Multi-dimensional Collaborative Governance of Urban Sharing Platforms [1 ed.] 9789819939732, 9789819939749, 9819939739

Table of contents :
Preface
General Preface for the series Public Economy and Urban Governance in China
Contents
1 Introduction
1.1 Research Background
1.2 Research Purpose and Significance
1.3 Technology Roadmap
2 Related Theory and Literature Review
2.1 Definitions of Related Concepts
2.1.1 Connotation of Sharing Economy
2.1.2 Characteristics of Bilateral Platforms of Sharing Economy
2.1.3 Governance, Supervision and Control Differentiated
2.2 The Development of Sharing Platforms and Urban Construction
2.2.1 Development Model of Typical Urban Sharing Platforms
2.2.2 The Effect of Sharing Platform Development on Urban Construction
2.3 Self-governance of Sharing Economy Platforms
2.3.1 The Evolution of Self-governance Theory
2.3.2 Logical Relationship Between Sharing Economy and the CPRs Theory
2.4 Government Governance of Sharing Economy Platforms
References
3 An Overview of the Development of Sharing Platforms and Urban Construction in China and Other Countries
3.1 Status Quo of Sharing Economy Platforms
3.1.1 An Overview of General Development
3.1.2 Development Status of Urban Ride-Sharing Platform Enterprises
3.1.3 Development Status of Urban Sharing Accommodation Platform Enterprises
3.1.4 Development Status of Urban Office Sharing Platform Enterprises
3.2 The Impact of the Development of Sharing Platforms on Urban Construction
3.2.1 Short-Term Impact of Sharing Platform on Urban Construction
3.2.2 Long-Term Impact of Sharing Platforms on Urban Construction
3.2.3 Mechanism Function of Sharing Platforms on the Construction of Some Tourist Cities
References
4 The Governance Experience of Urban Sharing Economy Platforms in China and Other Countries
4.1 Common Problems in the Governance of Urban Sharing Platforms
4.2 The Governance Experience of Sharing Economy Platforms in Some American Cities
4.2.1 Restrictions on Airbnb Access in New York State
4.2.2 Tax Controls of Airbnb in Los Angeles
4.2.3 Restrictions on Uber Access at Airports in Other Cities
4.2.4 The General Attitude to Governance of the US Government
4.3 The Governance Experience of Some European Cities
4.3.1 Introduction of EU Sharing Economy Guidelines
4.3.2 Incentives for House and Car Sharing in London, UK
4.3.3 Incentives and Restrictions for Car Sharing in Paris, France
4.3.4 The Ban on Uber Access in Rome, Italy
4.3.5 Restrictions on Airbnb Access in Berlin, Germany
4.4 The Governance Experience of Some Asian Cities
4.4.1 Deregulation of Sharing Platforms in Seoul, South Korea
4.4.2 Standardized Governance of House Sharing in Tokyo, Japan
4.4.3 Experience of Governing Airbnb Platform in Hong Kong
References
5 A Study of Self-governance of Urban Sharing Platforms Based on the CPRs Theory
5.1 Principles of Self-governance of Urban Sharing Platforms
5.1.1 Nested Boundaries of Urban Sharing Platforms
5.1.2 Sharing Platforms to Rely on Local Resource Conditions
5.1.3 Sharing Platforms as the Wisdom of Collective Choice
5.1.4 Effective Self-supervision of Sharing Platforms
5.1.5 Internal and External Sanctions of Sharing Platforms
5.1.6 Sharing Platforms Required to Avoid Internal and External Conflicts in the Industry
5.1.7 The Relatively Independent Organization Rights of Sharing Platforms
5.1.8 Decentralization of Sharing Platforms
5.2 Scope of the Self-governance of Urban Sharing Platforms
5.2.1 Internal Selection Variables Affecting Participants of Sharing Platforms
5.2.2 Advantages of Institutional Supply
5.2.3 Credible Commitment and Mutual Supervision
5.3 Effects of Self-governance of Urban Sharing Platforms
5.3.1 Overcapacity: Aggravation or Mitigation
5.3.2 Negative Externality: Increase or Decrease
5.4 Coordination Between Self-governance and Government Governance
5.4.1 Multi-center Governance of Urban Sharing Platforms
5.4.2 Prior Access Based on Equity and Security
5.4.3 Post-regulation Based on Normative Self-governance
References
6 Multi-dimensional Collaborative Governance of Urban House Sharing Platforms
6.1 Self-governance of Urban Accommodation Sharing Platforms
6.1.1 Contents of the Self-governance of Accommodation Sharing Platforms
6.1.2 Coordination and Conflict Between Shared Accommodation and Urban Public Resources
6.1.3 Defects of Self-governance of Accommodation Sharing Platforms
6.2 Coordination Between Self-governance and Government Governance of Accommodation Sharing Platforms
6.2.1 Collaborative Governance Between the Government and Accommodation Sharing Platform Enterprises
6.2.2 Collaborative Co-governance of Accommodation Sharing by the Government, Platforms and Society
6.3 Self-governance of Urban Office Sharing Platforms
6.3.1 Self-governance Content of the Office Sharing Platform
6.3.2 Coordination and Conflict Between Shared Office and Urban Public Resources
6.3.3 Defects of Self-governance of the Office Sharing Platform
6.4 Collaboration Between Self-governance of Office Sharing Platforms and Government Governance
6.4.1 Collaborative Governance Between the Government and Office Sharing Platforms
6.4.2 Collaborative Governance of Co-working by the Government, Platforms and Society
References
7 Multi-dimensional Collaborative Governance of Urban Ride-Sharing Platforms
7.1 Self-governance of Urban Car-Sharing Platforms
7.1.1 Contents of Self-governance of Urban Car-Sharing Platforms
7.1.2 Coordination and Conflict Between Car-Sharing and Urban Public Resources
7.1.3 Defects of Self-governance of the Car-Sharing Platform
7.1.4 Car Seat Sharing
7.2 Collaboration Between Self-governance of the Car-Sharing Platforms and Government Governance
7.2.1 Collaborative Governance Between the Government and Car-Sharing Platform Enterprises
7.2.2 Collaborative Governance of Car Sharing by the Government, Platforms and Society
7.3 Self-governance of Urban Bike-Sharing Platforms
7.3.1 Contents of Self-governance of Urban Bike-Sharing Platforms
7.3.2 Coordination and Conflict Between Shared Bikes and Urban Public Resources
7.3.3 Defects of Self-governance of Bike-Sharing Platforms
7.4 Collaboration Between the Self-governance Bike-Sharing Platforms and Government Governance
7.4.1 Collaborative Governance Between the Government and Bike-Sharing Platform Enterprises
7.4.2 Collaborative Governance of Shared Bikes by the Government, Platforms, and Society
References
8 The Mechanism of Multi-dimensional Collaborative Governance of Urban Sharing Platforms
8.1 The Premise of Multi-dimensional Collaborative Governance of Urban Sharing Platforms
8.1.1 Universal Characteristics of Self-governance of Urban Sharing Platforms
8.1.2 Common Defects of Self-governance of Urban Sharing Platforms
8.2 Collaboration Between Self-governance of Urban Sharing Platforms and Government Governance
8.2.1 Building an Access Mechanism for the Sharing Economy Industry Based on Fair Competition and Security
8.2.2 Adjusting Taxes According to Local Conditions
8.2.3 Post-event Management: Punishment and Reward
8.3 Social Co-governance of Urban Sharing Platforms
8.3.1 Improvement and Communication of the Credit Investigation System
8.3.2 Improvement of Sharing Supporting Facilities
8.3.3 Community Co-governance of Urban Sharing Platforms
8.3.4 Reconstruction of Urban Public Space
8.3.5 Establishment of Sharing Platforms of the Urban Agglomeration
References
9 Conclusion and Prospects
Postscript

Citation preview

Public Economy and Urban Governance in China

Jiachen Li

Multi-dimensional Collaborative Governance of Urban Sharing Platforms

Public Economy and Urban Governance in China Series Editor Bojun Wu, East China University of Science and Technology, Shanghai, China

This book series aims to promote the research in innovation-driven development of public economy and urban governance in China, and ultimately the social governance model based on collaboration, participation, and common interests enhancing the foresight, precision, and efficiency of urban governance. Focusing on the urban governance of Chinese top megacities, this book series combines economics and sociology and explores a new way to solve problems of social governance concerning urban public goods supply mechanism, innovative models of social governance, as well as critical urban development issues like public safety, infrastructure and environmental pollution.

Jiachen Li

Multi-dimensional Collaborative Governance of Urban Sharing Platforms

Jiachen Li Glorious Sun School of Business and Management Donghua University Shanghai, China Translated by Lei Wang Shanghai International Studies University Shanghai, China

ISSN 2948-1872 ISSN 2948-1880 (electronic) Public Economy and Urban Governance in China ISBN 978-981-99-3973-2 ISBN 978-981-99-3974-9 (eBook) https://doi.org/10.1007/978-981-99-3974-9 Jointly published with East China University of Science and Technology Press Co., Ltd. The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: East China University of Science and Technology Press Co., Ltd. © East China University of Science and Technology Press Co., Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface

Sharing economy has established a new mode of market transactions. Due to the high density of urban population distribution and the support of internet technology, the development of sharing platforms has been going hand in hand with the effect of urban governance. Starting from the concept of sharing economy and reviewing relevant Chinese and foreign literature, this book has distinguished the connotations of sharing economy, traditional second-hand transaction, and rental economy, and analyzed the developmental model and the current situation of urban sharing platforms and the mechanism underlying the effect of sharing platforms on urban construction. It has been found that urban sharing platforms are marked by, among others, excessive competition that leads to the waste of urban resources, security issues that cry for urgent resolution, and tension caused by unfair competition between sharing economy and traditional industries. Effective governance methods must be sought after to solve these problems. In this regard, an analysis of the governance experience of sharing economy platforms in Chinese and foreign cities has produced two major motivations for the governance: one is the chaos caused by the resistance from traditional industries to sharing economy platforms due to unfair competition; the other is the negative external disturbance of the original urban order brought by sharing behavior. As a result, many urban managers have adopted strong control measures to directly restrict the entry or prohibit the operation of sharing economy. This kind of governance is at the expense of the economic efficiency brought by sharing economy. To find a suitable mechanism governing urban sharing platforms, this book introduces the self-governance model in line with the common-pool resources theory. By studying the principle underlying the need of the self-governance model of sharing platforms, specific self-governance contents, and current problems and challenges of self-governance in the industry, this research finds that the governance of sharing platforms needs to be conducted, on the basis of self-governance, in cooperation with government governance and social public environment. Further analysis of the multi-dimensional collaborative governance of accommodation sharing platforms, office sharing platforms, car sharing platforms, and bike sharing platforms finds that the self-governed urban sharing platform can take advantage of its own key v

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Preface

technologies, clarify the transaction boundary, improve the efficiency of resource allocation, and implement self-feedback and supervision. At the same time, the government can reduce the negative external effects of the sharing platform transaction, improve the transaction security, and promote fair competition through the means of local tax regulation, the issuance of urban space resource utilization permit, the improvement of supporting facilities, and the construction of credit investigation system. Furthermore, as the grassroots units of the city, the community can involve itself in the concerted and collaborative governance of urban sharing platforms through multi-party participation, real-time feedback, and improvement of supporting facilities. Finally, the book puts forward specific policy recommendations from many aspects, for example, information screening of sharing industries to prevent blind following and over-investment, setting a reasonable entry threshold for sharing economy, encouraging enterprises in the city to share idle high-end equipment, logistics chain, and transportation chain in order to form an urban sharing alliance, and accelerating the construction of a credit supervision system for buyers and sellers to protect information security and transaction security in sharing economy. Admittedly, imperfections in this book are all mine, and genuine comments and criticisms are cordially invited. Shanghai, China

Jiachen Li

General Preface for the series Public Economy and Urban Governance in China

After more than 40 years of rapid development, the economic society of China has demonstrated some new characteristics in recent years, which is mainly reflected in changes in the ways the Chinese economy is developing at the current stage. These changes often occur when economic development reaches a certain stage, partly like what happened in the history of developed countries, but with unique Chinese characteristics. In economic growth and structural adjustment, a remarkable feature is the continuously increasing contribution made by the public goods sector to national economic growth. To counter the economic recession and maintain a fast economic growth and social stability, the Chinese government has continuously invested heavily in public infrastructure construction, particularly after the global financial crisis in 2008. At the same time, in the context of urbanization and population system reform, and the mounting needs of people’s social welfare to be met, the government has increased its investment in public services, such as education, health, safety, and social security, which makes the supply of economic and social public goods an important part of the total social supply. Even in some years, investment and supply of public goods have become decisive factors for economic growth. In terms of social development and structural changes, although the overall social form and power structure has changed little, social forces, like the new emigrant class, middle income class, and private capital class that came into being, as a result of modern social activities continues to grow, exerting an increasing influence on economic and social development. These emerging social forces are imperceptibly changing China’s social structure and having a profound impact on the pattern of social interests. At the same time, with people’s production and lifestyles becoming increasingly market-oriented and socialized, the ideas, social needs, and demands of ordinary people have also undergone great changes, which adds to the difficulties in accurately grasping people’s needs, preferences, and behavioral changes in social governance, and poses challenges to the effective implementation of public services. In addition, with the change of production mode and the expansion of economic activity space, people’s social mobility has been increasing, far exceeding the scope of administrative areas and posing a huge challenge to the traditional administrative vii

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management system and the top-down governance mechanism of the government. All these have put forward new requirements on how to reconstruct the structure and mechanism of social governance in the modern political and economic constructions. Seen from the economic development trend of various countries, the role and status of the public goods sector in the economic and social development are gradually improving, and its asset scale and proportion in the total social supply are constantly increasing, with the economic development and the improvement of residents’ income level. This reflects the state and trend of the continuous development of social economy. With a reference to the law of the development of the public goods sector in other countries, the rapid development of the public goods sector in China after the reform and opening up also reflects a regular trend of economic and social changes. However, it should be clearly realized that in the rapidly changing social and economic development environment, the growth of the private product sector will be affected by technological, market, and institutional changes, and the development of the public product sector will also face many new challenges. This is manifested mainly in the following aspects: First, how to allocate social and economic resources reasonably and effectively in the private and public product sectors. This requires a comprehensive grasp of the objective needs of the economy and society, and an effective mechanism for resource allocation to achieve a balance between the supply of the two sectors and the needs of individuals and society, and a balance between moderate economic growth and the improvement of social welfare, so as to basically achieve the two goals of economic efficiency and social equity in development. Second, how to effectively supply public goods, especially according to China’s national conditions, to solve the problems that truly show people’s needs and preferences in theory and practice, adopt appropriate public choice methods, and let the public participate in the selection and decision-making system of public product projects. This problem involves a country’s public goods supply system and mechanism, and political, technological, market, social, and cultural factors, but the core problem lies in the arrangement and mechanism design of political and economic systems. The old stereotype of an “all-in-one government” should be abandoned, the needs of the people be truly put squarely in the center, and the government does what it should and refrain from what it should not, delegating power to the grassroots and freeing up space for the development of social organizations and their performance of social governance functions. At the same time, the government should also reform the existing government-led public goods supply mechanism through institutional arrangements and political procedures and explore a public goods supply mechanism featuring multi-subject cooperation, which is suitable for China’s national conditions. Third, how to build a social governance pattern featuring joint contribution, cogovernance, and shared benefits, establish a social governance community in which “everyone is responsible, lives up to their responsibility, and shares in the benefits”, how to establish a social governance system integrating the government, social organizations, and the public under the leadership of the Communist Party of China, and

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how to stimulate the enthusiasm of the public to participate in community governance, and improve the ability and level of community workers and community affairs participants. Fourth, how to innovate grassroots governance methods, which involves making social governance the cornerstone and focus of national governance and the basic link in the modernization of the national governance system and management ability. At the same time, the government must eliminate any “idle” phenomena through institutional arrangements and rule of law and establish the governance methods that adapt to multiple governance subjects to resolve administrative dilemmas of community institutions, explore de-administrative reform paths for community grassroots organizations, and build systems for resource mobilization, public service provision, and public affairs decision-making. Fifth, how to innovate the production and supply methods of public products based on new technologies like the Internet, big data, and Al to improve public service efficiency and enhance community grassroots governance performance. This requires continuous improvement of laws and regulations, to enable public service departments to legally use IT to understand the real needs of society members for public products and services. It also provides sufficient information for public decisionmaking and technical means for the supervision and performance evaluation of public services, aiming to achieve effective resource allocation and supply. Based on the above thinking and understanding of China’s long-term social and economic development and structural changes, the Institute of Advanced Studies in Social Sciences at East China University of Science and Technology has formed a research team to study public economics and social governance issues in China’s socio-economic development. They aim to analyze China’s socio-economic development from a grassroots and microeconomic perspective in the context of the sea changes in China’s society and economy. The team, composed of young teachers specializing in public economics, sociology, and public management, has undertaken quite a number of international cooperative projects and State Fund projects, focusing on three main research themes: 1. Studying the basic theory of public goods sector development and China’s practice, exploring the structural relationship and internal mechanism of public economics and social governance in social development. 2. Investigating new methods and forms of public economics and social governance in the context of new technologies like the Internet, big data, and Al. 3. Conducting social surveys, field experiments, and empirical analysis in public infrastructure, public services, and community grassroots governance, aiming to find beneficial practical experiences with Chinese characteristics, review and revise classic theoretical views, and expand theoretical research scope. This series is a preliminary summary of their previous research work, with each volume reflecting these research themes. The content of this series mainly covers the areas of public economy, social governance, and social policy. Regardless of the discipline, most of the research is based on the theory of public economics and public management and discusses scientific issues in public economy and social governance in an interdisciplinary way. We also study policy issues from the perspectives of different disciplines.

