Monday, 23 May 2016

Collaborative consumption: From value for users to a society with values

Amaya Apesteguía, Ethical and Collaborative Consumption Project Officer at Consumers International (CI) Member OCU, Spain, reports on the findings of a pioneering piece of research she coordinated on the sharing economy and collaborative consumption.

Carpooling, P2P accommodation, repair cafés, bartering networks, social eating and micro-task sites are just some of the Collaborative Consumption (CC) activities and services that have exploded over the last decade. Driven by technological innovation, all signal a change in the consumption habits of citizens, a shift from a conventional Business-to-Consumer (B2C) model, where the providers of goods and services are always commercial companies, to a Peer-to-Peer (P2P) model based on direct exchanges between consumers. 

Last year, I had the opportunity to coordinate[1] some very interesting international research about this phenomenon. Entitled "Collaboration or Business", it used a multi-method design involving 33 experts, over 8,600 consumers, and a sample of 70 P2P CC platforms across four participating countries.

If I could underline five key- findings, I would choose the following:

1. Collaborative consumption has high levels of awareness and involvement amongst those citizens that responded to the survey, and satisfaction is very high. Only a small percentage of respondents reported being dissatisfied. Reasons for dissatisfaction seemed to be mainly small inconveniences: delays, coordination between parties, cleanliness, lack of personal connection. Unfortunately, the most common way for participants to deal with problems was to do nothing! Not even writing a bad review in the web profile of the other party. Our learning is that better conflict resolutions systems should be put in place by the platforms, as current systems do not seem to be so effective. 

2. Consumers’ reasons for participating in CC are diverse, but the two most frequently mentioned are economic (saving or earning money) and practical reasons (flexible hours, better meets needs, easier, etc.). Ideological motivations included reasons such as “to foster economic relationships between private persons”, “protecting the environment”, “getting to know local people”, “sharing experiences”, and “altruism (donating)”.

3. The legal environment is extremely complex due to the variety of applicable laws, which depend on the status of the parties involved, and also because CC establishes a two level relationship: firstly, between the user and the platform, which is governed by e-service and e-commerce regulations; and then the relationship between users (peers) themselves, where the civil code applies. Additionally, the participation of professional providers on CC platforms adds to the complexity, as consumer protection laws become relevant and must be enforced. Airbnb provides one example of this two level relationship. 
The Airbnb platform lists accommodation from peers with space to offer, and offers a “safe environment to operate” - adding virtual reputation systems, insurances, and electronic payment options. But the booking itself is made between peers.
Overall, we concluded that Peer-to-Peer CC should be simplified rather than over-regulated. However, in B2C relationships, the existing consumer protection regulations should be reinforced.

4. Determining the social, economic, and environmental impacts of CC was a challenging exercise. From our data, it is clear that CC platforms are efficient but their governance models are still far from being collaborative, as the vast majority of the surveyed platforms favour centralised governance models. While some of the platforms articulate positive associations between sustainability and their operations (and in some instances make ‘green claims’), they provide no evidence about how their activities actually benefit the environment.

5. A platform’s orientation is not just a question of what they do but also of how they do it. The balance between business and collaboration varies greatly from one platform to another, even within the same sector. There are three typologies of platforms: 
  • Network oriented: aimed at creating networks of users connected by their common interests and digital reputation. For example: Airbnb and BlaBlacar.
  • Transaction oriented: to facilitate easy and practical exchanges between users. For example: Homeaway and Uber Pop.
  • Community oriented: a transformative paradigm that aims to create stronger communities and promote more sustainable consumption habits. For example: WWOF, Wijdelen (Peerby), Freecycle.

Through this research we’ve seen that platforms act as intermediaries that create a safe environment for users, but they do so through a centralised governance model, whereby they process and control all exchanges. As a result, a risk exists of creating a monopoly or a power imbalance between platform proprietors and their users. 

In the future, blockchain technologies look set to enable direct relations between users. This technology where “the code is the law”, could obviate the need for platforms as such - opening the door to a future of distributed and decentralised relations. Technological innovation challenges the traditional way of doing business and can be a powerful tool for consumers. But the real revolution is not technological, it’s ethical: people owning the technology to create “human” P2P economic exchanges in a fair and safe way.

[1] The research involved four consumers associations - OCU (Spain), Altroconsumo (Italy), Deco Proteste (Portugal), and Test-Achats/Test-Aankoop (Belgium) – in collaboration with Cibersomosaguas (Universidad Complutense of Madrid) and with the advice of Ouishare Spain.

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