Why Singapore needs the sharing economy

Singapore has invested in efforts to reduce car ownership, manage waste generation, and cut its carbon emissions. Experts point to the sharing economy as a new way to achieve all these goals while also creating new business opportunities in the city-state.

Singapore has declared its plans to be a sustainable city. In the Sustainable Singapore Blueprint 2015, a policy document which maps out the country’s sustainable development strategies, the city-state has set out a collective vision that includes being a “car-lite”, zero waste nation by 2030.

It has also set reduction targets for its greenhouse gas emissions by 2030. Under Singapore’s pledge to the United Nations Framework Convention on Climate Change, it will cut its emissions intensity—that is, the greenhouse gases needed to produce every dollar of national income—by 36 per cent compared to 2005 levels.

Experts say that one largely untapped strategy for Singapore with huge potential is the sharing economy, where people use websites and mobile applications, or apps, to rent, lend, and swap goods and services with one another rather than buying them from shops or commercial companies.

April Rinne, a United States-based sharing economy consultant and World Economic Forum Young Global Leader, says that by encouraging people to pool existing resources instead of buying new goods, “there is no question that the sharing economy can help a society be more sustainable”. 

With its high population density, technology-savvy society, compact urban layout, and a strong government commitment to efficiency, Singapore is perfectly poised to become a sharing nation, adds Rinne, who was in Singapore last month to speak on the sharing economy.

An evolving economy

People have swapped, loaned, and rented items informally for centuries, but the sharing economy—also known as collaborative consumption, peer economy, and access economy, among other names—has gained formal recognition only in recent years. 

The term has come to include everything from services that help neighbours lend each other household items and websites that allow a tourist to stay at a stranger’s home while on vacation, to apps that summon a driver at the tap of a button.

United Kingdom-based business consultancy PwC notes in a 2015 study that peer-to-peer lending and crowdfunding, peer-to-peer accommodation, and car-sharing are among the fastest growing sharing economy sectors globally.

PwC predicts that these sectors—along with online staffing, and music and video streaming—by 2025 will present a global revenue opportunity of US$335 billion, up from US$15 billion in 2013.

These new operating models certainly promise bigger business opportunities and profits, but they are also a chance to change how society uses resources, note experts. 

Eugene Tay, founder and former president of the Sharing Economy Association of Singapore (SEAS)—an organisation set up in 2014 to promote the industry’s growth—notes that “car sharing or carpooling reduces the need to own a car, while the sharing of accommodation or co-working spaces reduces the resources to build more spaces”.

Members of SEAS include local start-ups such as item-lending services Rent Tycoons and Leendy, accommodation sharing site PandaBed and car-sharing firms CarPal and iCarsclub. International home-sharing giant Airbnb is also a member.

Other local enterprises include Carousell, an app for selling second-hand goods, and carpooling services like the Tripda app and ShareTransport.sg, an online community. 

Fenni Wang, co-founder, Rent Tycoons, says that “renting helps to reduce the wastage caused by avoidable purchases—for example, if an item is only needed for a one-off or short-term use”. 

While there are no statistics on how these local companies have helped drive Singapore’s sustainability goals, global firms like Airbnb and on-demand ride service Uber have calculated their environmental impact.

Airbnb, for example, in a 2014 study, found that home sharing helps reduce water and energy use, greenhouse gases and waste generated compared to traditional hotel stays. 

In North America, Airbnb properties used 63 per cent less energy than hotels per guest night, enough to power 19,000 homes for a year. They also consumed 12 per cent less water than hotels, which resulted in savings of 270 Olympic-sized swimming pools in 2013. 

Staying in other people’s homes—most of which already have recycling facilities in place, and tend not to offer guests single-use toiletries like hotels do—also reduced waste, found Airbnb.  

Car sharing or carpooling reduces the need to own a car, while the sharing of accommodation or co-working spaces reduces the resources to build more spaces.

Eugene Tay, founder and former president, Sharing Economy Association of Singapore.

Uber, meanwhile, says its vision is to have “many fewer cars on the road”. In addition to its basic service, called UberX, where people can use the app to call a driver in a few minutes, the company is also rolling out UberPool, which integrates carpooling into Uber’s standard business model. 

First announced in August 2014 and launched in New York City in December that year. UberPool groups users travelling on similar routes and allows them to share a single ride—and the fare.

Not only does this allow passengers to save money, it can also reduce the number of cars on the road, says the San Francisco-headquartered company, which was founded in 2009 and now operates in almost 400 cities worldwide.

