Innovation: Why sharing is the next revolution

Uber, the controversial ride-sharing app founded in 2009 lets car owners act as taxi drivers. Photo / Dean Purcell

Anyone with a computer can now potentially become an online business

The sharing economy, as it is known, comprises businesses built on the sharing of resources - the most popular of which have so far been accommodation and transport. The real key is a decoupling of ownership and benefit through the use of technology - in turn creating new efficiencies.

Already we're seeing the sharing economy transform legacy industries which previously seemed untouchable. The sharing economy is effectively an extension of the revolution we saw eBay and Trade Me make with online sales - allowing anyone with a computer to become an online business - simultaneously disrupting the market for everything from garage sales to small business operations.

Now it's service providers who are under threat, as the likes of Uber and AirBnB go head to head with traditional taxi services and hoteliers.

Uber, the controversial ride-sharing app founded in 2009 lets car owners act as taxi drivers, connecting drivers with passengers through their app, slashing the prices of a usual taxi service and drawing a whole new demographic of clientele to the service. The app is now available in 53 countries and 200 cities around the world, making waves with slick marketing and raising the tempers of taxi drivers to boiling point.

In New York, the iconic yellow cabs long associated with the Big Apple are now outnumbered by Uber - the city's Taxi and Limousine Commission last week announcing 14,088 registered Uber cars compared with 13,857 yellow cabs. Though the sheer number of rides still comfortably favours the yellow cabs, it's a staggering achievement considering Uber was only introduced in 2011.

AirBnB was established in 2008 with the initial concept literally an air bed and breakfast -- an air mattress in the lounge and breakfast in the morning - somewhere in between couch surfing and a youth hostel. The business has boomed in the years since, now offering accommodation at all levels of the market - be it a spare couch or a luxury villa. AirBnB has more than 1000 accommodation options available in New Zealand alone.

Uber is now one of the 150 biggest companies in the world, it's value eclipsing US$40 billion and leaving behemoths of yesteryear like FedEx in its dust. AirBnB is valued at $13 billion - about half as much as Hilton Worldwide.

However, both still operate in a relative grey area of the law in New Zealand - and the ongoing political divide seen internationally could be a sign of things to come here.

Opponents argue the services are not sufficiently regulated and are fertile ground for cowboys looking to make a quick buck, with the stringent requirements expected of licensed operators and the costs to meet those creating an unfair playing field.

Las Vegas, backed by one of the strongest taxi authorities in the world has led a fight back against ride-sharing apps - with a recent court ruling forcing Uber to withdraw from the market pending a decisive legal decision. Throughout Europe taxi drivers have blockaded national highways and staged enormous protests against Uber.

It's a matter of the law playing catch-up and figuring out how to stay ahead of a rapidly evolving phenomenon - hardly a quality that lawmakers have ever been associated with. We've seen trouble already in New Zealand with police stopping rides, throwing passengers out of cars and fining drivers. Despite that, the Government is still quick to clip the ticket on each and every fare.

One Uber driver, who wished to remain anonymous, opined on a recent trip "it is hypocritical of the government to take GST from us when they're outlawing and interrupting our services. We should be able to operate legally and pay our taxes like any other business, not be treated like a criminal yet still expected to pay up."

We've seen the Government step up to the plate with laws around crowd funding and crowd lending - very much a work in progress on which the jury is still out. The sharing economy must be next on the agenda - to provide certainty to workers, to ensure that safety and best practices are followed regardless of the operator, and to make sure government coffers are taking their fair share - not forced into a situation where they're playing catchup a-la online GST.