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Since the publication of the Chinese version, this series has received extensive attention from the academic community and society. In particular, studies on how to establish a diversified public goods supply mechanism for social organizations and public participation, and how to establish an effective grassroots social governance mechanism have generated strong interest and triggered off more in-depth discussions. Now that the series is available in English, more readers can understand the great changes in the public economic sector and social governance in China since the reform and opening up, and understand the thoughts of Chinese scholars on the practical issues of public economy and social governance. At the same time, it is hoped that scholars from all over the world will pay more attention to the reform process of China’s public sector, thus promoting international academic exchanges in this field. The publication of this series in the original has been sponsored by the National Publishing Fund and the “Publishing Project of Universities Serving the National Major Strategies”. Without the support of the East China University of Science and Technology Press and the hard work of its editors, the acquisition of the fund and high-quality publication would not have been possible. The English version would never have been imagined without the constructive cooperation with Springer Nature. To these quarters, we owe our heart-felt gratitude. Shanghai, China

Baijun Wu

Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Research Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Research Purpose and Significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Technology Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 4 5

2 Related Theory and Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Definitions of Related Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.1 Connotation of Sharing Economy . . . . . . . . . . . . . . . . . . . . . . 2.1.2 Characteristics of Bilateral Platforms of Sharing Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.3 Governance, Supervision and Control Differentiated . . . . . . 2.2 The Development of Sharing Platforms and Urban Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1 Development Model of Typical Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 The Effect of Sharing Platform Development on Urban Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Self-governance of Sharing Economy Platforms . . . . . . . . . . . . . . . . 2.3.1 The Evolution of Self-governance Theory . . . . . . . . . . . . . . . 2.3.2 Logical Relationship Between Sharing Economy and the CPRs Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Government Governance of Sharing Economy Platforms . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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3 An Overview of the Development of Sharing Platforms and Urban Construction in China and Other Countries . . . . . . . . . . . . 3.1 Status Quo of Sharing Economy Platforms . . . . . . . . . . . . . . . . . . . . . 3.1.1 An Overview of General Development . . . . . . . . . . . . . . . . . . 3.1.2 Development Status of Urban Ride-Sharing Platform Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.3 Development Status of Urban Sharing Accommodation Platform Enterprises . . . . . . . . . . . . . . . . . . .

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3.1.4 Development Status of Urban Office Sharing Platform Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 The Impact of the Development of Sharing Platforms on Urban Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 Short-Term Impact of Sharing Platform on Urban Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.2 Long-Term Impact of Sharing Platforms on Urban Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.3 Mechanism Function of Sharing Platforms on the Construction of Some Tourist Cities . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Governance Experience of Urban Sharing Economy Platforms in China and Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Common Problems in the Governance of Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 The Governance Experience of Sharing Economy Platforms in Some American Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.1 Restrictions on Airbnb Access in New York State . . . . . . . . . 4.2.2 Tax Controls of Airbnb in Los Angeles . . . . . . . . . . . . . . . . . . 4.2.3 Restrictions on Uber Access at Airports in Other Cities . . . . 4.2.4 The General Attitude to Governance of the US Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 The Governance Experience of Some European Cities . . . . . . . . . . . 4.3.1 Introduction of EU Sharing Economy Guidelines . . . . . . . . . 4.3.2 Incentives for House and Car Sharing in London, UK . . . . . 4.3.3 Incentives and Restrictions for Car Sharing in Paris, France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.4 The Ban on Uber Access in Rome, Italy . . . . . . . . . . . . . . . . . 4.3.5 Restrictions on Airbnb Access in Berlin, Germany . . . . . . . . 4.4 The Governance Experience of Some Asian Cities . . . . . . . . . . . . . . 4.4.1 Deregulation of Sharing Platforms in Seoul, South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.2 Standardized Governance of House Sharing in Tokyo, Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.3 Experience of Governing Airbnb Platform in Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A Study of Self-governance of Urban Sharing Platforms Based on the CPRs Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Principles of Self-governance of Urban Sharing Platforms . . . . . . . . 5.1.1 Nested Boundaries of Urban Sharing Platforms . . . . . . . . . . . 5.1.2 Sharing Platforms to Rely on Local Resource Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.3 Sharing Platforms as the Wisdom of Collective Choice . . . .

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Contents

5.1.4 Effective Self-supervision of Sharing Platforms . . . . . . . . . . 5.1.5 Internal and External Sanctions of Sharing Platforms . . . . . . 5.1.6 Sharing Platforms Required to Avoid Internal and External Conflicts in the Industry . . . . . . . . . . . . . . . . . . . 5.1.7 The Relatively Independent Organization Rights of Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.8 Decentralization of Sharing Platforms . . . . . . . . . . . . . . . . . . . 5.2 Scope of the Self-governance of Urban Sharing Platforms . . . . . . . . 5.2.1 Internal Selection Variables Affecting Participants of Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Advantages of Institutional Supply . . . . . . . . . . . . . . . . . . . . . 5.2.3 Credible Commitment and Mutual Supervision . . . . . . . . . . . 5.3 Effects of Self-governance of Urban Sharing Platforms . . . . . . . . . . 5.3.1 Overcapacity: Aggravation or Mitigation . . . . . . . . . . . . . . . . 5.3.2 Negative Externality: Increase or Decrease . . . . . . . . . . . . . . . 5.4 Coordination Between Self-governance and Government Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.1 Multi-center Governance of Urban Sharing Platforms . . . . . 5.4.2 Prior Access Based on Equity and Security . . . . . . . . . . . . . . 5.4.3 Post-regulation Based on Normative Self-governance . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Multi-dimensional Collaborative Governance of Urban House Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Self-governance of Urban Accommodation Sharing Platforms . . . . 6.1.1 Contents of the Self-governance of Accommodation Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1.2 Coordination and Conflict Between Shared Accommodation and Urban Public Resources . . . . . . . . . . . . 6.1.3 Defects of Self-governance of Accommodation Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Coordination Between Self-governance and Government Governance of Accommodation Sharing Platforms . . . . . . . . . . . . . . 6.2.1 Collaborative Governance Between the Government and Accommodation Sharing Platform Enterprises . . . . . . . . 6.2.2 Collaborative Co-governance of Accommodation Sharing by the Government, Platforms and Society . . . . . . . 6.3 Self-governance of Urban Office Sharing Platforms . . . . . . . . . . . . . 6.3.1 Self-governance Content of the Office Sharing Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.2 Coordination and Conflict Between Shared Office and Urban Public Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.3 Defects of Self-governance of the Office Sharing Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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88 89 90 91 91 92 92 97 99 100 100 102 103 103 104 105 107 109 110 110 119 121 121 121 123 124 125 131 132

xiv

Contents

6.4 Collaboration Between Self-governance of Office Sharing Platforms and Government Governance . . . . . . . . . . . . . . . . . . . . . . . . 6.4.1 Collaborative Governance Between the Government and Office Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.2 Collaborative Governance of Co-working by the Government, Platforms and Society . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Multi-dimensional Collaborative Governance of Urban Ride-Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Self-governance of Urban Car-Sharing Platforms . . . . . . . . . . . . . . . . 7.1.1 Contents of Self-governance of Urban Car-Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.2 Coordination and Conflict Between Car-Sharing and Urban Public Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.3 Defects of Self-governance of the Car-Sharing Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.4 Car Seat Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Collaboration Between Self-governance of the Car-Sharing Platforms and Government Governance . . . . . . . . . . . . . . . . . . . . . . . . 7.2.1 Collaborative Governance Between the Government and Car-Sharing Platform Enterprises . . . . . . . . . . . . . . . . . . . 7.2.2 Collaborative Governance of Car Sharing by the Government, Platforms and Society . . . . . . . . . . . . . . . 7.3 Self-governance of Urban Bike-Sharing Platforms . . . . . . . . . . . . . . . 7.3.1 Contents of Self-governance of Urban Bike-Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.2 Coordination and Conflict Between Shared Bikes and Urban Public Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.3 Defects of Self-governance of Bike-Sharing Platforms . . . . . 7.4 Collaboration Between the Self-governance Bike-Sharing Platforms and Government Governance . . . . . . . . . . . . . . . . . . . . . . . . 7.4.1 Collaborative Governance Between the Government and Bike-Sharing Platform Enterprises . . . . . . . . . . . . . . . . . . 7.4.2 Collaborative Governance of Shared Bikes by the Government, Platforms, and Society . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 The Mechanism of Multi-dimensional Collaborative Governance of Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 The Premise of Multi-dimensional Collaborative Governance of Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.1 Universal Characteristics of Self-governance of Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.2 Common Defects of Self-governance of Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

132 132 133 134 135 135 136 144 146 147 148 148 150 151 152 158 159 160 160 161 162 163 164 164 164

Contents

8.2 Collaboration Between Self-governance of Urban Sharing Platforms and Government Governance . . . . . . . . . . . . . . . . . . . . . . . . 8.2.1 Building an Access Mechanism for the Sharing Economy Industry Based on Fair Competition and Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.2 Adjusting Taxes According to Local Conditions . . . . . . . . . . 8.2.3 Post-event Management: Punishment and Reward . . . . . . . . 8.3 Social Co-governance of Urban Sharing Platforms . . . . . . . . . . . . . . 8.3.1 Improvement and Communication of the Credit Investigation System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.2 Improvement of Sharing Supporting Facilities . . . . . . . . . . . . 8.3.3 Community Co-governance of Urban Sharing Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.4 Reconstruction of Urban Public Space . . . . . . . . . . . . . . . . . . 8.3.5 Establishment of Sharing Platforms of the Urban Agglomeration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xv

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168 170 171 172 172 173 174 175 176 177

9 Conclusion and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Postscript . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Chapter 1

Introduction

If the Internet has been the most rapidly developing industry in China in the past decades, sharing economy then is at the forefront of the Internet economy. Relying on highly developed Internet technology, it has become the hottest, the most controversial and influential industry. According to the projection of relevant institutions of the Global Sharing Economy Summit Forum in 2016, the output value of the global sharing economy will reach 230 billion pounds in 2025, making it a crucial propeller for future economic development and an important pillar industry for the realization of the concept of low-carbon environmental protection. The 2019 Report on the Work of the Government1 pledged to “continue accommodative and prudential regulation, support the growth of new forms and models of business, and stimulate the healthy development of the platform economy and sharing economy.” Xi Jinping, Secretary General of CPC Central Committee, stressed the new concept of innovating the social management system, calling for “systematic governance, ruling by law, source management and holistic policy implementation,” and more emphasis on democracy and rule by law, and scientific and technological innovation so as to make state governance more socialized, systematic, legalized, intelligent and professionalized.2 It can be seen that against the background of promoting the modernization of China’s state governance system and capacity for governance, open-minded thinking and innovation are needed more than ever in state governance; following the past methods of governance will not work. This is the starting point of this book.

1

Delivered by Li Keqiang, Premier of the State Council at the Second Session of the 13th National People’s Congress of the People’s Republic of China on March 2019. 2 From a speech made on October 9, 2021 at the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China (CPC). © East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_1

1

2

1 Introduction

1.1 Research Background It is less than five years since 2016, once called the first year of sharing economy, but the scale of the economy involved is extraordinary. Just take China as an example. On the demand side, more than 700 million Chinese participated in sharing economy activities in 2017, about 100 million more than in 2016. The market turnover was about 4,920.5 billion yuan, an increase of 47.2% over 2016, among which, that of the transportation sector was about 201 billion yuan, and the service sector, about 13,214 million yuan.3 On the supply side, about 70 million service providers participated in sharing economy activities in 2017, 10 million more than in 2016. The number of employees of enterprises operating on the platforms of sharing economy in China alone reached 7.16 million, an increase of 1.31 million over 2016, accounting for 9.7% of the new urban employment in that year. This means that about 10 out of every 100 new urban employees in 2017 were newly hired employees of sharing economy enterprises. Sharing economy sector has become an important area for promoting employment and ensure development. Seen from the development context of the global sharing economy, the housing sector and the travel sector are the most rapidly developing and relatively mature industries. AirBed and Breakfast (Airbnb), the pioneering sharing platform, promotes homestays, which offer visitors affordable short-term shared rentals with distinctive characteristics. In 2015, the ofo sharing bicycles (hereinafter referred to as ofo) established a sharing platform for about 2000 idle bicycles in Peking University, activating the idle bicycle resources on campus and proposed for the first time in China the plan of using shared bikes to realize green and low-carbon travel. Starting in 2016, Mobike launched dockless shared orange bikes into the market, leading the explosive growth of the bike-sharing industry. By the end of 2017, there had been more than 23 million shared bikes, with nearly 400 million registered users and more than 11.5 billion orders. Services had covered 304 cities in more than 20 countries around the world, drawing 74 enterprises to the bike-sharing industry, with the financing amount exceeding 20 billion yuan. Bike-sharing, represented by Mobike and ofo, has been listed among China’s “New Four Great Inventions”. On the one hand, it solves the problem of the last kilometer of travel in big cities; on the other hand, its green, cheap and efficient operation model is rapidly gaining popularity. From a theoretical point of view, the long-term development of industrialization has been achieved mainly through asset hoarding to complete wealth accumulation, resulting in the over-utilization of scarce resources and huge overcapacity. This has in turn led to a serious structural imbalance in the allocation of resources, and the contradiction between supply and demand is no longer manifested in oversupply or undersupply alone, but in obvious uneven distribution of supply and demand. Sharing economy emerged as a cooperative method to address the problem of imbalance in 3

Source: “An Interpretation of the Spirit of the Fourth Plenary Session of the 19th Central Committee of the CPC,” the People’s Daily (http://found.People.com.Cn/GB/40557/430704/index. The HTML).

1.1 Research Background

3

resource allocation. The transaction process of sharing economy reduces the requirement of clear ownership of property rights. Resource users do not need to completely take as their own resources, especially those easily obtained but not commonly used resources, which directly reduces the development and possession of new resources. Sharing economy can improve the utilization rate of existing idle resources at a low cost by maintaining the original property rights through “collaborative exchange”, maximize the value of resource utilization, and directly reduce the loss of resource utilization caused by the exclusive ownership of private property rights. However, due to its short history and subsequent lack of industrial mechanism design, sharing economy originally designed to solve the imbalance of resource allocation may not effectively alleviate the problem of resource shortage and environmental pollution. It also causes greater waste of resources and meets much resistance from traditional industries and governments. Consequently, this budding economic form has now hit the bottleneck of sustainable development. Driven by “Internet Plus” and smart phone mobile payment, both Mobike and ofo expanded rapidly under the banner of “sharing”. In 2017, a series of products such as shared umbrellas, shared power banks, shared campstools and shared parking space followed on their heels. However, numerous shared products and copycat investment have not brought about the sustained prosperity of sharing economy but a white-hot competition. In 2018, many sharing enterprises closed down due to capital chain problems, with the travel sector bearing the brunt. In November 2017, Bluegogo collapsed due to 2 billion yuan in arrears of deposit. Many bike-sharing companies, such as Dingding, Xiaoming and Kuqi, withdrew from the industry. In fact, real sharing economy operates on an asset-light model, and the capital chain of shared bikes was broken largely because many investors just jumped on the bandwagon of “sharing” but were not involved in real sharing economy. In addition, home-sharing companies such as Airbnb and Mayi were rejected by many high-end communities due to personnel safety and poor quality of tourists. Car-sharing services such as Didi Hitch and Dida Carpool were forced out of online business due to travel safety and resistance from traditional taxi companies. In the final analysis, the reason for these phenomena is that the new trading form of sharing economy is still unclear, and the development of trading itself is not mature enough, without the support of an established theoretical system. In the 2016 Report on the Work of the Government, Premier Li Keqiang put forward the need to “support the future development of sharing economy”, underscoring the important role of sharing economy in China’s supply-side reform. Innovation is a long-term national strategy, among which deregulation and release of market vitality are important factors for promoting innovation. In the face of sharing economy, a new type of economic business, the government needs to reposition its role, a key to the sustainable development of this industry. The traditional economic regulation of the threshold of entry, tax system and other mechanisms may not be applicable to the current collaborative consumption model of sharing economy.

