Will COVID-19 Cause a Rewind on Sharing Economy’s Sustainability Progress? 

May 1, 2020 | COVID-19, Insights

Ridesharing, micro-mobility services like scooters and bike shares, coworking spaces and couch surfing, among hundreds of other services in the rapidly growing “sharing economy” are now themselves disrupted by the Covid-19 pandemic, as the industry relies on shared, reused and repurposed goods services in most cases which require high touch, human contact and interaction.

The sharing economy is perfectly situated between the need for climate-oriented solutions and digitally accessible services. As we rebuild our economy and emerge from this global pandemic, we absolutely need to be focused on ensuring we rebuild better—to address the clear inequalities that have always been here but are now sorely exposed, alongside preparing for the next crisis, climate change.

Many companies in the sharing economy have limited their services or shut down operations entirely following stay-at-home ordinances, even as they promote actions that focus on disinfection initiatives and supporting their service providers.

Sudden Slowdown of the Sharing Economy

Like many parts of our economy that have been put on pause, sharing platforms aren’t considered essential in many cases nor are they compatible with social distancing and stay-at-home orders. The sharing economy relies on a certain comfort level in dependence on others, which of course is in conflict with the primary mechanism to slow the spread of the virus.

In particular, the companies suffering the most are those that provide services tied to physical activities like ridesharing, commuting and anything related to travel and leisure. Many companies in the sharing economy have limited their services or shut down operations entirely following stay-at-home ordinances, even as they promote actions that focus on disinfection initiatives and supporting their service providers.

Another painful truth of the sharing economy is not only that it relies on consumers for growth, but that it relies on those same consumers as their employee base (often without standard employee benefits). It’s a double whammy.

Initial responses from leaders in the sharing economy sought to de-risk and mitigate their exposure:

  • Other services like Airbnb continue functioning, though have experienced significant reductions in revenue.
  • Both Uberand Lyft suspended Uber pool and shared rides in the US and Canada, and Uber committed to 60-70% ride cuts in hard-hit cities.
  • Lime quickly moved to shut down all services and are focusing on enhancing their sanitation methods.
  • Instacart, has announced an intention to hire 300,000 additional workers due to increased demand for home delivery, which also provides a lifeline for the restaurant industry.
  • Dating apps are processing increased traffic and ramping up their chat and virtual functions as users seek an outlet for their isolation.

Services for Common Good

And yet even as we all continue to struggle through this crisis, a few companies are now using their unique position in the economy to deliver a service approach that supports society and meets public needs in the present.

For example, despite significant losses, Airbnb demonstrated their dedication to supporting over 100,000 health-care providers by partnering with global health organizations to provide them with housing. Lime announced a new program called Lime Aid, reactivating small fleets of scooters in select global cities with free 30-minute rides for public-health personnel and law enforcement officers. They will expand this program in the coming weeks. And Uber has pledged 10 million free rides and deliveries of food for frontline health-care workers, seniors, and people in need around the world, as well as a Work Hub for their drivers to find new job opportunities.

The Sharing Economy Post-COVID-19

When we enter the post-Covid-19 world, will concern over virus-spreading continue to disrupt the sharing economy? A Statistica Research Department poll from early April found that 27% of respondents will be less likely to use sharing services after distancing guidelines are lifted, while only 19% said they will be more likely. That’s troubling, so revisiting consumer appetites for shared goods and services periodically as we emerge will be an essential barometer of a different kind of health.

Perhaps the wider digital audience gained through virtual connectivity during isolation might translate to engagement in sharing economy services post-Covid-19 at a scale not otherwise seen before. Or perhaps a global crisis sparked by a physical threat will make the need for climate action apparent to a wider audience.

As we rebuild a better economy that addresses inequities and climate change, this means a rapid transition to a renewable energy, clean transportation, reducing our carbon emissions, all likely enabled and fast-tracked by the combination of market and policy instruments that provide a foundation for a low-carbon economy.

The first rounds of the CARES financial aid package were stripped of much support beyond getting money quick and fast in people’s hands, and understandably so—but there have now been some shining examples of how states are addressing both recovery and aid with ‘Green New Deal’ like policies.

For example, on April 3, New York State announced the passage of the New Clean Power Plan as a path forward to address both climate change and the economic recovery from the Covid-19 crisis. We will need to see more of this kind of forward-looking regulation locally, regionally and globally to meet the need for climate action, with sharing economy being a piece in the puzzle.

The real challenge we face as we emerge from the pandemic is leveraging our newfound sense of solidarity for action on the climate crisis. We now have a once in a lifetime opportunity where all our systems are going through a forced, hard reset.

Will isolation transform into collective action?

Climate change, like the pandemic and our business operations—knows no borders. The real challenge we face as we emerge from the pandemic is leveraging our newfound sense of solidarity for action on the climate crisis.

We now have a once in a lifetime opportunity where all of our systems are going through a forced hard reset. We are unplugging from the wall, waiting 5 seconds (weeks?) and then plugging back in—but in this case we have the potential to reboot to new operating system. We know it will be all too easy to slip back into our old status quo.

And yet, the collaboration, creativity, and dedication to service demonstrated in the last month shows us all what is possible—a new normal. Post-isolation, we are hopeful that people will come together in ways we’ve never experienced before. For the sharing economy, this could mean a cultural revival of the “own less, share more” mentality, continuing a build of momentum to meet the demands of the decisive decade.

Josh Whitney is an Executive Director at Anthesis and leads the new Ventures business in North America and previously led the company’s science-based targets initiative and technology sector services teams.

This article first appeared in Bloomberg Law, May 2020. View it here.

Josh Whitney
Executive Director, Anthesis Ventures

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