According to the company, for every fully utilised UberPool car, eight cars could be rendered unnecessary. This means that in a city like New York, UberPool could eventually result in 1 million fewer cars on the road.

Uber statistics showing how carpooling can help reduce the number of cars on the road. Image: Uber.

Chan Park, Southeast Asia general manager, Uber, tells Climate Challenge that UberPool is likely to be launched in Singapore sometime this year.

Today, over 30 per cent of all Uber trips in Singapore start and end within 100 metres of a train station, Park shares. This likely means that “people are using UberX to complement their public transport use and bridge the first and last mile of their journey,” he says. 

The first and last mile of a journey refers to the distance between a person’s home or office and the nearest public transport node, such as a train station. If commuters find it too inconvenient to bridge this distance—for example, if the walk is too long, or connecting bus services are too infrequent—they may find it more convenient to stick to using a car.

The government is already stepping up efforts to bridge this last-mile gap through measures such as improving bus services in residential neighbourhoods and providing ample bicycle parking at train stations for commuters.

To make it easier and more convenient for people to use bicycles to cover the distance between their homes and train stations, the Land Transport Authority (LTA) in July 2014 announced a study into how a public bicycle-sharing scheme could be introduced in the city-state.

Famous examples of bike-share programmes, where the public can simply rent a bicycle from one location and drop it off at another, include London’s Santander Cycles and YouBike, a public scheme in Taiwan’s capital city, Taipei.

The government is also exploring how shared autonomous vehicles—that is, self-driving cars—can overcome the last-mile challenge in another study, announced by LTA last June. These new vehicles could provide residents with a convenient last-mile solution, and encourage people to shift away from private car ownership, notes LTA. 

Uncovering new opportunities

These reductions in new purchases, waste, and emissions are just the tip of the iceberg when it comes to how the sharing economy can help shape a more sustainable Singapore, say Tay and Rinne. But there are even more ways for the city-state to become a truly sharing nation.

Tay, for example, notes that most sharing businesses today operate on a peer-to-peer model, or in the business-to-consumer space.

“Businesses with underutilised equipment, vehicles, spaces and assets can share with other companies,” he says. If the government does the same, Singapore’s civil service could be “the first sharing government in the world”, he adds. 

One government which has received much praise for its sharing economy initiatives is South Korea’s capital city, Seoul, says Rinne. In 2012, it launched the Sharing City Seoul initiative to promote collaborative consumption and resource sharing. 

To use valuable assets like land more efficiently, the city’s leadership has opened up almost 800 government buildings for the public to hold meetings and events when they are idle.

Guided by a vision to make private car ownership obsolete by 2030, Seoul has also invested heavily in public bicycle sharing services and aims to have 1,200 car-sharing hubs in the city by 2030, up from 292 in 2013. 

Similar public sector leadership could make a big difference in Singapore, says Rinne.

On its part, the Singapore government has already taken several steps recently to facilitate the growth of the sharing economy while at the same time addressing some common concerns regarding the industry such as safety, privacy, and proper taxation.

For example, given the popularity of home-sharing companies like Airbnb, the Urban Redevelopment Authority (URA) is re-assessing a law which states that it is illegal for a person to rent out their home on a short-term basis.

The agency last January embarked on a public feedback exercise to decide whether private residential properties in Singapore should be allowed to be used for stays shorter than six months. At the end of the feedback exercise, URA said that it is reviewing the matter and will announce details when ready.

Meanwhile, LTA has also taken steps to encourage people to carpool, a practice which results in more efficient car use and fewer vehicles on the road.

Until recently, drivers could not accept any compensation for offering others a ride, which discouraged them from going out of their way to offer strangers a ride.

But this changed last May when LTA passed laws allowing drivers to receive payment from passengers as long as it did not exceed trip expenses such as fuel and road tolls. 

Virtually every city in the world is tackling the same uncertainties and regulatory challenges that Singapore is working on, says Rinne. When these issues have been addressed and sharing is the ‘new normal’, it could transform daily life for Singaporeans, she adds.

In an ideal scenario, every resident will tap on sharing services to make life more convenient and save money, and the government will use these platforms to better deliver public services, streamline its own operations, and fulfil the nation’s sustainability goals. 

“This is not an unachievable utopia,” she says. “It is a bold ambition which is 100 per cent doable, and I am more confident that Singapore will get it right than other places”. 

This article was first published on the NCCS website. Subscribe to their newsletter here or follow them on their Facebook page.

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