4

1 Introduction

1.2 Research Purpose and Significance Sharing economy has helped establish a new mode of market transaction. From the perspective of effective resource allocation, the reuse of idle resources has effectively reduced the utility cost of resources and improved consumer surplus and creates new economic value. However, the economic principle and governance model behind sharing economy are not clear. Based upon this, this book intends to do the following: 1. Unraveling the connotation and essence of sharing economy The full utilization of idle resources is the starting point of sharing economy. To accurately understand sharing economy, it needs to be distinguished from the original second-hand economy and rental economy. The traditional way to deal with idle resources is through second-hand market transaction, but due to information asymmetry, many second-hand transactions have become a typical “lemons market”, forming a vicious circle of “bad money driving out good money”. Moreover, second-hand market transactions add to the depletion of resources, and each replacement brings new transaction costs. Sharing economy reduces the additional loss of resources in the process of resource ownership transaction through the cooperative consumption mode of exchanging only the right of use instead of ownership. It also reduces the risk caused by information asymmetry by relying on the powerful information technology platform of the Internet. There are three essential differences between the traditional rental market and the two-sided market of the sharing platform. First, the subjects are different. The rental market is still strictly composed of the supply side and the demand side, while everyone in sharing economy represents the supply side and the demand side at the same time. Second, the purposes are different. The traditional rental market is motivated by profit, while sharing economy seeks to share and save resources, and create new added value. Third, the ways of utilizing resources are different. The rental model consumes new resources, while sharing economy capitalizes on the idle inventory of existing resources. Of course, this is an idealized theoretical analysis; currently there is no obvious division between sharing economy and rental economy, and in many cases, sharing economy is even equated with rental economy. Therefore, the primary purpose of this book is to explore the essence of sharing economy from the multiple dimensions of micro theory, industrial application and real cases. 2. Studying the expansion and implementation of self-governance mechanism in the sharing platform Elinor Ostrom, a Nobel laureate in economics, argued that a mechanism of selfgovernance can be developed to solve the tragic problems in the Common Pool Resources (CPRs) system. Although the sharing platform cannot be fully mapped to Ostrom’s CRPs theory, it has many similar characteristics, including the use of cloud computing big data broadband network and intelligent terminals to expand the participation of suppliers, the use of credit rating and user feedback to achieve credit commitment, and mutual supervision among participants. This just satisfies

1.3 Technology Roadmap

5

the three necessary conditions of CPRs self-governance: new institutional supply, credit commitment and effective feedback. Previously adopted more in the study of natural resources, especially of common pool ones, the CPRs theory has limited applications in more generalized resource systems. This book applies the CPRS theory to a resource system built on the sharing platform, which is an extension of the application of the theory. 3. Realizing the self-governance of urban sharing platform and multi-dimensional collaborative governance of the government and society When the pace of innovation goes beyond the scope of government regulation, the original regulation will become oppressively outdated, becoming a hindrance to competition. As sharing economy continues to boost the structural adjustment of economic development, it is in line with the reform direction of “reducing excess inventory, deleveraging, lowering costs”. However, whether sustainable development can be achieved also brings new challenges to the role positioning of the government. At present, an effective government governance mechanism is lacking for the sharing platform, and a complete credit evaluation system of the macro environment has not yet been established. Many sharing industries have encountered problems that cannot be solved through self-governance. These problems arise largely the lack of government management and social governance, and there is no synergy between limited regulation and self-governance of the sharing industry. Therefore, this book intends to provide solutions to achieve diversified coordinated governance.

1.3 Technology Roadmap The research to be reported in this book proceeds from the easy to the difficult. First, some related conceptual categories will be differentiated, starting from the connotation of sharing economy. Secondly, through market research and enterprise interviews, the data of China’s sharing platform are obtained to find out the advantages and disadvantages of the current sharing platform, development motivation and influencing factors, as well as its influence and impact on the urban public resource system. Further, the industrial organization theory and government regulation theory will be employed to study the current problems in governance, governance experience obtained and existing problems of urban sharing platform. Starting from Chap. 6, under Ostrom’s CPRs self-governance framework, this book studies the principles and scope of governance to be met by self-governed sharing platform, and how to coordinate with the external resource system. Finally, through the study of the multi-dimensional collaborative governance of two typical industries of house sharing and travel sharing, the common characteristics and problems of

6

1 Introduction Concept definition

Sharing economy

Market research Enterprises’ visit

Collaborative consumption

Development status of urban sharing platforms and urban construction

Accommodation sharing

Ride sharing

Industrial organization theory Government regulation theory

Coordinated governance

Bilateral platforms

Motivations and factors Advantages and disadvantages Influence and effect

Office sharing

International experience˖Government status and dilemma of urban sharing

Tax evasion Excessive access Occupation of public spaces

CPRs theory Self-governance theory of urban sharing platforms

Principles of self-governance

Contents of self-governance

Effects of self governance

Collaboration with government

Collaboration with society

Industry application: Multi-dimensional collaborative governance of urban house sharing platforms and ride sharing platforms

Current policies

Government management

Co-governance of society

System design: Scheme of multi-dimensional collaborative governance of sharing platforms

Construction of credit Investigation system

Improvement of supporting facilities

Co-governance of community platforms

Re-construction of urban space

Urban agglomeration sharing

Fig. 1.1 Technical roadmap for the research

multi-dimensional collaborative governance are to be found. Accordingly, a diversified coordinated governance scheme will be designed, which includes access coordination, tax coordination, public resources coordination, community supporting coordination, etc.4 The specific technical path for the research is shown in Fig. 1.1.

4

Made at the opening meeting of the fourth plenary session of the 12th National People’s Congress, which opened at 9 a.m. on March 5, 2016.

Chapter 2

Related Theory and Literature Review

Sharing platform weakens the restriction of “property rights” through the transaction mode of collaborative consumption, resulting in extensive resource reorganization and aggregation (Jiang 2017). The redistribution of resources in sharing economy produces four replacements: ownership transaction by transaction of the right of use, exchange value by shared value, ownership of means of production by rental system of means of production, lump sum resource configuration by repetitive resource configuration. Aware of the short history of shared economy that has produced relatively fragmented literature and anything but established theoretical framework and system, the author of this book will classify and review the existing research results from the aspects of definition of related concepts to sharing economy, platform development and city construction, the self-governance of platform, and government management of platform.

2.1 Definitions of Related Concepts The academic research on sharing economy has emerged only in recent years, which is in essence a new way of resource allocation based on the original bilateral platform supported by Internet technology. Therefore, understanding the connotation of bilateral platform can help us better analyze the operation mode behind sharing economy. In addition, since the core concern of this book is the governance of this new transaction model, this section is devoted to differentiating and analyzing such concepts as sharing economy, two-sided market, bilateral platform, and government management.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_2

7

8

2 Related Theory and Literature Review

2.1.1 Connotation of Sharing Economy The early version of collaborative consumption (Felson and Spaeth 1978) described it as an economic model in which consumers connect with online and offline community (groups) and other tools to achieve cooperative or mutually beneficial consumption, including co-operation in owning, renting, using or exchanging goods. Due to technical limitations and other reasons, the benefits of such collaborative consumption did not receive wide public attention until the 1990s, which witnessed the start of rapid development of the Internet and the popularity of mobile terminals. Botsman and Rogers (2010) defined sharing economy as a resource recycling system that allows consumers to play a dual role as resource providers and acquisitors in transactions conducted directly on a point-to-point basis or indirectly through such intermediaries as shops, websites, and applications, affording benefits of ownership with low thresholds and costs, while minimizing their impact on environment. This definition covers all aspects of sharing economy. In essence, the difficulty in defining the connotation of sharing economy is that the rapid development of digital technology has made the original supply and demand model no longer applicable, and it is necessary to rebuild the collaborative consumption model for research (Sundararajan 2012). 1. Debate over the nature of “sharing” Unlike most of established traditional economic theories, the concept of sharing economy is relatively new and has inconsistent representations in domestic and foreign literature, ranging from 共享经济 or分享经济 (two Chinese translations of “sharing economy”), point-to-point economy, peer-to-peer economy, grid economy, gig economy, utility economy, on-demand economy, cooperative economy, equivalent, asset-light economy. Sharing economy is also directly termed 协同消费, 合 作消费 or 协作消费 (variant Chinese translations of “collaborative consumption”) according to consumption mode (Ni and Yu 2016). From the way sharing economy is normally defined, such designations as 共享经济, 分享经济, 协同消费 share the same connotation and are therefore interchangeable. This book will use the term 共 享经济 (“sharing economy”) throughout for two reasons. First, as the core feature of this type of transaction, users share products with the same property rights, rather than splitting them apart. Second, collaborative consumption is the transaction and consumption models of sharing economy. Such a term is a more direct description of this particular form of economy. Eckhardt and Bardhi (2015) argued that real sharing should be zero-profit. However, at present, both travel and housing sharing are charged, so it does not belong to pure sharing, but to limited sharing, or limited use for that matter. Sharing economy is defined by the Research Center for Sharing Economy of the State Information Center of China as “the sum of economic activities that integrate massive and decentralized resources to meet diversified needs by using modern information technology such as the Internet and with the main feature of sharing the right of use”. It can be seen that the connotation of sharing economy mainly revolves around two

2.1 Definitions of Related Concepts

9

points: the sharing of the right of use and the improvement of the utilization rate of resources. Therefore, this book summarizes sharing economy as a collaborative consumption model based on the Internet two-sided market, which separates the ownership right and the right of use of traded goods and maximizes the utility value of resources through the sharing of the right of use. 2. Micro theory of sharing economy From the perspective of the impact of sharing economy on social welfare, Narasimhan et al. (2018) analyzed the impact of sharing economy on social welfare. Compared with the peer-to-peer online retail transaction of durable goods and the traditional offline market transaction, peer-to-peer transaction is found to have reduced the price and added to the surplus of consumers, especially in the middle- and lower-class consumer groups. Benjaafar et al. (2019), with a newly-built peer-to-peer collaborative consumption model, analyzed the impact of such factors as rent, platform intermediary fee, owners’ depreciation cost, moral hazards on consumer surplus and social welfare. They found that rent is not the most important factor and owners’ depreciation cost has a crucial bearing on the consumption level. What’s more, no matter how much owners earn, the intermediary platform always has a profit to make. Wilhelms et al. (2017) believed that for the successful transaction in peer-to-peer sharing economy, two requirements should be met—the willingness of asset owners to lease idle resources and the willingness of the consumers to rent other people’s property rights. After researching the market, they found that the success of a sharing transaction requires express consent of sellers to provide product information. The more transparent the information, the more likely the transaction is to take place. 3. Industry application of sharing economy As a new economic model, sharing economy enables end-users to participate in market transactions again (Querbes 2018), thus changing the original market structure. Therefore, the research on sharing economy has been conducted focusing more on practical application than on theoretical exploration, covering a wide range of topics. Current studies conducted from the perspective of the impact on sharing economy on industry include whether sharing economy can reduce carbon emissions (Zhu et al. 2018), the disruption of online peer-to-peer diagnosis and treatment of and its impact on traditional medical methods (Miller et al. 2016), whether sharing cities can boost sustainable production and consumption (Cohen and Munoz 2016), and whether sharing systems generate more profits than single-user systems in the field of energy storage (Lombardi and Schwabe 2017), etc. Specific industry studies mainly focus on the business model, impact, nature and sustainability of such enterprises as tourism accommodation, transportation and sharing office (Cheng 2016). For example, Fang et al. (2016) found that sharing economy has advantages and disadvantages for the development of tourism industry, because sharing economy increases people’s mobility and challenges the traditional tourism industry. Wang and Nicolau (2017) studied with Airbnb as a case the price

10

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determinants of shared accommodation, including lessor, location, property rights, service, rent, online reviews. Gibbs et al. (2017) constructed the hedonic model of sharing economy and studied the pricing method of sharing economy by taking Airbnb as an example. Paulauskaite et al. (2017) found that sharing economy can help tourists get better experience, and the perception of unique accommodation atmosphere, interaction with host and local culture are very important to Airbnb customers.

2.1.2 Characteristics of Bilateral Platforms of Sharing Economy Bohm-Bawerk (1895), Gale and Shapley (1962) pointed out that sharing platform functions as a venue for buyers and sellers to conduct transactions, but the venue itself has no impact on the demands of buyers and the prices set by sellers. Because of the external nature of participants in cross-network, intermediary platforms play a role of connection and cohesion (Armstrong and Wright 2007). The success of sharing economy depends largely on Internet platform enterprises providing sharing services. For example, ofo, the forerunner of bike-sharing, did not own its own bikes when it was founded, but set up a sharing platform for the multiple use of idle bikes on campus. In terms of sharing economy, Internet technology has greatly reduced the cost of sharing, so the rapid development of sharing economy relying on the platform has changed the original mode of mass production and consumption. “Possession” is no longer the most important value index for people, its importance replaced by such happiness indexes as environmental quality and social relations (Guan 2013). Cai et al. (2017) pointed out that enterprise entrepreneurship related to sharing economy is different from traditional entrepreneurship, and a single efficiency mechanism can no longer explain the logic of strategic choice in this process. Instead, the perspective of legitimacy should be introduced and the two mechanisms of legitimacy and efficiency integrated for analysis. Zheng (2016), after comparing the traditional economic business model and the sharing economy business model, believed that the traditional economic business model has disadvantages in market power, internal industry chain cost transfer, and transaction cost accumulation. The business model of sharing economy has comparative advantages in allocation object, participation right and right of choice of the demand side, transaction cost and so on. In addition, some scholars studied the platform theory according to whether relevant platforms are monopolized or just a market structure with different degrees of competition. Research of this kind include, among others, the competition mechanism and development mode of different platforms in light of the contract theory and the transaction cost theory (Xu and Zhang 2006), the ability of the platform to set business model through information dissemination and technology communication (Luo and Li 2015), the balance between the potential market power of the platform

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and market efficiency; (Qu and Liu 2016) and the alternative complementary relationship between users on both sides of the platform (Lu and Zhang 2014). It is worth noticing that the platform demonstrates its external nature, which in turn affects the transaction costs of end-users (Evans 2003). As seen from the above, the theoretical research on such problems as the operating efficiency and revenue of the sharing platform itself is relatively inadequate.

2.1.3 Governance, Supervision and Control Differentiated The term 治理 (zhì lˇı, “governance”) originates from 君道 (j¯un dào, “On the Way of a Lord”) of Xunzi,1 an ancient Chinese philosophical classic. Since ancient times, governance has been an act of conquest and can be adjusted in certain ways. From the perspective of public economics, Rosenau (2001) was the first to propose governance as institutional arrangements existing in the gap between regulations. Perhaps more importantly, it includes principles, norms, rules and decision-making procedures that apply when mediation between competing interests is required or when two or more regulations overlap or conflict, Stoker (1999) pointed out that the essence of governance lies in the fact that the governing mechanism it emphasizes does not rely on the authority and sanctions of the government. The concept of governance is that the structure and order it seeks to create cannot be imposed from the outside; it works through the interaction of many actors who govern and influence each other. Unlike the definition of regulation, governance is the sum of the many ways in which individuals and institutions, public or private, manage the same affairs. It is the ongoing process by which conflicting or divergent interests are reconciled and act in unison. It includes formal institutions and regulations with the power to compel obedience, as well as various informal arrangements. The Commission on Global Governance summarizes four characteristics of governance: It is not a set of rules and regulations or an activity, but a process; Its establishment is not based on domination, but on reconciliation; It involves both public and private sectors; It does not mean a formal system, but does depend on continuous interaction (Yu 2000). In contrast to the definition of regulation, governance refers to activities supported by common goals, not necessarily by the government, or through the coercive power of the state. Governance administration and control administration are essentially different. On the one hand, the authority of control administration mainly comes from the government; although governance administration needs authority, this authority 明分职, 序事业, 材技官能, 莫不治理, 则公道达而私门塞矣, 公义明而私事息矣 (Only after this has been accomplished are the responsibilities attached to office clearly divided. Then undertakings and responsibilities are given their proper order of precedence. Then those who stand above the rest in talent are given office according to their abilities. If everything has been made well ordered and structured according to rational principles of order, then the way of public-spiritedness will prevail everywhere, and selfish private interests will be closed off. The public good will be made clear, and private affairs put to rest. Knoblock, J. transl. (1990). Xunzi: A Translation and Study of the Complete Works, Vol. II: 183. Stanford, CA: Stanford University Press).

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is not monopolized by the government. Governance administration is the cooperation between the political state and the civil society, the government and NGOs, public institutions and private institutions, and other compulsory and voluntary cooperation. On the other hand, the power of control administration issues from top to bottom. It uses the political authority of local governments to implement unidirectional management of public affairs by issuing orders, formulating and implementing policies. In contrast, governance administration is a process of up-down interaction. The government, non-governmental organizations and various private institutions deal with public affairs based on common goals mainly by means of cooperation, consultation, partnership, so the power is multi-dimensional, not purely top-down. The increasing role of social forces in governance can also exert influence on the government from bottom up through normal channels (Chen 2007). In summary, governance forms mainly include institutional supply, policy incentives, external constraints and many other aspects. Therefore, multi-dimensional collaborative governance of urban sharing platforms to be proposed in this book is feasible.

