Future of Sharing: Horizontal Expansion and Light Regulation in China’s Sharing Economy

Kai Jia, a lecturer at the University of Electronic Science and Technology of China and visiting scholar at UC Davis, talks about two models of the sharing economy: one requires the platform to own little capital, like Airbnb and Uber (or Didi Chuxing, largest ride-sharing platform in China). The other model is capital intensive. The bike-sharing startups that have proliferated across China in recent years are an example of this. In this second model, the suppliers are not the consumers, Jia says, but rather, the suppliers are the companies. Because bike-sharing grew so quickly in China, the industry has very little regulation, and there are so many bikes that they have become a source of waste and overproduction rather than a means for creating more sustainable cities. On the positive side, bike-sharing apps are often far more convenient than alternative forms of transportation, and don’t contribute to the pollution of China’s cities. Jia argues for increased regulation of the sharing economy on the part of the government, and points out that Chengdu has recently issued guidelines around sharing university parking lots. The government can choose to either impose regulations on the platform itself, or on the behavior of the users, says Jia.

While home-sharing is becoming more popular among the younger generations in China, Jia says, it is still far less popular than bike-sharing. Jai speculated that this could be due to a cultural discomfort with the idea of opening one’s home to strangers. The bike-sharing model has recently been translated to cars in China, according to Jia, through a company called Meituan (similar to ZipCar in the United States) and to phone chargers, which can be rented for a short period of time at places like restaurants and airports. The horizontal expansion of platforms is also booming in China, Jia explains. For instance, the app that you use to unlock a bike may recommend a restaurant in the vicinity. Alibaba and Tencent, two of China’s tech giants, are prime examples of Chinese platforms with huge user bases and potential for even more horizontal expansion—Alibaba already owns Youku (similar to YouTube) and the payment platform Alipay. Jia predicts that the Chinese sharing economy will only continue to grow in popularity, first because consumers are getting more used to the concept, and second because the government is getting involved and using policy tools to help the sharing economy endure.