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.

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[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.

Consumers International launches bid for UN recognition of World Consumer Rights Day

This week at the UNCTAD Roundtable on the ‘UNGCP International

Framework for the Protection of Consumers’ I was delighted to announce that Consumers International is calling for World Consumer Rights Day to be formally recognised by the UN as an international day within the UN calendar.

World Consumer Rights Day (WCRD) is a fantastic annual celebration that unites consumers around the world. Now is the time for the UN to recognise this day formally and in doing so deliver even more to raise awareness of consumer rights.

For the last 33 years, consumer organisations around the world have joined together on March 15 to mark World Consumer Rights Day; a day that plays a vital role in raising awareness of consumer rights around the globe. The event is regularly marked in more than 90 countries around the world and a wide mix of consumers, consumer organisations, government consumer agencies and international organisations take part.

Formally recognising World Consumer Rights Day as an International Day as already exists for women, the environment, health, children, amongst many others, could help this important annual moment play an even more powerful role in raising awareness of consumer rights and highlighting inadequate consumer protection.

Given the historic adoption of the revised UN Guidelines for Consumer Protection that was achieved at the end of 2015, which recognised important new protections for consumers, there is now an urgent need to raise awareness of these protections for consumers around the globe.  UN recognition of World Consumer Rights Day can play a crucial part in this. At a time when Consumers International has unprecedented engagement from Consumer Protection Agencies around the world, we have an excellent opportunity to campaign for UN recognition for the most important day in the global consumer rights calendar.

World Consumer Rights Day

It is a truly international event. Previous themes for the day have included campaigns on basic rights, safe food, GMOs, trade, public utilities, healthy diets, financial services, phone rights, energy. The day is used to raise awareness of existing rights and shine a light on areas where there is inadequate consumer protection in place. Celebrated by the majority of countries around the world activities marking the day have included media stunts, public meetings, marches, social media campaigns and the publication of test results, surveys and opinion pieces.

The date itself was chosen to commemorate a Special Message to the US Congress made by President John F Kennedy in 1962 in which he formally addressed the issue of consumer rights. He was the first world leader to do so.

A global challenge

Despite this global celebration, we all know that many consumers still face real challenges in their everyday lives, from a lack of access or poor quality goods and services, as well as unfair practices. There is much more to be done to raise awareness of consumer rights amongst consumers, governments and business.

As President John F Kennedy said in his message to the US Congress in 1962,

'Consumers by definition, include us all. They are the largest economic group, affecting and affected by almost every public and private economic decision. Yet they are the only important group... whose views are often not heard.'

UN recognition for WCRD would be another step towards meeting the challenge that President Kennedy set out more than 50 years ago.

Official UN recognition

Official UN recognition can help to put consumer rights on the map of even more organisations, governments, companies and media outlets. It can help to raise awareness by engaging more people, in more activities, in more countries.

For our Members we expect it will make it more possible for them to get coverage of their activities and secure the participation of senior figures from government or business. It will also help to introduce consumer rights to new groups and help them realise the contribution that consumer rights can make to fairer and stronger economies, poverty reduction, improved health and safety and many other issues that affect people today.  At this time of promoting the UN Sustainable Development Goals there is further justification for the need for UN recognition.

Achieving UN recognition requires the support of Member states at the UN General Assembly. But, with the adoption of the revised UN Guidelines for Consumer Protection – and the urgent need to raise awareness of these protections, alongside the promotion of the UN Sustainable development Goals and the quality of our engagement with national Consumer Protection Agencies, we feel we are in the best possible place to put World Consumer Rights Day on the UN map.

We are asking CI Members to contact their Regional Networker for more information on how to get involved.

Safer Cars: Increased safety is paramount

Antonino Serra Cambaceres, Consumers International's 

Global Programme Manager for Consumer Justice and Protection, outlines why Electronic Stability Control (ESC) is needed in all vehicles following his personal experience of an ESC test on a race track in Sao Paulo, Brazil.

The figures speak for themselves: every year more than 1.2 million people worldwide die from automobile accidents. Car safety is, therefore, an important issue and deserves the attention of those who advocate greater safeguards for consumers.

Consumers International (CI) is working on and supporting campaigns around the world to make cars safer. One way we are doing this is by calling for the inclusion of technological innovations in cars that help decrease the risk of fatal accidents. One of these new technologies is Electronic Stability Control (ESC), a device that allows cars to stabilise when a sudden and unexpected manoeuvre occurs, reducing the risk of roll-overs.

Many countries, including the United States, Israel, Ireland, Japan, Russia, South Korea and Turkey have decided that all new cars sold in their territories must have ESC. In the case of the United States, mandatory ESC was introduced in all new cars in 2012. It is estimated that the device has since saved more than 6,000 lives.

In Latin America the use of ESC is still a pending issue. In Brazil, the government expects that ESC will be mandatory for all new vehicles by 2022, a period too long for PROTESTE - Associação Brasileira de Defesa do Consumidor, one of CI's Brazilian Members , which launched a campaign to establish the device as mandatory by 2018, the date when it will be mandatory in Argentina.

On March 23, PROTESTE invited Brazilian and Mexican journalists for a demonstration of ESC at the Interlagos circuit in the city of Sao Paulo. The idea was to test two identical vehicles, one of which had ESC and the other not; a professional test driver was responsible for manoeuvring both cars with journalists as passengers, so they could personally experience the differences of stability in one car compared to the other.

I was fortunate  to do the test and confess that the result was striking. The driver took us first to the car without ESC by a part of the track and indicated, before performing sudden manoeuvres, the risks entailed with such movements. He then went to another part of the track that had been prepared in advance with cones and a copiously wet pavement and performed the same manoeuvres; showcasing the differences with the dry track. He later ran the tests with the car with ESC. The differences between the two were noticeable, and I experienced in practice how the car with ESC could quickly stabilise to prevent it from skidding or rolling over.

There is no doubt that this technology is essential in avoiding many of the accidents that occur today. Contrary to what one might suppose, the cost of including it in a car only makes a marginal impact on the final cost of the vehicle. We were informed that in Brazil the cost of installation is around USD $50. If we consider the price of some purely aesthetic car accessories like alloy wheels, spoilers or chrome fittings, or stereos that far exceed this figure and which are superfluous, the conclusion is that the inclusion of ESC should be urgent in all new models of cars.

Some luxury cars sold in Latin America already have ESC, raising the sad dichotomy that to have greater security more money is needed; the most popular cars that have the highest sales figures could still wait many years to include an essential device which, as noted, does not involve a significant cost.

We expect the Brazilian government to take note of this and bring forward the introduction of ESC in all cars to 2018. We also expect other Latin American governments to react, making ESC mandatory equipment for all vehicles as soon as possible.