2.2 The Development of Sharing Platforms and Urban Construction The development of sharing economy is mainly dependent on two basic elements: the development of Internet and population density in cities. This section then mainly reviews relevant literature on the development of city-wide sharing platforms and their role in urban construction.

2.2.1 Development Model of Typical Urban Sharing Platforms Classified according to type of industry, urban sharing platform can be divided into information sharing platform, community service sharing platform, pipeline construction sharing platform, tourism industry sharing platform, transportation industry sharing platform, etc. What follows will be an elaboration of the tourism sharing platform and the transportation industry sharing platform, which have been more researched. 1. The development model of the tourism sharing platform According to China Housing Sharing Development Report 2017, revitalizing the stock of housing is one of the effects of housing sharing. Housing sharing platform can revitalize the idle housing resources owned by urban households, turn them

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into a “reservoir” that meets short-term housing needs through online operation. As an important tool for “destocking” in real estate market, it provides personalized accommodation services for consumers with different travel purposes. Sharing housing constitutes one major branch of sharing economy research. The research on sharing housing abroad preceded that in China. Fawcett et al. (2009) determined the optimal capacity of shared accommodation by establishing a simplified mathematical model. The exponential economic growth of accommodation platforms in sharing economy is ascribable to their wide price range, rich housing resources, and more diverse experiences than traditional hotel accommodation (Guttentag 2015; Wang et al. 2016). As seen from Chinese and English literature, research has been largely confined to the theories of housing sharing platforms and specific case studies, e.g. of Airbnb. Studies abroad include the business model and value of shared accommodation (Zach et al. 2020), its impact on traditional industries (Conley 2014; Zervas et al. 2017), its promotion of tourism industry (Tussyadiah and Pesonen 2016), its lack of trust (Tussyadiah 2015), user satisfaction (Ray 2016), the factors influencing pricing (Chica-Olmo et al. 2020), etc. Relevant studies in China include factors influencing pricing (Wu and Qiu 2019), accommodation experience (Shi and Han 2019), the value of business model (Wang et al. 2019; Jiang and Li 2016), the role of online reviews (Li et al. 2017), etc. 2. The development model of transportation sharing platforms Where the sharing platform in transportation industry is concerned, a major focus of China’s researchers has been on shared cars, with EVCARD as a case in point. Under the glamorous names of “sharing economy” and “new energy vehicles”, this time-sharing electronic vehicle rental company based in a Shanghai has attracted great attention in the market with mixed response of praise and doubt. With domestic urban traffic overload problem becoming more and more acute and environmental pollution increasingly serious, the State Council, the National Development and Reform Commission (NDRC), the Ministry of Finance, the Ministry of Science and Technology have unveiled a number of policies supporting the development of new energy vehicle industry. Accordingly, local governments provide financial subsidies and issue license plate numbers as a support of the car rental industry and new energy vehicles. If the new energy electric vehicle becomes the mainstream model of car-sharing in most cities, it can effectively reduce the number of vehicles and alleviate air pollution, thus playing a positive role in energy conservation and environmental protection. It will also be a supplementary to traditional means of transportation and a solution to traffic congestion in cities. In this regard, Liu (2017) constructed an evolutionary game model with travelers and government as game objects. The researcher used an algorithm to analyze how some parameters affect the ultimate result of the evolution, including government subsidies for car-sharing travelers, time loss for travelers due to lack of preferential policy, policy benefits obtained by the government and the cost of policy making. It was found that car sharing as a new travel mode is conducive to easing the contradiction between travel supply and demand, reducing the number of private cars,

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improving the efficiency of vehicle use and reducing the travel cost of travelers. Through a factor analysis of car sharing in second-tier cities in China, Sun and Wang (2017) found that its environmental level varies from city to city, showing a general trend of a strong spatial distribution in the eastern region and a weak one in the midwestern and northeastern regions. Policy-wise, on June 1, 2017, the Ministry of Transport issued the Guidance for Promoting the Healthy Development of the Car Rental Industry (Draft for Comments), with three objectives: first, to provide preemptive regulatory guidance for coping with the possible aggravated pressure of urban traffic congestion and the greater trouble and cost to the management of urban ills as a result of laissez faire being adopted when there is a general shortage of traffic resources in large and medium-sized cities; second, to control and prevent in a timely manner possible risks in the future development of car rental industry; third, to encourage the rational use of car time-sharing rental, which is conducive to dampening the desire to buy private cars and curbing the rapid growth of urban private car ownership and the occupation of road and parking resources to a certain extent (Zhang 2017). The supporting platforms for car sharing also include the sharing of parking facilities. Meng (2017) believed that insufficient supply and low utilization efficiency of parking facilities are prevalent in Chinese cities. The continuous increase in the number of motor vehicles has created too fast a demand for more parking facilities in cities. But there is always a limit to the expansion of parking facilities, which alone cannot meet the demand for parking facilities in cities. At present, the development of urbanized areas is shifting from scale expansion to continuous comprehensive agglomeration and entering a transformation stage where many blocks will develop into comprehensive ones with mixed functions. Therefore, how to revitalize the limited resources of parking facilities in cities and improve their utility efficiency have become a problem to be solved urgently, to which the sharing of parking facilities is one solution. From the perspective of car-sharing model and path design, Jiang (2017) studied car-sharing rental models and proposed an optimal plan for the choice of network layout of car sharing rental based on an appraisal of alternative rental points under the same index system. The plan was worked out through the selection of the decisionmaking evaluation index to construct the index system of site selection layout, and the calibration of analytic hierarchy process to generate the judgment matrix and weight of each index layer. Then a scheduling optimization model was constructed to propose the solution of a comprehensive optimization algorithm based on double ranking to achieve the ultimate goal of maximizing transportation revenue and optimizing transportation process. Chen (2016) proposed three private car sharing models, namely social network platform, third-party commercial platform and government non-profit platform, according to the different communication channels of sharing models. In the private car sharing model of the government non-profit platform, private cars with the same travel routes can be shared to lower idling rate and greatly reduce the number of private cars on the road, which can alleviate urban traffic congestion in principle.

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As can be seen from the literature reviewed above, the development of urban travel-sharing platforms is mainly concentrated in the field of car-sharing, but such supporting facilities as charging piles and parking spaces are still imperfect, which restricts the development of car-sharing. From the perspective of government policy, the corresponding laws and regulations are not perfect, and the relevant regulations issued by various regions are not yet unified. What role they play in the development of online car hailing service is not clear, and their impact on the development of cities of various sizes and the construction of smart cities needs to be further discussed. 3. Sharing platform development model of other industries From the perspective of information sharing platform, Guo et al. (2017), after a study of the demand for information sharing service in smart cities and an analysis of the challenges faced by traditional models and the information sharing service model of multi-agent platform coordination in smart cities constructed, observed that smart cities should develop the information sharing service model of multi-agent platform from the top-level perspective, so that the smart city information resources can be efficiently utilized, and each component of the system of smart cities can cooperate with each other to adapt to the rapidly changing urban environment, and generate and accumulate more smart businesses. Based on the current situation of Guangzhou and Foshan, Wu and Meng (2012) with a study and discussion of the related issues involved in the construction of inter-regional urban integration document information resource sharing model from the perspectives of construction conditions and methods, security system, management system and operation mechanism, suggested that a standardized and normalized resource sharing platform should be established with government as the main body for the scientific management and normal operation of sharing model. Geng (2017) discussed the significance and positioning of libraries jointly built by universities and cities, as well as the characteristics and guarantee mechanism of such sharing model. The research found that libraries jointly built by universities and cities, as a new operation model, can effectively save funds and realize the sharing of premises and collections, improve the library function, alleviate the shrinkage of function of public libraries, and make up for the lack of social service function of university libraries. From the perspective of community sharing, Jian et al. (2011) introduced the concept of outdoor shared space and proposed seven types of resident communication models in shared space and the structural layout of shared space dominated by different functions by breaking down the components of shared space, and analyzing the functions of shared space and the important role of shared space in promoting residents’ social communication. It was found that the rational use of shared space is the embodiment of the structure and function of urban ecological community in humanistic care, and a good shared space design plays an important role in creating an active and harmonious urban living atmosphere and promoting the ecological and sustainable development of urban community. From the perspective of urban pipeline sharing, Meng and Wang (2013), Bian et al. (2014), Wu et al. (2015) put forward a design model for the underground pipeline information sharing construction at provincial, municipal and county levels, based

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on the status of isolated construction and decentralized management. By analyzing the requirements of different levels of underground pipeline information management and application, they went on to design a framework for the construction of underground pipeline sharing platform at provincial, municipal and county levels. Their research has certain guiding significance for the integrated management and the application of urban underground pipeline information sharing.

2.2.2 The Effect of Sharing Platform Development on Urban Construction Katzev (2003) was among the first who studied car sharing in American metropolitan areas and found that the motivation for individuals to join the platform of Car Sharing Portland was to save the cost of car use. 26% of the members sold their private vehicles after joining the sharing platform and 53% of potential car buyers gave up their plan, but the mileage of car use had not decreased. Heinrichs (2013) found that urban sharing economy could potentially boost sustainable development. From the perspective of urban construction, the economic form of sharing economy is adaptable to the situation of energy crisis and the evolving consumption concept. Its development and expansion will surely bring historic changes to the current production system, consumption system, employment mode and even social relations. The construction of future urban communities and industrial parks, in particular, should reflect this design concept (Liu and Xing 2013). The representative case study is that of Guo (2018), who, with Ningbo City of Zhejiang Province as an example, analyzed the Ningbo model of the industrialized development of sharing economy, and took the first sharing economy town in China as the research object. Through the research on China’s first town featuring sharing economy in Ningbo, he found that the industrialized development of sharing economy had brought significant opportunities to Ningbo, while posing new challenges to the existing method of government supervision, marked by different modes of thought and lack of system design. From the perspective of city scale, Cheng (2018) took third-tier cities as an example to investigate the development status of bike-sharing, and found that compared with the relatively saturated state of bike-sharing in big cities, small and medium-sized cities still have a large development space, and the area of small and medium-sized cities is smaller, and the development of public transport is not perfect. Shared bikes can not only solve the problem of “last kilometer”, but also be used as a daily means of transportation for citizens. From the perspective of urban governance, Tang (2018) believes that bike-sharing brings many new challenges to urban governance, such as market failure, moral

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hazard, government failure, etc. Therefore, it is necessary to establish a marketoriented urban governance model, improve the institutional design of urban governance, and strengthen collaborative supervision to ensure the healthy development of bike-sharing.

2.3 Self-governance of Sharing Economy Platforms The proposal of “self-governance” originates from the public pond resource theory made by Ostrom (1990, 2008), designed to solve the problem of the tragedy of the commons of public goods. Though sharing economy platforms do not fully mirror Ostrom’s public pond theory, they demonstrate many similar features, including the use of cloud computing, big data, broadband networks and smart terminals which expands the participation of suppliers, and the use of credit ratings and user feedback which realizes credit commitment and mutual monitoring among participants. Therefore, from the perspective of resource redistribution, sharing economy can solve many negative externalities caused by the imbalance of resource allocation, including resource waste, resource depletion, resource idleness and environmental pollution. As an important theory for the solution of the imbalance of resource allocation, self-governance theory has great enlightening significance for the governance research of shared platforms. The following is an overview of the evolution of self-governance theory and the logical relationship between sharing economy and the CPRs theory.

2.3.1 The Evolution of Self-governance Theory The self-governance of public pond resources was put forward on the basis of three classical theories on the dilemma of public pond resources (Luo 2012). One is the tragedy of the commons. This term was first proposed by Hardin (1968), who argued that each herder receives direct benefits from his livestock, but when he or others overgraze their livestock on the pasture, each herder suffers deferral costs from degradation of the common pasture. So, each herder has an incentive to add more and more animals, because he receives direct benefits from his animals and bears only a portion of the losses caused by overgrazing. The second is the prisoner’s dilemma. This game model showcases a scenario in the consumption of public pool resources in which consumers unable to determine the selection results of others can only resort to the selection results which maximize their own interests, viz. the paradox that the strategy of individual rationality will lead to collective irrationality. The third is the logic of collective action. Mancur Olson in his book the Logic of Collective Action (1965), suggested that in public resources consumption that is free of institutional constraints and rules, individuals as rational beings naturally opt to be “free riders”

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to benefit effortlessly, rather than act of their own accord to promote the collective public interest or for the sustainable existence of public resources. 1. Early approaches to the management of public pond resources First, bureaucratic governance. Scholars, like Phuls (1973) and Heilbroner (1974), believed that if economic efficiency comes from the development of public property resources, then public control is required over public property resources. However, the equilibrium achieved by following the recommendation of centralized control is based on the assumptions of accurate information, strong monitoring capacity, reliable and effective sanctions and zero administrative costs. In real life, such hypothetical situations almost never exist. Second, market-oriented governance. In the 1980s, Bill Smith, Jack Welch and other scholars began to explore the approaches to market-oriented governance and argued that the market-oriented governance is more efficient and flexible; free property system should be established to replace public property system in dealing with the issues of natural resources and wildlife resources to avoid low efficiency caused by overgrazing. Complete privatization is the best solution (Li and Zhang 2010). Third, self-governance. Different from previous views on the tragedy of the commons, Ostrom believed that to solve the tragedy of the commons of public pond resources, a set of self-governance schemes should be established, which contain three elements: a new supply system, credit commitment and mutual supervision. His view derived from the susceptibility of the government’s access control to such problems as information asymmetry, adverse selection, excessive intervention and efficiency loss (Huang and Zhang 2018; Li and Wang 2016). 2. Ostrom’s classical self-governance theory Ostrom believed that neither public property rights nor privatization can effectively solve the governance problem of public pond resources. In addition, most systems have two arrangements around the market and the state, so they have not been successful in the natural resource system for a long time. However, people in many communities can successfully exercise moderate governance over some resource systems over a longer period of time through institutional arrangements that are different from either the state or the market. Ostrom proposed seven design principles for a long-term self-governing public pond system. (1) Clearly defined boundaries. The boundaries of the public pond resources themselves must be clearly defined, as must the individuals or families be entitled to draw a given unit of resources from the public pond resources. (2) The alignment of occupancy and supply rules with local conditions. The rules governing the time, location, technology and number of resource units to be occupied should be consistent with the local conditions and the rules governing the provision of labor, materials and capital required. (3) Collective choice arrangement. Most individuals affected by the operating rules should be able to participate in making changes to the operating rules. (4) Supervision. This includes the supervisor who actively examines the condition of the public pond sources and the behavior of the occupier, or the person responsible for the occupier, or the occupier themselves. (5) Graded sanctions.

