generally lower, with more attractive terms than those offered by B&Bs or classic hotels. And it also helps that these kinds of activities are not yet regulated by the tax authorities: if you open a traditional B&B anywhere in the world, you’ll have to pay taxes, and it’s the same if you rent an apartment. But with Airbnb you only pay the company’s commission, and there is a case that has been before a New York court for quite some time on this very issue.

Who’s to say in fact that people shouldn’t rent out furnished rooms professionally like this, or use “ride-sharing” services to set up unlicensed taxi services? Uber and Lyft, two of the most popular “ride-sharing” services in the United States, are already being sued. That’s not the case when it comes to sites that facilitate rentals of things that we rarely need to use at home, like power tools, drills, planers, or gardening tools, which are very expensive and used very infrequently. In the United States it is estimated that 80 million tools of this sort are already in circulation, and these are used for thirteen minutes on average. In these cases, renting tools only when they are needed works out well for everyone. That is, except for the producer. And that’s why, aside from the issue of taxation, this battle between producers and consumers will be the most important source of conflict between the traditional economy and the sharing economy.

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