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Sharing economy: ISO standards to regulate this emerging market

Jul 13, 2019

Villa Caroline Flic en Flac Mauritius

Villa Caroline Flic en Flac Mauritius

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The hotel industry in Mauritius is in favor of a minimum control over Airbnb, and confirm that this system, associated with the sharing economy, is gaining momentum in Mauritius and around the world, with a significant impact on the formal sector.

ISO has taken a big step forward by creating a new technical committee, ISO/TC 324

The hotel industry complain that Airbnbs  are subject to less regulations and substantially less overheads. Hoteliers pay several taxes as well as promote Mauritius. Should we forbid Airbnb as was done with Uber? It is clear that the sharing economy poses competition problems. But for consumer organisations, we will have to worry, allowing consumers to benefit from competition. The Consumer Advocacy Platform (CAP) welcomes the initiative of the International Organization for Standardization (ISO) to put in place standards for activities related to the sharing economy.

It is one of the most dynamic sectors of the global economy, showing no signs of slowing down. Books, cars, homes and everything you can imagine, are to share nowadays and it's a huge market. A brand new ISO technical committee has just been created to help this new business model reach its full potential.

Much has changed in the area of ​​the sharing economy since the launch of Airbnb and Uber a decade ago. There were only a handful of platforms and there are now literally thousands. None of them is better off than the other. Some are bankrupt while others are worth, like Uber, whose market valuation has recently reached USD 120 billion.

Opportunities and challenges

The sharing economy was born, at least in part, from the idea of ​​creating communities and fighting against over consumption. While this spirit still exists today, there has been a shift in emphasis towards the desire to pull prices down while offering more amenities, opening the way to many opportunities, but also just as many challenges to overcome. If consumers benefit from lower prices and new forms of products, services or experiences, they are aware that this can sometimes be at the expense of respect to their privacy, or cause problems of reliability or loyalty.

Standardisation can help overcome these pitfalls and take advantage of what this business model can offer, through internationally agreed working methods that take into account the needs of each: consumers, businesses and governments. In 2017, the ISO made a foray into this new economy, bringing together some of the world's leading experts to develop high-level international guidelines and bases for future standards in the form of an International Agreement, workshop, IWA 27, Guiding Principles and Framework for the Sharing Economy .
ISO has now taken a big step forward by creating a new technical committee, ISO / TC 324 , Sharing Economics, to develop International Standards in this area.

According to the chairman of this technical committee, standards can both highlight the positive aspects of the sharing economy and limit the risks and challenges.

One of the first tasks of ISO / TC 324 will be to define internationally agreed terminology and principles aimed at establishing common ground among all stakeholders. The experts will then work to develop standards for the operation and management of sharing economy platforms.

What is the sharing economy?

As the sharing economy grew, it became a victim of its success. Some blame the current sharing economy for not really "sharing," a claim that is partly justified.
The sharing economy generally refers to new modes of consumption that allow consumers to share the use or consumption of products, equipment or services. If the notion of sharing use is at the origin of the term, this sharing or loan, can be free or paid.

The sharing economy generally refers to new modes of consumption that allow consumers to share the use or consumption of products, equipment or services. If the notion of sharing use is the origin of the term, this sharing or loan can be free or paid. We can, moreover, note a more or less strong merchandising of the sharing economy, according to the sectors of activity in the context of which the will is no longer to optimize a mode of consumption, but to generate income. The notion of sharing economy then becomes quite relative.

Collaborative economy

The AirBnB model is a good illustration, we went from a spirit of "sofa bed sharing" to a situation where many actors / investors make it a profession with the development of an ecosystem of providers.

The most "emblematic" areas of activity in the sharing economy are, for example, accommodation sites between individuals, car-pooling or private hire sites (boat, camper, etc.).

Some of these models can cause partial uberisation  of certain traditional actors (seasonal rental agency, hotels, etc.) or disintermediation/reintermediation phenomena.
Sometimes we talk about collaborative economy.

The sharing economy focuses on sharing underutilised assets, whether monetised or not, to improve efficiency and sustainability while helping to strengthen the community. The collaborative economy focuses on collaborative forms of consumption, production, finance and learning (the term "collaborative consumption" is closest to the orthodox definition of the sharing economy).

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