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The occupier who violates operational regulations is likely to be subject to graded sanctions (depending on the content and severity of the violation) by other occupiers, the officials concerned, or both. (6) Conflict resolution mechanism. Occupiers and their officials can quickly resolve conflicts between occupiers or between occupiers and officials through inexpensive local public forums. (7) Minimum recognition of the right to organize. The power of occupiers to design their own institutions is not challenged by the authoritarian power of external governments. In her early practice, Ostrom investigated the origin and operation of a series of groundwater basin management systems in the southern part of the Greater Los Angeles area. By examining the game of litigation over the degradation of water resources in the region caused by pumping competition and entrepreneurs’ efforts, Ostrom noticed that water producers had finally set up public enterprises for appropriate management of groundwater resources to get rid of a bad pumping race when numerous lawsuits failed to do so. The California Water Department, the city of Los Angeles, private companies, water associations, and other interested parties all played different roles in the provision of water, and none of them was “monocentric.” In this way, a pattern of “multi-center public enterprises game” had taken form in groundwater resource management on the basis of many public enterprises. After the 1990s, Ostrom tested, compared and improved the theoretical hypothesis by controlling the experimental conditions, observing the behavior of experimenters and analyzing the experimental results. A series of studies were carried out on behaviors in social dilemmas with the finding that the effect of punishment was more significant among subjects who could communicate than among those who could not. This suggests that people can establish effective punishment mechanisms to regulate default behaviors through cooperation and communication. As can be seen from the previous research, although Ostrom’s self-governance theory has been widely confirmed by the academic circles, there is still some room for improvement. First, the theory is not very applicable. Based on strict assumptions, this theory can be successfully applied in the self-governance of public pond resources in objects, natural and social environment and political system only after certain specific criteria are met. These specific conditions seriously narrow the scope of application of self-governance theory, but also weaken its significance to some extent. Second, the theory is difficult to quantify. In the implementation of self-governance, individual subjective factors occupy a very important part, but are relatively perceptual, difficult to be summed up and calculated for further quantification. In addition, many results of the previous research were based on case studies and small samples, to be supported by more data (Gao and Shen 2009; Zhang 2008). With Ostrom winning the Nobel Prize in Economics, the theory of public pond resources began to gain wider attention. Wilson and Eckel (2013), comparing Eleanor Ostrom to an incomparable asset, focused on the trajectory of Ostrom’s research and the evolution of her self-governance theory. Tollison (2010) even made a vivid evaluation of this theory, believing that Eleanor Ostrom’s research on self-governance of public pond resources has opened the Pandora’s box of theoretical and empirical research. Aldrich (2010) observed that this self-governance theory is a proper solution, which achieves as much balance as possible between cost reduction and

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incentive improvement, but he preferred to regard self-governance as a government solution based on a balance of various objectives. According to Frey (2010), Eleanor Ostrom’s self-governance theory has promoted the progress of social governance, and demonstrated that members of collective problems can rely on their own interests and motivation to establish a certain coordinated solution organization, instead of just resorting to external government for solution. What concerned Eleanor Ostrom was the institutional rules that affect individual behavior, rather than the outward manifestations of a particular kind of object. In general, the evaluation of these scholars on the theory of self-governance of public pond resources is consistent with the reason that Eleanor Ostrom won the Nobel Prize in Economics; it promoted the development of economic governance ideas (Bao and Zhang 2016; Wang and Li 2018). 3. Recent expansion of self-governance theory The theory is to be analyzed below mainly from three aspects: theoretical expansion, the expansion of government governance, and industrial application. From the aspect of theoretical expansion, the CPRs self-governance includes four sets of variables: (1) the characteristics of resources; (2) the characteristics of the resource-dependent groups; (3) the details of the system for managing resources; (4) the nature of the relationship between groups, external forces, and authorities such as markets, governments, and technology. Currarini et al. (2016) outlined the effect of relationship network and social network on public pond resources. Benchekroun and Long (2016) found that both mining quantity and profit level would affect the utility of participants’ using public pond resources: mining quantity orientation would aggravate the tragedy of the commons, while profit orientation would appropriately reduce the tragedy of the commons. By using cooperative game model, Lee et al. (2017) found that the stronger the self-healing ability of public pond resources, the more likely overexploitation inhibits the cooperation among resource users. From the aspect of the expansion of government governance, Ricks (2016), Freeman and Anderson (2017) believed that the government’s governance of public ponds is very important, and administrators need to interact with participants frequently to ensure the effectiveness of governance. The key to managing the tragedy of the commons is for all stakeholders to achieve effective dialogue and communication (Adams 2003). Harju et al. (2017) found that the government plays an important role in wildlife diversity protection, and the concept, ability, policy formulation and implementation will affect the management effect of public pond resources. Hoffmann and Quaas (2016) found that the reason for the failure of fishery management was closely related to the high allowable catch volume. By constructing a discrete dynamic game model, they found that the reason for setting high catch volume was the lack of patience of the quota setters. Solutions to the tragedy of the commons suggested in the literature mostly rely on government management, which is necessary especially in areas with relatively scarce resources (Schnegg et al. 2016). However, government management may also lead to tragedies, mostly because of the impact of technology (Farrer et al. 2017). For example, sand mining is a classic case of the tragedy of the commons, with the government’s improper governance under demand orientation encouraging illegal mining and smuggling (Torres et al.

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2017). After studying how the government can reduce the risks and changes faced by public pond resources Tilman et al. (2018) found that the revenue sharing mechanism involving resource managers and users can be realized through price premium. Compared with top-down management, this bottom-up incentive contributes to the sustainable development of resources. The industry where the CPRs theory is applied most is fishery and water resources management. Lozano and Heinen (2015) found that in marine fishery management, the factors promoting collective action include the coordination of small-scale fishermen, non-governmental organizations and government agencies. It was also found that the factors for fishery degradation are related to changes in fishing gear and fishing sites, the number of fishermen and the diversification of fishermen’s lives. Barnes et al. (2017) found that the use of local networks for information exchange helps to improve the productivity of public pond fishing, but the cost of strategic information exchange is high. Calvomendieta et al. (2017) analyzed the differences between public heritage and public pond resources with the water resources management in France as an example. Sun et al. (2016) studied the irrigation of groundwater resources in Mexico and found that individual pumpers had limited impact on water levels due to inelasticity, so a policy that eliminated cost-sharing mechanisms would be significantly more effective in reducing irrigation applications than a policy based on electricity price. It can be found that most of the studies on CPRs still focus on the interpretation of such typical resource problems as fishponds proposed by Ostrom, and there are few applications in other related fields. At present, the theoretical and empirical studies are only limited to the use of methods like dynamic game and cooperative game.

2.3.2 Logical Relationship Between Sharing Economy and the CPRs Theory The new supply system of sharing economy shows characteristics that are in line with the CPRs theory, and the collaborative consumption model has expanded the original narrow sense of “pond” into a “sharing platform” that integrates resources. This section applies the self-governance theory of CPRs in the analysis framework of sharing economy platform. On the one hand, it is of great significance to the development of the CPRs theory itself; on the other hand, it provides a new theoretical perspective and a new research paradigm for the research of the sharing economy platform.

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The following is an in-depth analysis of the logical relationship between sharing economy and the CPRs theory. 1. Sharing economy conforms to the research scope of CPRs According to Ostrom et al. (2008), public pond resources are public resources whose resource system is shared but whose resource units are used separately. In such resource environment, rational individuals may cause the problem of resource crowding or degradation. The sharing economy platform is a complete set of resource systems, a pond of which individuals and institutions providing shared resources are all resource units with more possible frequent occurrence of adverse selection. Such public pond resources are different from pure public goods, which are not exclusive but shared, from private goods or toll goods, which are exclusive and used individually, or from club goods, which can be both exclusive and shared. Such a common pond resource supply system can be jointly provided or produced by more than one person or enterprise, such as the integration of institutional and individual resources by the sharing platform. The actual use of public pond resources can be carried out by multiple occupiers simultaneously or sequentially, but the resource units cannot jointly use or occupy the pond resources. For example, only one car is allowed to park at a time in a shared parking space. Therefore, the sharing economy platform basically meets Ostrom’s definition of public pond resources. 2. The sharing economy helps reduce the tragedy of the commons Problems such as environmental pollution caused by long-term industrial development and resource depletion due to excessive utilization of non-renewable resources are mainly attributable to the unclear definition of property rights of natural resources or ecological environment. Consequentially, the rational economic man will maximize the ownership of resources in the short term, just like the overfishing of public fishponds. There are two reasons why sharing economy can reduce the tragedy of the commons. First, the transaction mode of sharing economy reduces the requirement of clear ownership of property rights, and resource users do not need to take resources as their own, which can reduce the development of total resources. For example, ofo is used to replace the purchase of new bicycles to realize short-distance connections, which is convenient and economical. Second, through collaborative consumption, sharing economy can maximize the use value of resources already utilized. For example, community residents can rent maintenance tools from their neighbors through sharing platform. 3. Sharing economy provides an innovative way of institutional supply The innovation of supply system in sharing economy is manifested in the reduction of transaction cost on the one hand, and the improvement of transaction matching degree on the other. The problem of transaction cost widely exists in all kinds of economic activities. By narrowing the boundaries of enterprises, sharing economy has replaced the scale economy originally created by large enterprises with the network economy of the platform. The transaction cost is greatly reduced because of information disclosure and convenient transfer of the right to use of the platform, together with

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the oustanding reduction of the cost of information search and bargaining. Another institutional innovation of the sharing platform lies in the integration of many individual and fragmentary resources, which makes the trading market dense, thus more conducive to the matching of resources. This innovative supply system, together with the feedback mechanism of information disclosure and evaluation of the sharing economy platform itself, forms a kind of self-governance of the public pond. The supply system itself can adjust the way of resource distribution, reduce transaction consts, and improve the efficiency of configuration. In addition, the information disclosure made possible by the sharing economy platform that relies on the Internet, big data and cloud computing, to realize the agglomeration of information, guarantees the success of transactions, so that suppliers can timely adjust their supply structure through the demand information provided by the platform. At present, most sharing platforms have the function of user evaluation, and an effective evaluation system can reduce the moral hazard and adverse selection caused by information asymmetry. This chapter will verify whether sharing economy can truly meet the expectation of self-management of public pond resources. Sharing economy itself and the “self-governance” inherent in it were rare in previous economic models. Such innovation requires corresponding changes in the governance mode of the government. When the pace of innovation exceeds the reach of government regulation, regulation will become outdated, excessive, and a hindrance to competition. Sharing economy persistently calls for the structural adjustment of economic development, which is in line with the reform direction of “cutting overcapacity, reducing excess inventory, and deleveraging” of the Chinese government. However, whether sustainable development can be achieved also brings new challenges to the role positioning and governance plan of the government. At present, sharing platform lacks an effective governance mechanism from the government, and the macro environment for a credit evaluation system is not yet complete. There have appeared problems in many sharing industries that cannot be solved through self-governance, for example, the encroachment of too many shared bikes upon crosswalks, the disturbance caused by house sharing to the lives of original residents and the collective boycott of car sharing by the traditional car rental industry. The emergence of these problems is largely due to the lack of coordination between government governance and self-governance of the sharing industry. The lack of government governance limits the self-governance of sharing economy. Based on this observation, this chapter intends to provide solutions for the realization of coordination between self-governance and government governance. To sum up, this book will investigate whether the cooperative consumption pattern of sharing economy can help realize sustainable self-governance in the theory of common pool resources, so as to solve the problems of dual externality and overcapacity in the development of urban economy, and study how the self-governance of sharing platform can coordinate with government governance for the improvement of the efficiency of the allocation of urban resources.

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2.4 Government Governance of Sharing Economy Platforms Due to the late start of sharing economy, the traditional governance of the government has encountered challenges, and the otherwise reasonable regulation mode is in urgent need of innovation. Starting from the related industries of sharing economy, most of the current research have studied the defects in government governance and put forward some suggestions for regulation. The following is a detailed review. 1. The necessity for government’s regulation of sharing economy There are mainly two major opposing views on whether government should intervene in the market of sharing economy, Those who support it believe that sharing economy can help build more trust and more efficient economic behavior among strangers, so the government should help to legalize more forms of sharing economy and introduce more flexible policies and regulations (Minifie and Wiltshire 2016). Through an extensive market survey, Hartl et al. (2016) found that that most participants of collaborative consumption model believe that government governance and supervision can effectively promote cooperation, because the selfish behavior of the economical man will reduce the incentive to share personal assets. Since the core interest demands of bike-sharing enterprises, bike users and the government are bound to conflict in the operation of bike sharing, Hao (2018) believed that the supervision of bike sharing must be strengthened. After further considering the unfair competition, he found that the unfair competition in sharing economy is mainly reflected in tax payment: while many traditional enterprises complain that they have to pay taxes and are subject to strict supervision, sharing enterprises hardly pay any taxes and avoid legal supervision by virtue of their designation as an emerging industry (Koopman et al. 2015; Wu and Fang 2016). Therefore, it is a more effective way to improve the level of industry supervision and transparency, track large-scale market mergers and reorganizations, and strengthen efforts to discriminate and punish monopoly and unfair competition. Those against regulation argue that sharing economy is based on the Internet, and the reputation accumulated in the transaction process can play the governmental role of protecting buyers and avoid market failure. Meanwhile, the profit brought by the flexible price mechanism can guarantee the product quality as a replacement of mandatory regulations (Sundararajan 2012). Sparks (2015) believed that sharing economy redefines the boundary of consumption and labor force, which has a great impact on traditional industries and changes the original economic barriers to entry. Therefore, the government needs to make a comprehensive assessment instead of simply preventing or encouraging reckless progress. Li (2017) believed that the reasons for regulating sharing economy come from two aspects: one is the inherent needs of sharing economy, and the other is the challenges posed by sharing economy to the traditional economy. From the perspective of market access and withdrawal, we should abide by the general rules of the legal system of market supervision and guide the sharing economy model along the direction that is conducive to the maximization of the welfare of operators and consumers and the maximization of

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social public interests through the rules of interest transmission, rather than suppress it through administrative orders. In addition, from the perspective of whether sharing economy can be environmentally friendly, the nature of sharing economy born under the environmental crisis is consistent with the concept of sustainable development and can help the government with its commitment to the realization of sustainable development (Bonciu and Balgar, 2016). However, it is difficult to determine the role of current car sharing in reducing greenhouse gas emissions, especially when a large number of carless households enter the car sharing market, whose car sharing behavior may increase greenhouse gas emissions (Martin and Shahhen 2011), so it needs to be screened by the government. Contrary to many scholars who support the environmental nature of sharing economy, Wu (2018) held a pessimistic attitude, believing that sharing economy itself contains environmental risks, because the activation of dormant scattered idle resources and concentrated high-intensity use will produce a large amount of consumption and pollution, and large-scale public participation will also bring challenges to environmental regulation. For example, Airbnb allows homeowners to rent their idle houses to tourists in a short period of time, resulting in a place originally planned as a residential area becoming a “commercial hotel” area (Fraiberger and Sundararajan 2015). Therefore, to deal with the environmental risks of sharing economy, it is necessary to innovate on the current government-led environmental regulation mode and build a cooperative supervision model featuring the coordination and cooperation between the government and sharing economy platform. 2. The dilemma of government supervision over sharing platforms Liu (2016) believes that there are many problems in traditional regulation for sharing economy, such as lack of coordination in regulatory concepts, excessive reliance on prior regulatory measures, low effectiveness of regulatory measures, and emphasis on hard laws rather than soft laws. Luo and Zhongo (2018) believed that sharing economy has injected great vitality into the innovative development of economy, brought convenience and benefits to people’s lives, and changed the content and structure of legal relations in the traditional economic model by virtue of its extensive participation, non-professionalism and maximum activation of idle resources. This poses new challenges and problems to the government supervision rooted in the traditional economic model. Government regulation should respond to the technological innovation of sharing economy with institutional innovation by: adhering to the regulatory concept of incentive based on prudent accommodation, building a cooperative regulatory system with self-regulation as the main part and administrative regulation as the auxiliary part, building an online credit platform that pays more attention to information screening, and improving consumers’ ability to identify and absorb information and giving play to the role of informal supervision rules. Wei and Tan (2018) discussed and analyzed the deficiencies of the current market supervision system in its supervision and regulation of sharing economy from the perspective of market access system, competition system and Internet supervision system. On this basis, they put forward such suggested measures as perfecting the relevant laws

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and norms of market supervision, innovating the concept of regulation and multiple regulatory methods, and improving the level of public credit. The unfair impact of sharing economy on traditional economy caused by tax evasion and lack of supervision from the perspective of taxation has also been criticized. Liu (2018) suggested that the government as a “visible hand” should appropriately guide the norms and formulate tax preferential measures to pareto-improve sharing economy and increase the welfare of the whole society. Bai and Zhu (2017) analyzed the governance model reform and challenges facing the development of sharing economy in China from five aspects: new organizational model reform, new competition order and pattern change, new requirements of industry management, new challenges of property right system and new changes in market supervision. They suggested that a sound institutional environment and regulatory system are the basis for the development of sharing economy, and the establishment of multi-party cooperative governance mechanism and information platform of sharing economy is the guarantee for the development of sharing economy. 3. The path and tool of sharing economy regulation Ying and Tu (2010) suggested the use of information tool for regulation. As a regulatory tool that provides information to transaction subjects or regulatory organizations for better quality of decision making, regulation tools, information tool has a weaker effect on private rights and lower use cost than a traditional regulatory tool. It is therefore one of the most respected market-friendly regulatory tools. Li (2017) emphasized the role of credit regulation. He believed that different types of sharing economy bring challenges to the current regulatory system. Currently, there are problems such as ambiguous legal positioning of platform enterprises, damage to the rights and interests of transaction subjects, intensifying intellectual property contradictions, unfair market competition, and negative externalities of public goods. All these call for innovation in the application of laws and regulations, the allocation of administrative supervision power, the transformation of supervision consciousness and the perfection of supervision means. Therefore, it is necessary to establish a credit-centered classified supervision system for sharing economy and form a pattern where the market is jointly governed through enterprise autonomy, selfdiscipline, social supervision and government regulation. This will be conducive to easing the conflict between government’s market regulation and its encouragement for the development of sharing economy, and breaking down the information island between regulatory institutions, so as to build up an integrated online and offline regulatory system. Cai (2017) believed that the effectiveness of government regulation on sharing economy should be improved from the aspects of guidance and management in different industries, balance the relationship between innovation and regulation, improve infrastructure and institutional environment, and take into account the dual goals of efficiency and quality of government by setting “service standards”. Moreover, car sharing enterprises should be urged to improve their deposit system, the construction, opening and use of personal credit database accelerated, and correct public opinion guided pre-emptively. Geng (2017) believed that the three major

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contradictions of sharing economy are the contradiction between openness and efficiency and mechanism obstacles, the contradiction between sharing resources and consolidating benefits, and the contradiction between innovation and inefficient supervision. He believed that resolving the three major contradictions is the key to releasing economic dividends and innovation vitality of sharing economy. Breaking through mechanism barriers and interest barriers, and innovating regulatory methods are the primary means by which to resolve regulatory contradictions, and also an important impetus to sharing economy. FU (2017) suggested the establishment of a hybrid regulatory model in sharing economy, which mainly focuses on the adjustment of competition law and is supplemented by other regulations and self-regulation. 4. Regulatory cases of typical industries of sharing economy Some scholars have specifically discussed the regulation of typical industries of sharing economy. For example, Guo (2017) and Wang (2017) discussed the regulation of online car-hailing, arguing that the current regulation of online car-hailing is too rigid, which is contrary to the essence of “sharing”. In view of the existing problems in the bike-sharing industry, Tan (2017) pointed out that an important reason for the illegal phenomena such as indiscriminate parking in the development of bike-sharing is the “bottom line competition” between bikesharing operators, vicious competition between bike companies, and the “prisoner’s dilemma”. The underlying logic is: In terms of rules formulation and enforcement, bike operators cater to some consumers and increase their tolerance for various violations, thereby expanding their market share. To eliminate these violations, operators must formulate self-regulatory norms and strictly enforce them. Liu (2017) also believed that bike sharing does not belong to the category of sharing economy in a strict sense. It is just an intelligent rental model supported by modern mobile Internet technology and Internet of Things technology, which is not fundamentally different from traditional bike rental. The electronic fence technology may become a technical means to solve the problem of indiscriminate parking of shared bikes, but the application of this technology requires the coordinated promotion of different supporting policies. Sun et al. (2018) believed that the supervision of shared bikes is faced with problems such as wide distribution, difficulty in recycling management, lack of guarantee of vehicle safety and imperfect industry norms. Therefore, it is necessary to continuously improve the quality of supervision from the perspectives of perfecting public transportation system, innovating management mode, improving safety factors and access threshold.

