Sharing economy in transition

Sharing Economy

I have been intrigued by the emerging sharing economy.  Technology, internet are combining to make this simple concept (we share surplus resources for maximum public good) viable. Uber, Grabtaxi and the likes help to link up (surplus) supply with demand, leading to better resource utilisation and consumer welfare. Like all new business models, there will be winners and losers. But if consumers benefit, the models are likely to survive or even flourish, no doubt, with modifications along the way as dictated by the market.

Some of the applications may even transform lifestyles. See the huge uber market capitalisation and how the young have taken to uber and airbnb.

Some countries, like Germany, have banned uber and its likes. Some like, New York, tried to ban it at first but have now decided to hold back in response to commuters’ unhappiness.  I think they have over-reacted and have been hasty in their judgement on such new business concepts. A balanced approach is called for.

TaxisSingaporeans have responded well to such innovations. Commuters find it easier to call a taxi. Taxi operators do not welcome it but forced to compete, have been able to rise to the challenge, to the benefit of commuters.

Taxi drivers have also welcomed uberTAXI, as they saw their business improve. However, during the recent GE campaign, quite a number of taxi drivers have told me that “uberX is unfair”.  I was surprised.  Apparently, uberX signs on drivers to drive private hire cars to provide a booking type of transport service, and these drivers do not need a vocational licence unlike taxi drivers. While taxi drivers welcome competition, they demand that the playing field be level. I think our taxi drivers have a point.

MOT will study this, and where justified, we shall level the playing field.  I have asked SMS Ng Chee Meng to take on this assignment, consult our taxi drivers and the general public, and forge a fair solution.

We must not resist new innovations and new business models.  Our instinct must be to flow with the time, keep an open mind to innovations.  But we must always be fair to players, whether incumbent or insurgents, and strike a balanced approach.

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