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Tussyadiah, I.P. An exploratory study on drivers and deterrents of collaborative consumption in travel//Tussyadiah I, Inversini A. Information and communication technologies in tourism, 2015. Switzerland: Springer International Publishing, 2015. Tussyadiah, I.P., Pesonen, J. Impacts of peer-to-peer accommodation use on travel patterns. Journal of Travel Research, 2016, 55 (8): 1022–1040. Wang, D., Li, M., & Guo, P., et al. The impact of sharing economy on the diversification of tourism products: implications for tourist experience//Inversini A, Schegg R. Information and Communication Technologies in Tourism, 2016. Switzerland: Springer International Publishing, 2016. Wang, D., Nicolau, L. Price determinants of sharing economy-based accommodation rental: a study of listings from 33 cities on Airbnb. com. International Journal of Hospitality Management, 2017, 62: 120–131. WANG Dan王丹, Li Bin李斌. Evolution of collective action system: A review of Elinor Ostrom’sself governance theory. Law and Society, 2018 (14): 232–233. WANG Ding王玎. Online car-hailing supervision from the perspective of sharing economy. Chongqing Social Sciences, 2017 (3): 33–39. WANG Shuilian王水莲, Li Zhigang李志刚, Du Yingying杜莹莹. Research on value creation process model of sharing economy platforms -- A case study of Didi, Airbnb and Douyin. Management Review, 2019, 31 (7): 45–55. Wei Wenson魏文松, QIN Wanpin覃碗萍 2018Wei Wenson魏文松, QIN Wanpin覃碗萍. Challenges and implications of sharing economy development for the market regulation system. Journal of Guangxi Economic Management Executive Institute, 2018, 30 (1): 85–89. Wilhelms, M., Merfeld, K. & Henkel, S. Yours, mine, and ours: a user-centric analysis of opportunities and challenges in peer-to-peer asset sharing. Business Horizons, 2017, 60 (6): 771–781. Wilson, R.K., Eckel, C.C. Elinor Ostrom: “a magnificent and irreplaceable treasure. Southern Economic Journal, 2013, 79 (3): 486–495. WU Ang吴昂. Environmental risks and regulatory response of sharing economy. Academic Exchange, 2018 (2): 112–119. WU Si, Chen吴思, Chen Yong陈勇, Zhang Yun张云, et al. Discussion on the construction model of urban underground pipeline sharing platforms. Bulletin of surveying and mapping, 2015 (12): 77–80. WU Liwu吴力武, Meng Qixia孟齐霞. Research on the construction of document information resource sharing model in the process of interregional urban integration -- A case study of Guangzhou and Foshan. Library Work and Research, 2012 (5): 63–65. WU Xiaojuan吴晓隽, Fang Yue方越. Challenges of sharing economy and reflections on government regulation reform. Shanghai Economic Research, 2016 (9): 9–16. WU Xiaojun吴晓隽, QIU Jialu裘佳璐. A study on influencing factors of Airbnb housing price -Based on data of 36 cities in China. Tourism Tribune, 2019, 34 (4): 13–28. XU Jin徐晋, ZHANG Xiangjian张祥建. On platform economics. China Industrial Economics, 2006 (5): 40–47. YING Feihu应飞虎, Tu Yongqian涂永前. Information tools in public regulation. Social Sciences in China, 2010 (4): 116–131, 222–223. YU Keping俞可平. Governance and Good Governance. Beijing: Social Sciences Academic Press, 2000. Zach, J., Nicolau, J.L. & Sharma, A. Disruptive innovation, innovation adoption and incumbent market value: the case of Airbnb. Annals of Tourism Research, 2020, 80: 1–12 Zervas, G., Proserpio, D., & Byers, J.W. The rise of the sharing economy: estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research, 2017, 54 (5): 687–705. ZHANG Jie张杰. Credit Dilemma and Solutions in the development of sharing economy in China. Economic Review, 2017 (8): 75–80. ZHANG Xin张鑫. Comments on Ostrom’s theory of self governance. Reform and Strategy, 2008, 24 (10): 212–215.

References

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ZHENG Zhilai郑志来. Research on sharing Economy and the new business model from the perspective of supply side. Exploration of Economic Problems, 2016 (6): 15–20. Zhu, G., Li, H. & Zhou, L. Enhancing the development of sharing economy to mitigate the carbon emission: a case study of online ride-hailing development in China. Natural Hazards, 2018, 91 (2): 611–633.

Chapter 3

An Overview of the Development of Sharing Platforms and Urban Construction in China and Other Countries

The Report to the 19th National Congress of the Communist Party of China clearly stated that “we will deepen the integration of the Internet, big data, artificial intelligence and the real economy, and foster new growth areas and growth drivers in such areas as mid - and high-end consumption, innovation-driven development, green and low-carbon development, sharing economy, modern supply chain and human capital services”. Urban development has been in the process of transformation, and every key technological node may lead to a series of changes in our life and the city, thus posing new challenges to urban planning. As shared bikes fill streets and alleyways, sharing economy is developing rapidly in areas such as transportation, housing, living services, medical services, knowledge and skills, and production capacity. As a result, urban builders must reckon with the impact of sharing economy on the way of life and work, the economic and social organization, the urban form structure and even the governance model. Sharing itself is to recycle products otherwise used by only one person among many people, so as to maximize the utilization of resources. Therefore, the development of sharing economy needs to rely on a large number of population clustering, and population density is an important prerequisite for its smooth development. The population density of China’s cities is much higher than that of the countryside and more than any other country in the world. For example, the population density of Shanghai in 2017 was 3814 people per km2 , while that of the central urban areas such as Huangpu and Hongkou were 32,004 people per km2 and 34,058 people per km2 respectively.1 China has such a large population, which provides a good foundation for the development of sharing economy. Coupled with the popularization and the consequent wide use of the Internet in many Chinese cities, the sharing economy there has developed rapidly. The reason why sharing is discussed as a phenomenon and trend that may affect urban development is that the current development of sharing economy is more 1

Source: Shanghai Statistical Yearbook 2018.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_3

35

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3 An Overview of the Development of Sharing Platforms and Urban …

combined with urban resources. This combination will change directly the direction of urban economic development, the way of resource allocation and the governance model of the government. For example, before the emergence of shared bikes, many cities, like Beijing and Hangzhou, had government-led short-term public rental bikes. Public bicycles of this kind are provided, managed and distributed by the government. Parked in designated points, these bikes belong to a certain public welfare industry monopolized by the government. However, due to the limited delivery points and the need to borrow and return the vehicle in a fixed place, the impact of such public bicycles on residents’ lives and urban traffic has been limited. Shared bikes with their sudden boom have in fact presented themselves as competitors to the rental bikes of the government. Besides, they have attracted the attention of many consumers with more flexible places for borrowing and returning bikes, more affordable prices, and commercials featuring environmental protection. Shared bikes have greatly improved the utilization rate of bicycles for short trips, but at the same time, they have also brought many problems to the management of urban public transport. This chapter, after sorting out the development status of Chinese and foreign sharing platform enterprises, studies the impact of sharing platforms on urban construction and analyzes the problems and challenges of the construction of urban sharing platforms.

3.1 Status Quo of Sharing Economy Platforms This section summarizes the development status of sharing economy in China and other countries, with a focus on representative enterprises in ride sharing, accommodation sharing and co-working.

3.1.1 An Overview of General Development2 The global sharing economy is witnessing a rapid development, marked by more and more participants, a substantial increase in the income of sharing platforms, and a continuous expansion in its domains. Airbnb, a sharing platforms in house accommodation has reached more than 34,000 cities worldwide, valued at $25.5 billion. By the end of 2015, 198 institutions in the United States had expressed their willingness to invest in sharing economy, up from less than 20 in 2010, and the number is still rising. From the fields involved in sharing economy, the statistical data from the United States, the United Kingdom and China all show that those with the highest market valuation or income are sharing finance, transportation and travel, house accommodation, living services, etc. At present, more than 5 categories 2

Source: The data in this section are from the Annual Report on the Development of China’s Sharing Economy (2016–2018), issued by Sharing Economy Research Center of State Information Center of China.

3.1 Status Quo of Sharing Economy Platforms

37

and 13 sub-categories of sharing economy enterprises and models have emerged in China and other countries, including car rental and carpooling in the field of transportation, taxi, ship sharing, aircraft rental and bicycle sharing; accommodation and office sharing in the field of travel accommodation; crowdsourcing logistics in logistics field; short-term hired physical labor and such collaborated mental labor as knowledge and skill in service and skill sectors; exchange of household goods and business supplies in the field of idle commodities, etc. For more details, please refer to Li (2017), who classifies the current global sharing enterprises into 7 categories and 13 sub-categories. As can be seen from Table 3.1, sharing economy has penetrated many industries, such as products, space, knowledge, labor, finance, etc., affecting every aspect of people’s life and work. In the following, the sharing platforms in China and other countries are analyzed and sorted out.

Table 3.1 Classification of sharing platforms and representative enterprises Types

Products

Names of enterprises

Shared products

Clothing

RenttheRunway, PoshMark, Second-hand Clothing Platform, Meilizu, MSParis, YCLOSET, Jiuwu, Dorasdream

Catering

Eatwith, Plenry, Feastly, Huijiachifan, Woyoufan, Xiachufang, Mishi, Mamadecai

Travel

Uber, Lyft, Zipcar, BlaBlaCar. Netjets, ACS, PROP, G-Auto, Didi Chuxing、Dida Chuxing, China Auto Rental, Youdao, Mobike, ofo

Shared space

Shared knowledge and skill

Others

Youtube, Netflix, Castorama, City Prince, Sinoesp, Yikexue

Housing

Airbnb, Mayiduanzu, xiaozhu, Dog Vacay, Easy Nest, Youtianxia, Tujia

Logistics

Instacart, Huolala, 58 Daojia, Ekuaisong, Renrenkuaidi

Office

Citizen Space, Maxofficice, SOHO3Q, Kr Space, Regus

Knowledge

Wikipedia, Coursera, Duolingo, Data.gov, baike.baidu.com, jg.com.cn, zhihu.com, Wodong

Skill

TaskRabbit, Skill Share, Etsy, zbj.com, 680.com, mingyizhudao.com, http://pay.zaih.com

Shared labor

Handy Book, Edaixi, helijia.com, 58 Daojia, ayilaile.com, daojia.jd.com, Renrenkuaidi

Shared finance

Kickstarter, Lending Club„ Crowdfunding, zhongchou.com, lu.com, uland.taobao.com, jiedaibao.com, renrendai.com

Shared industry chain

Tao Factory, Shenyang Machine Tool (Group) Co I5 Intelligent Platform

Shared time

Timebanks, Labor time exchange platform

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3 An Overview of the Development of Sharing Platforms and Urban …

1. Status Quo of the Sharing Platforms Outside China In this section, countries with mature sharing platforms such as the United States, France, South Korea, Japan and Singapore are selected for an analysis and comparison with China. (1) The United States as the birthplace and creative center of sharing economy The United States is the birthplace of modern sharing economy, where many seeds of ideas about the sharing economy model in the world first sprouted and blossomed. In terms of economic size, the sharing economy market in the United States is estimated to be US $ 510 billion, accounting for about 3% of the US GDP, which ranks first in the world. According to a survey of Intelligence Research Group, one out of every five Americans is working for a sharing economy platform, and two out of five have enjoyed the services of a sharing economy platform. The majority of the participants of sharing economy in the United States are young people, more than 50% of whom are between the ages of 18 and 34.3 In December 2014, PWC and BAV Consulting conducted a sample survey among 1000 American sharing economy consumers. It showed that 44% of the respondents were familiar with sharing economy, and 18% of them had participated in sharing economy as consumers. And 7% of respondents participated in the sharing economy as suppliers. In 2015, the National League of Cities (NLC) conducted a survey of attitude to sharing economy in 30 large cities in the United States. The survey showed that 9 cities were completely positive and 21 cities had mixed feelings. And of these 30 cities, half had begun to formulate corresponding policies and control plans. The United States, home to Uber and Airbnb, representative of shared ride and shared space, respectively, has more recently incorporated the creativity of the sharing economy into every aspect of work and life. ShareDesk, a shared office platform, for example, takes the Airbnb concept to the office, through which larger companies can provide idle desks and conference rooms, and mobile workers can work temporarily from any nearby location. This kind of shared office mode is especially suitable in developed cities where the tempo of life is fast; it is not only convenient, but also improves work efficiency. Another example is Eatwith, a San Francisco-based food-sharing platform that offers travelers the catering services in local homes. On the supply side, the food provider can open a dinner party on Eatwith’s app and accept orders from tourists. On the demand side, anyone can order a favorite private dinner party of their choice located around the world on the app. From the concept that sharing economy uses idle resources, Eatwith’s resource saving is reflected in the Chinese witticism, “It makes no much difference cooking for one person or three.” It can be seen that the United States has become a relatively mature and stable market in sharing economy. 3

Source: An In-depth Survey and Market Prospect Report of the US Sharing Economy 2017–2023, Intelligence Research Group, 2017.

3.1 Status Quo of Sharing Economy Platforms

39

(2) The legislation on sharing economy in France According to PWC, the sharing economy in European countries will grow 20-fold in the next 10 years, with France as a main market. Ride-hailing giant Uber has 2.3 million employees in France, home-sharing giant Airbnb has more than 10 million listings in the country, and more than 90% of French residents have used a sharing platform.4 In addition to the above-mentioned international giants in sharing economy, the local sharing platforms in France also occupy an international leading position in this field, registering a rapid development and a large scale, covering such varied fields as clothing, food, entertainment, shopping, service and financing, housing, and transportation. The emergence, development and steady ascent of sharing economy in France is the effect of the various local conditions combined, such as technology, economy and culture. In terms of consumption concept, the exchange of goods and services between individuals is relatively common in France, and the second-hand transaction and second-hand market are also very mature, making the pattern of goods sharing and collaborative consumption readily acceptable among people. Macroeconomically, like the Americans, the French people have changed their life concept and consumption model after the 2008 economic crisis. People are willing to make use of diversified resources or fragmented time to gain some benefits by providing services on the network platform, so as to create value and increase their income. Technologically speaking, France leads Europe in smart terminals, Internet technology and mobile phone penetration, with the compatibility between resource supply and demand improved by its big data analysis and mobile payment. From the perspective of green development, France has always attached great importance to energy conservation and environmental protection, constrained by its the lack of resources. This awareness has deeply permeated all walks of life in France, where people advocate the sharing economy model and believe that resource redistribution can save costs, improve utilization rate, and reduce environmental pollution. From the perspective of social system, the corporate income tax rate in France is as high as 33%. The labour cost of enterprises is high; so is the corresponding service price. Compared with traditional transactions, the shared products and services brought about by the sharing economy model are more fairly priced and afffordable, thus gaining popularity among French consumers. From the perspective of employment pursuit and preference, France encourages innovation, advocates occupational freedom, and has mature laws and regulations to protect freelancers. Since the employment mode of sharing economy is more flexible, and practitioners on the platform can freely enter or exit the social production process in a relatively stable manner, it fosters a large group of free employees, providing new employment opportunities and reducing the underlying problems that unemployment can bring. In order to regulate the market of sharing economy, the tax department of France released a guideline on August 31, 2016, requiring netizens to declare the income obtained through online sharing platforms and include it in the tax category. It means that the practitioners of online car-hailing and house-sharing with certain income will be included in the category of freelancers, who can operate legally so long as they 4

Data source: China Business network (http://www.cb.com.cn/index/show/zk/cv/cv13411791199).

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3 An Overview of the Development of Sharing Platforms and Urban …

bear corresponding taxes. On October 28, 2016, the bill was passed by the vote of the French National Assembly, indicating that France had officially recognized the legality and compliance of the sharing economy and begun to implement a systematic supervision of it.5 On the whole, people from all walks of life in France have a positive opinion on sharing economy, believing that it not only reduces the cost price of the service industry, improves the purchasing power of residents, but also enhances the competitiveness of relevant industries of France. (3) The rapid development of sharing economy in Asian countries The Seoul Metropolitan Government made public the Declaration of Sharing City Seoul Initiative on September 20, 2012, and the Ordinance on the Promotion of Sharing, which includes shared projects and policies on shared city infrastructure construction and expansion that are closely related to citizens’ lives. It also launched the Share Hub online platform (http://sharehub.kr) on June 26, 2013, which was designed to bring together sharing-related information and sharing platform information. Through the Hub, citizens can easily find sharing-related information and sharing platforms by searching the term “sharing city”, and they can easily use shared vehicles, shared books, shared tools and shared parking lots. Residents of many neighborhoods in Seoul can register what they think they can share but have to rely on the government or community management for help. For example, private car owners need to sign an agreement with the government to offer their cars for sharing, and there are specific laws and regulations on the insurance and quality of cars. In this environment, private cars can be shared in the market if they are registered. South Korea’s private car sharing model is based on a community website provided by the government for a coordinated management. Robin Chase, founder of Zipcar, an American car-sharing company, has set up a similar company in France, offering an online P2P (peer-to-peer) platform for residents to register their cars to be shared. Although private car sharing in Seoul, South Korea, is solely managed by the government, and Robin Chase’s French company operates on its own, both have boosted sharing economy by reducing the marginal cost of car sharing. Japan’s sharing economy is centered around leasing, and its relatively mature sharing business covers such varied fields as shared space, shared fashion and shared service/time. The development of shared spaces came as a result from a surge in the number of tourists to Japan, causing a shortage of supply in the traditional hotel industry, and a subsequent gradual standardization of the government’s management of the homestay service industry. In shared fashion industry, LAXUS, a Japanese company, specializes in an online handbag rental service, where housewives send their idle designer bags to LAXUS, and those in need select bags on the LAXUS website. You can rent 2000 bags for 6800 yen (about US$65) per month from 52 brands, such as Louis Vuitton, Chanel, Hermes and Gucci. The housewife who owns the bag can earn 24,000 yen (about US$230) a year, turning the traditional luxury bag

5

Source: Sina finance and economics network (https://finance.sina.com.cn/roll/2016-10-13/docifxwvpqh7277796. SHTML).

3.1 Status Quo of Sharing Economy Platforms

41

into an investment commodity with an annual interest rate of about 10%.6 In the field of ride-sharing, in addition to international companies, like Uber, local ride-sharing companies in Japan have also developed rapidly and steadily, including DENA and TIMES (car sharing), AKIPPA (shared parking), ANYCA (shared sports car), Date Bike (shared electric vehicle), and COGOO (shared bike) (Wu 2018). Similarly, Singapore also adopts an open and progressive attitude towards sharing economy due to its predicament with resource exhaustion. In 2012, Rent Tycoons, a personal-item-sharing site was founded with a corporate mission to achieve a zerowaste rate. Later, Tycoons and five other Singaporean sharing platforms established a sharing economy organization, which aims to keep people’s attention on “sharing” and provide opportunities for mutual assistance and cooperation among members of the organization, as well as to engage in dialogue with public sectors such as education and government. These sharing economy platforms revolve around the sharing of real or virtual goods, with the goal of saving resources through the sharing model (Yang 2017). In the ride-sharing sector, GrabHitch, Singapore’s homegrown ride-sharing platform, focuses on part-time drivers as major service providers, in line with its original intention of community sharing of cheap and green rides. In 2017, the Singaporean government imposed regulations on Airbnb and Uber. For the former, government officials are entitled to enter a home to check whether the residents are renting it illegally7 ; the ride-sharing company’s license will be suspended for up to one month if an Uber driver is found to have failed to hold a valid license or insurance three or more times, and the driver involved can also face fines and imprisonment. This means that Singapore has begun to gradually integrate the sharing economy platform into the mainstream economy. Seen from the development of sharing platforms in the above countries, the following two characteristics emerge: first, the birth and growth of sharing platforms is a demand-driven market behavior, whose original intention was to use idle resources to achieve the green development goal of energy conservation and environmental protection; second, at the government level, the attitude towards the development of urban sharing platforms is basically positive and encouraging, and the governance trend is that of standardization and legalization. 2. Development status of sharing platforms in China Though sharing economy did not originate in China, it has been the world’s leader in the development of sharing economy in recent years. With a huge population base and population density in many of its first-tier cities, China boasts the most extensive users of sharing economy, providing a good opportunity for its development. In 2017, the largest single venture capital investment in the world went to Didi Chuxing, a representative enterprise of China’s sharing economy, amounting to 5.5 billion yuan. In the 2016 Government Work Report, Premier Li Keqiang put forward the need to “support the development of sharing economy” in the future, speaking volumes for the important role of sharing economy in China’s supply-side reform, the core task in 6 7

Data source: Sohu http://www.sohu.com/a/287016307_117373. Source: https://finance.huanqiu.com/article/9CaKrnK0M0Y.

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3 An Overview of the Development of Sharing Platforms and Urban …

the next few years in China’s 13th Five-Year Plan. Since sharing economy contains huge potential momentum, it has become a new economic plan for the structural reform featuring “destocking and cost reduction”. The 19th CPC National Congress clearly declared that socialism with Chinese characteristics has entered a new era and made strategic plans and comprehensive arrangements for a new stage of development. China is now standing at a new historical starting point, where the principal conflict facing Chinese society has changed to a conflict between unbalanced and inadequate development on the one side and the people’s ever-growing desire for a better life on the other. The development of sharing economy is a key to resolving the major conflict in economic and social development and achieving high-quality economic development. The sharing economy characterized by “Chinese-style innovation” has attracted worldwide attention. The US Bloomberg News, the UK’s Financial Times, Japan’s Nihon Keizai Shimbun, Germany’s Deutsche Welle, and other media have paid great attention to and praised the development of China’s sharing economy. Commenting on the innovation momentum of China’s sharing economy, the New York Times pointed out that now it’s Silicon Valley’s turn to copy Chinese companies and the days when China copied the United States are gone and the United States is copying China in mobile technology. China’s sharing economy innovation has also been praised by foreign entrepreneurs. Nathan Blecharczyk, co-founder and chief strategy officer of Airbnb, pointed out that compared with other countries, China is more recognized, enthusiastic and responsive to the sharing economy innovation model. At present, China’s sharing economy has broken the early model of idle goods resource allocation, and expanded it to such services as education, medical, media content sharing, idle funds crowdfunding, etc. Specifically, the trading volume of China’s sharing economy market in 2017 was about 4920.5 billion yuan, an increase of 47.2% over the previous year. Among them, the market turnover of non-financial sharing sectors (including living services, production capacity, transportation, knowledge and skills, housing and accommodation, etc.) was about 2094.1 billion yuan, an increase of 66.8% over the previous year. The market turnover in the financial sharing sector reached 2.826.4 billion yuan, up by 35.5% over the previous year. In 2017, the structure of China’s sharing economy continued to improve. The share of non-financial sharing market transactions in the total scale increased from 37.6% in the previous year to 42.6%, while the share of financial sharing market transactions in the total scale decreased by 5% from 62.4% in the previous year to 57.4%. In terms of the growth rate of each region, the three areas of knowledge and skills, living services and housing and accommodation witnessed the fastest growth in 2017, with the growth rate of 126.6, 82.7 and 70.6% respectively. From the perspective of investment and financing market, it is preliminarily estimated that the financing scale of sharing economy in 2017 was about 216 billion yuan, up 25.7% year on year. Among them, the financing scale of the sharing economy in transportation, life services and knowledge and skills ranked the top three, reaching 107.2 billion yuan, 51.2 billion yuan and 26.6 billion yuan respectively, with year-on-year growth of 53.2, 57.5 and 33.8% respectively. Five of the top 10 global venture capital investments in 2017 went

3.1 Status Quo of Sharing Economy Platforms

43

to Chinese companies. The single largest was Didi Chuxing’s $5.5 billion financing round.8 In 2018, the transaction volume of China’s sharing economy reached 2.942 billion yuan, with the development scale of living services, production capacity and transportation ranking the top three. China’s sharing economy had about 760 million participants, 75 million service providers and 5.98 million platform employees. It is worth noting that the scale of direct financing in sharing economy declined significantly in 2018, with a total amount of about 149 billion yuan, a decrease of 23.2%, indicating that investors’ enthusiasm toward sharing economy began to cool down. When examined by sector, in the field of ride-sharing, the proportion of etaxi passenger traffic in the total taxi passenger traffic increased from 9.5% (2015) to 36.3% (2018), and the annual growth rate of e-taxi service revenue was 35.3%, which was 2.7 times that of general taxi service. The popularity rate of car-hailing users among netizens increased from 26.3 to 43.2%. In the shared accommodation sector, the share of shared accommodation revenue in the accommodation industry increased from 2.3% (2015) to 6.1% (2018). The average annual growth rate of shared accommodation revenue was 45.7%, 12.7 times that of the traditional accommodation revenue. The popularity rate of shared accommodation users increased from 1.5 to 9.9%.9 According to the data, both the absolute growth volume of sharing economy itself and the growth rate relative to GDP are on the rise. In particular, the average growth rate of transportation and accommodation in 2016–2017 is very high. According to calculation, the proportion of living services decreased from 66. 22% in 2017 to 54. 02% in 2018, and the proportion of production capacity increased from 20. 08% in 2017 to 27.99% in 2018, which means that the sharing economy has gradually begun to penetrate and expand into the production field. The development of living services began to stabilize and mature. Detailed data are summarized in Table 3.2. Table 3.2 shows that what is shared varies from sector to sector. In living services, they are mainly labor sharing, representative platform enterprises including Ayilaile (ayilaile.com), Jingdong Daojia (jddj.com), etc. In production capacity, such as cooperative production model, they cover such fields as energy, factories, equipment, infrastructure, etc., representative platform enterprises including Shenyang Machine Tool (Group) Co. I5 Intelligent Numerical Control System, Tao Factory of Alibaba, etc. In ride sharing, such as cars and bicyles, the representative platform enterprises include Didi Chuxing, Uber, ofo, Mobike, etc. In knowledge and skills sharing, such as wisdom, knowledge, capability, experience, etc., the representative platform enterprises include zbj.com, Zhihu and Coursera. In house sharing, such as housing, parking space, land, etc., the represenatative platform enterprises include Airbnb, xiaozhu.com, Landshare, etc. Medical sharing: mainly involving medical equipment and doctors of small grassroots hospitals, representative platform 8

Source: Annual Report on the Development of China’s Sharing Economy (2018), issued by China’s State Information Center. 9 Source: Annual Report on the Development of China’s Sharing Economy (2019), issued by China’s State Information Center.

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3 An Overview of the Development of Sharing Platforms and Urban …

Table 3.2 Transaction volume of China’s sharing economy from 2015 to 2018 By sector

2015

2016

2017

2018

Total value/ hundred million yuan

Growth rate/%

Total value/ hundred million yuan

Growth rate/%

Total value/ hundred million yuan

Growth rate/%

Total value/ hundred million yuan

Growth rate/%

Living service

3603

–

7233

101

12,924

78.7

15,894

23.0

Productive capacity

2000

–

3380

69

4170

23.4

8236

97.5

Ride sharing

1000

–

2038

104

2010

− 1.37

2478

23.3

Knowledge & skills sharing

200

–

610

205

1382

126.6

2353

70.3

House sharing

105

–

243

131

120

–

165

37.5

Medical sharing

70

–

155

121

56

48

88

57.1

Office sharing

–

–

–

–

110

–

206

87.3

Total amount

6978

–

13,659

103

20,772

52.08

29,420

41.63

GDF share/ 1.03 %

1.84

2.51

3.26

Source The Annual Report on the Development of China’s Sharing Economy (2017–2019) released by the State Information Center with those related to the financial industry (such as crowdfunding) deleted. Note – indicates that data is missing. Data for office sharing prior to 2018 was merged into house sharing. The reason why Table 3.2 does not show the growth rate for 2015 is that official statistical data of related industries in 2014 are not available, making it impossible to calculate accurately the growth rate

enterprises including chunyuyisheng.com and mingyizhudao.com. In office sharing, mainly shared office space, the representative platforms include WeWork, Krspace, Regus, etc. Office sharing is among the top three sharing platform enterprises in 2018, and a dark horse in the sharing industry. 3. Summary of the development model of sharing economy platforms As seen from its development in China and other countries, sharing platforms can not only share physical resources, but also virtual resources. According to the characteristics and operation mode of sharing platforms, Botsman and Rogers (2010) classifies the development mode of sharing platforms as shown in Table 3.3. According to different operating channels of sharing economy, sharing platforms can also be classified into B2C (Business to Customer) and P2P, as shown in Table 3.4.

3.1 Status Quo of Sharing Economy Platforms

45

Table 3.3 Classification of development model of sharing platforms Sharing system

Product service

Redistribution

Coordinated living style

Resource type

Physical resource

Physical resource

Virtual resource

Sharing mode

Letting and leasing, Second-hand Barter, exchange of exchange of goods and transaction, exchange of virtual resources and rent goods and funds funds

Sharing characteristics

Constant ownership, maximization of use value in the multiple exchanges of use rights

Cyclic trading of ownership, decrease of homogeneous new products, decrease of second- hand garbage

Representative enterprises

Zipcar, Shenzhou Zhuanche, Meilizu, etc.

guazi.com, kongfz.com, Airbnb, SOHO3Q, 58.com, etc. xiaozhu.com, Huijiachifan, zhihu.com, etc.

Free collaborative combination, the sharing of knowledge, doublewing and alternative product to meet the high efficiency needs

Table 3.4 Classification of the operation models of sharing platforms Operation mode

B2C

P2P

Resource provider

Enterprise

Individual

Operating characteristics

Asset-heavy mode, high degree of product standardization and unification, high cost, high price

Asset-light mode as the reactivation of individual idle resources, with flexible trading, low price and high risk

Representative enterprises

Zipcar, Shenzhou Zhuanche, Mobike, Shenyang Machine Tool (Group) Co I5 Intelligent Platform, SOHO3Q, etc.

Airbnb, PP, mingyizhudao.com, xiaozhu.com, Shunfengche, edaijia.cn, Huijiachifan, etc.

3.1.2 Development Status of Urban Ride-Sharing Platform Enterprises Ride sharing mainly refers to a way in which the user pays the corresponding user fee according to the travel requirements and shares the vehicle with others without owning the vehicle. Specific platform enterprises are represented by such taxi softwares as Shunfengche, Pinche, Gongxiangqiche and Gongxiandanche. The model discussed in this book is pure sharing model, which is based on the reuse of idle resources, so most of the models involving professional hailing taxis through taxi apps are not discussed here. 2018 was a year of great reshuffle in ride-sharing industry. On the one hand, more than 90% of bike-sharing platforms went out of business; on the other hand, many traditional automobile manufacturers began to enter the ride-sharing industry. For example, in April 2018, Meituan launched taxi services in Nanjing, Shanghai and other places, threatening to split Didi Dache’s 30% market share. In July 2018,

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FAW, Dongfeng, Chang’an and other giants of traditional automobile enterprises signed an agreement of intent on smart mobility, using their own idle car inventory to integrate the superior resources of the three parties, and set up the joint venture T3 Chuxing. GWM Company Limited also launched a ride-sharing brand Olesharing, offering such services as long- and short-term rental, time-sharing rental and online car-hailing. In November 2018, SAIC officially entered the ride-hailing business with a launch of its Saicmobility, targeting middle- and high-end customer groups. At present, it has started trial operation in Shanghai. In December 2018, BMW, the first foreign auto company to obtain an online car-hailing license in China, also announced that its instant travel platform ReachNow had officially launched a private car service targeting middle- and high-end customers in Chengdu. The following section gives an in-depth analysis and discussion of representative enterprises of car sharing and bike sharing, two major categories in the field of rid sharing. 1. Car sharing In order to ease the traffic pressure in big cities, China has expanded the car purchase restrictions to eight cities including Beijing, Shanghai, Guiyang, Guangzhou, Tianjin, Hangzhou, Shenzhen, Shijiazhuang and across Hainan province. With the rapid growth of urban population, more second-tier cities will implement vehicle purchase restriction policies in the future, and there is still a large amount of demand for selfdrive to be met in China.10 According to the latest data of national motor vehicles and drivers in the first half of 2019 released by the Ministry of Public Security, as of June 2019, the number of cars in China was 250 million, but compared with 380 million drivers, the number of people who have a (driving) license but not a car is huge. At the same time, the number of newly registered cars in the first half of 2019 decreased by 1.39 million compared with the same period last year, while the number of motor vehicle drivers showed an increasing trend. Against this discrepancy in changing numbers, the demand for self-drive is difficult to meet, and people who have a (driving) license but not a car gradually turn their attention to ride sharing, providing a user base for the car-sharing market.11 It is not difficult to find that most shared cars are new energy vehicles. The main reason for this is that as a special classification of shared cars, they have two major characteristics: “new energy” and “sharing economy”, which is more in line with the national development strategy of Internet and green travel. New energy shared cars are not affected by driving restrictions in some regions, plate lottery policies and other factors, and can meet the daily travel requirements of today’s urban groups. In addition, vehicle manufacturing and sales enterprises producing new energy sharing vehicles can enjoy the supportive policies of new energy vehicles. While increasing their sales, they can also obtain national policy subsidies, a case of killing two birds with one stone. 10

Source: White Paper 2018 on Car Time-sharing Leasing in China, Analysis Consulting, published in November 2018. 11 Source: Sina (http://auto.sina.com.cn/news/hy/2019-07-03/detail-ihytcitk9513975.shtml).

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Therefore, there are two main reasons for the popularity of shared cars. First, in large and medium-sized cities, restrictions on driving, the increasing cost of owning and maintaining cars, and saturation of urban parking spaces have stimulated public demand for car-sharing. Second, investors believe that new energy vehicles are more suitable for time-sharing leasing services against the background of restrictions on driving and purchase. As a new and efficient way to travel, ideally every user can find their own suitable car. However, at the present stage, most of the shared cars put on the market are new energy vehicles, and factors such as model, comfort level and price determine the choice of users. In summary, the current target users of shared cars are mainly young groups with a high degree of adaptation to new energy vehicles. The following is a brief discussion on the two typical platforms of car sharing. (1) Zipcar Zipcar is the forerunner of modern car-sharing, which can be traced back to the “car cooperative” in Sweden in the 1940s. However, constrained by such factors as technology, policy, cost and ideas, it has never been widely popularized. As an Internet car-sharing platform in the United States, a nation on wheels, Zipcar was co-founded by Robin Chase and Antje Danielson in 2000. Unlike traditional car rental companies, which place cars in transportation hubs such as airports and train stations, Zipcar’s cars are mainly parked in neighborhoods with large numbers of residents. Zipcar’s registered members search for the cars they need through the website, phone or app, and then make an appointment to pick up and return the cars at their convenience. All cars can be started and shut down through the use of a membership card. Technologically, Zipcar has built-in system monitors that connect to membership information and dynamically monitor cars’ status. Where economic benefits are concerned, the company has mainly focused on the two requirements of economy and convenience since its establishment, and made efforts to reduce the money and time costs in car rental, thus achieving a rapid annual growth. In customer positioning, Zipcar provides different types of car-sharing services accurately to individuals, business users and college students, which is conducive to its long-term development and pricing. From a policy perspective, Zipcar has been adept at finding its allies. In Green Ridge, a nursing home in Maryland, the city government pays its residents fully for the use of Zipcar sharing to ease traffic jams and parking problems. This has made Zipcar more popular with green supporters in the US. One of the biggest problems with car-sharing is that the routine maintenance of private cars is transferred to the enterprise, so Zipcar, in order to keep its cars in good condition, has installed a company-linked system in its cars. If there is such a problem as a dead battery, a warning light inside cars automatically lights up and notifies the company, The company has a team of employees who are responsible for dealing with all kinds of problems on site. (2) GoFun trip Founded in 2015, GoFun Travel is a time-sharing rental car-sharing platform owned by China Shouqi Group. Relying on the experience and superior resources of its

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parent compay, Gofun Travel is committed to integrating users’ fragmented car needs and providing convenient, green, fast and economical travel services. Judging from the layout of GoFun travel in major cities in China in the past two years, in 2017, GoFun Travel set up hundreds of parking and pickup outlets in Wuhan, covering various popular business areas and natural and cultural attractions in the districts of Wuchang, Hongshan, Jianghan and other districts. After two and a half years of operation, it has become one of the most frequently used means of transportation in Wuhan. In 2017, GoFun Travel launched more than 100 new energy pure electric vehicles in Guangzhou and more than 200 in Hefei. In 2018, it had more than 80 pick-up and return outlets, nearly 400 parking outlets and more than 300 vehicles in Zhengzhou. In Taiyuan, Shanxi Province, there are more than 100 pick-up and return outlets, about 700 parking spaces and more than 400 vehicles. In January 2019, GoFun Travel entered Harbin and Shenyang, further expanding the travel radius in Northeast China and forming a cross-province travel network in Heilongjiang, Jilin and Liaoning. Tan Yi, CEO of GoFun Travel, said in an internal letter to employees published on the evening of August 8, 2019, that they had deployed more than 40,000 vehicles in 84 cities across China, providing users with more than 40 million trips. Version 5.0 of GoFun Travel app had been launched, and services such as car reservation and site recommendation will be launched in Beijing, Wuhan and other places. To sum up, most of the car sharing enterprises in China and elsewhere only share their own resources and have rarely invited individuals to join with their idle cars. In addition, another insurmountable problem is the parking space for shared cars. At present, most parking spaces for shared cars are provided by car-sharing platforms, and their docking with idle parking spaces in cities is limited. If some shared parking spaces can be set up in the planning stage of cities, it will be more conducive to the development of car sharing. In addition, the popularization of unmanned driving technology in the future will also give a big boost to the development of car sharing, which will be discussed in detail in Chap. 8. 2. Bike-sharing Bike-sharing, once hailed as one of China’s “New Four Great Inventions”, mainly refers to the platforms that provide bike-sharing services in campuses, subway stations, bus stations, residential areas, commercial areas, public service areas, etc. As a business model that developed rapidly between 2016 and 2017, bike-sharing caters to the rigid demand for short-distance travel among many urban workers, especially in increasingly crowded big cities and during rush hours, and the demand market is huge. However, bike-sharing is like a gust of wind, which experienced an explosive development before problems quickly cropped up, such as production capacity saturation, financing difficulties and excessive market supply quickly emerged, leading to the closure of a large number of bike-sharing enterprises. Table 3.5 analyses some of the bike-sharing services that have so far closed down, and finds that most of the failures of shared bicycles are related to their financing methods. At present, the structure of the bike-sharing industry has changed dramatically, with most of

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the remaining enterprises acquired, merged and restructured, like the acquisition of Mobike by Meituan and that of Hellobike by Youonbike. In fact, the essence of sharing economy is its advocation of the asset-light model, while light assets and heavy assets have different effects on the valuation of enterprises. For example, what Apple adopts is asset-light with a market value of more than 800 billion US dollars, while Foxconn, a producer of Apple mobile phones, is Table 3.5 Shutdown and transfer of bike-sharing platform enterprises Structural change Reason

Brand of bike-sharing

Regrouping

Hellobike and Youonbike

Mergers and acquisitions

Mobike renamed as Maigoo Closing (time of closing in parentheses)

Capital chain break

Wukong Bike (2017.6); Dingding Bike (2017.8); Xiaoming Bike (2017.7); Coolqi Bike (2017.9); Kala Bike (2017.2); Bluegogo (2017.11); Ubike (2017.6); Orange Bike (2017.9); Bike (2017.12); S-bike (2017. 7); Unibike (2018.4); Renren Bike (2017); 99 Bicycle (2017); One-step Bike (2018); Deer Bike (2017.10); Ccbike (2018); Qibeigo (2018); Diandiango; Meetbike (2017); Dbike (2017); Qbike (2018); Donkey Bike (2017.6); QFQ Shared Bike (2017); Rhino Bike (2017); Mini Bike (2017.8); Dejian Bike (2017); Time Bike (2017); 52 Bike (2017); Kirin Bicycle (2017); High Speed Bike (2019); Robin Cycle (2017.10) et al.

Persistent loss

Lixiang Bike (2017.6); Heybike (2017. 7); Ziya Bike (2017.10); Sitongbada Bike (2017.8); Gobee Bike (2018.6); Sakura Go (2017); Chao Bike (2017.9); Qicai Bike (2017.6); Lidao Bike (2017); SMLMD Bike (2017.9); Dibei Bike (2018); Zhouyi Bike (2017); Anda Bike (2017); Wang Di Bike (2017), etc.

Internal management disorder

Xiaoming Bike (2017); Tata Bike (2017); Qihao E-bike (2017); Blackbird Bike (2017); Baicycle (2017.9); 100bike( 2017.12); Mini Bike (2017.8); Heybike (2017.8); Ziya Bike (2017.10); Dragongo (2017); CoolUbike (2018); Nazhe Bike (2017); Qicai Bike (2017.6), etc.

Mass loss of bikes

3Vbike (2017.6.21); Joy Bike (2017); Panda Bike (2017); NEWBIKE (2017.12); Weilan Bike (2017) et al.

Change of business direction

No.1 Bike (2018.2); Quickto (2018), et al.

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asset-heavy with a market value of less than 2 billion US dollars. Alibaba is assetlight with a market value of over 300 billion US dollars, while Jingdong Mall is asset-heavy with a market value of less than 60 billion US dollars. Therefore, it can be found that the asset-light model is more dominant. Back to the current bike-sharing, enterprises including ofo rely on massive market launch to expand their market share, but the cost to these enterprises is very high. Such launch certainly cannot achieve the convergence of marginal cost inherent in the concept of sharing. In addition, the maintenance and loss compensation of bicycles in the later period make these enterprises inevitably asset heavy. Therefore, the industry reshuffle of bike sharing is believed to be attributable to the “fake sharing” of these enterprises. What’s more, the certain proportion of deposit in the use of shared bikes in China also increases to a certain extent consumers’ opportunity cost of consumers in their use of funds, resulting in the lack of efficiency. The following takes ofo and Hellobike as examples to study the development status of bike-sharing platforms. (1) Ofo Yellow Bikes12 The earliest pure bike-sharing platform in China originated in Peking University. According to its founder Dai Wei, the monogram of “ofo” resembles a person riding a bicycle, hence the concept of integrating sharing economy and intelligent hardware to solve the last kilometer problem. Based on this, he founded the first new Internet technology company in China operating campus bicycle business on a sharing platform. Ofo is a bike-sharing platform that creates a “dockless bike sharing” model committed to solving urban mobility problems. Users only need to scan the QR code of the bike with their smartphone terminal or directly enter the corresponding license plate number to get the unlock password, and use it whenever and wherever they want. They can also share their bikes on the ofo sharing platform and obtain the lifetime free use right of all ofo yellow bikes, with 1 for N. Since its launch in June 2015, ofo has connected 10 million shared bikes and provided more than 4 billion trips to more than 200 million users in more than 250 cities in 20 countries. Ofo’s philosophy is “riding made easier”. In the future, ofo hopes not to produce bikes, but to connect bikes, so that people can unlock bikes through ofo in every corner of the world to meet the needs of short-distance transportation. In the spirit of open platform and sharing, ofo welcomes users to share their bikes to join ofo in order to mobilize the urban bicycle stock with the Internet innovation model of sharing economy, improve the efficiency of bicycle use, and save more space for the city. Ofo advocates civilized bike use, guides users to use ofo shared bikes in a standardized manner through technical means, and collaborates with citizens and the government to optimize ride-sharing solutions for more beautiful cities. In December 2016, the bike-sharing platform ofo announced that it would launch trial operation of urban services in Silicon Valley, London and other places, with the first batch of 20,000 bikes connected for the trial services. In 12

The relevant data in this section on ofo are sourced from its official website (http://www.ofo. so/#/).

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the future, it will also launch the “grand city sharing” plan for overseas users. Ofo debuted in Japan on March 28, 2018 with the launch of its service in Wakayama City.13 In 2019, ofo experienced a credit crisis and a large number of users returned their deposits. In March of the same year, ofo launched a discount mall, where all users who had not returned their deposits could choose to “upgrade” their deposits to gold coins. With these coins, they can buy things at a discount in the mall. Meanwhile, “upgraded” users will be able to ride permanently without a deposit. Unfortunately, despite these efforts, Ofo, the bike-sharing brand that has vanished from the Chinese market. (2) Hellobike14 Hellobike is an important component of Helo Inc. Established in September 2016, it has stood out from the competition in the bike-sharing market by virtue of its differentiation strategy, lean operation driven by intelligent technology, cost control ability and user experience, and has become the leader in bike-sharing market and user reputation. It has developed into a professional mobility platform covering a complete range of services, like Hellobike, Hellomoped, Hello Car Service, Hello Dream (power exchange) and Hello Car-sharing. Compared with ofo and Mobike, Hellobike is positioned for China’s second- and third-tier cities for two considerations: first, the saturation of the bicycle market in first-tier cities, and second, the great demand for bicycles due to the underdeveloped public transportation in the former. This coincides with the corporate strategy of Youonbike. Therefore, against the backdrop of large-scale reshuffle of the bike sharing industry, Hellobike has quickly developed into a dark horse of bike sharing by drawing upon the strength of Youonbike. From the examples of the above two existing bike-sharing enterprises, it can be seen that the emergence of shared bikes has indeed met the demand for short trips and solved the sore points of users, but the excessive investment has also created the cost of overcapacity and inconvenient supervision. More and more problems have emerged in the bike-sharing industry, for example, the frequent traffic jams in such public spaces as sidewalks, bus stops and intersections, caused by random parking; the theft or sabotage of shared bikes, creating one bike graveyard after another; the need for the government to change its relaxed management style to keep the order in the city with the increasing maintenance cost of bike-sharing enterprises. The key to the sustainable development of bike-sharing in the future, which originally aimed at providing convenient means of travel lies in whether bike-sharing can really activate idle resources and make contributions to urban traffic and environmental protection, among which the governance model of the government is also of crucial importance.

13

The data about the ofo yellow car in this paper mainly come from the ofo official website (http:// www.ofo.so/#/). 14 The relevant data in this section on Hellobike are sourced from its official ofo website (https:// www.hellobike.com/).

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3.1.3 Development Status of Urban Sharing Accommodation Platform Enterprises Sharing accommodation is a new industry emerging from the collision among the Internet, sharing economy and tourism. In 2017, the transaction scale of China’s sharing accommodation market was about 14.5 billion yuan, an increase of 70.6% over the previous year. The number of participants was approximately 78 million, of whom approximately 76 million were tenants. The number of domestic housing units on major shared accommodation platforms was about 3 million. In 2018, the transaction volume of China’s shared accommodation industry was 16.5 billion yuan, up 37.5% year on year, accounting for 6.1% of the total room revenue of the accommodation industry. There were 83.45 million participants, among whom are more than 4 million service providers.15 In November 2018, the Sharing Economy Research Center of the State Information Center issued the Sharing Accommodation Service Standards in Beijing, which for the first time clearly defined the terms of sharing accommodation, platform enterprises, landlords, tenants and other industries, and made corresponding constraints and regulations on platform enterprises, landlords and tenants, applicable not only to rural homestays, but also to homestays scattered in urban communities. This means that shared accommodation begins to attract more and more attention from government departments and all walks of life, and is also an important link for the standardization and legalization of shared accommodation. Taking Airbnb, Tujia and Xiaozhu as examples, the following briefly analyzes the development of domestic and foreign sharing accommodation platforms. 1. Airbnb—the global leader in shared accommodation Airbnb (AirBed and Breakfast) is the world’s leading homestay booking platform, and a typical sharing platform enterprise that connects idle resources to the sharing platform to improve resource utilization. Founded in August 2008 and headquartered in San Francisco, California, USA, it is a service platform website connecting travelers and homeowners who have spare rooms to rent, providing users with a variety of accommodation information. As an Internet travel-home rental community, Airbnb users can post, search for vacation home rentals and complete the online booking process through the Web or mobile app. According to Airbnb’s website, its community platform offers travelers millions of unique homestay options in 191 countries and 65,000 cities, including apartments, villas, castles and treehouses. Airbnb has been dubbed “the eBay of housing” by Time magazine and its global business model is simple and uniform: it takes 6–12% of the total cost of a customer’s booking, and then passes 97% of the total to the host, so that Airbnb gets a profit on each sale from the guest and the host. Airbnb has developed into a leader in house sharing and exerted a huge influence on global tourism industry. It has not only changed people’s rental consciousness, but also changed the tourism accommodation industry and provided a reference for 15

Data source: China Accommodation Sharing Development Report 2018 and 2019, State Information Center.

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the development path of other industries. In the past, people were reluctant to let strangers stay in their homes for the sake of security and privacy, but Airbnb can make guests and hosts feel at ease with each other. Airbnb and its imitators are upending the traditional hotel industry, which tourist lodging heavily depend on, by giving travelers a choice of accommodations. Although the current share of the homestay market is only a tiny fraction of the global hotel market, the potential for such services in the future is great. The logic of the sharing economy is that idle resources can be rented out for maximum profit, which can be applied to other areas as well. Many start-ups are actually shaping their products based on this logic, for example by providing shared dining services that invite people to their homes. China is Airbnb’s fastest-growing overseas market and the second fastest growing outbound travel market in the world. Since 2008, 8.6 million Chinese travelers have used Airbnb, with more than half of the growth achieved in 2018. Airbnb’s business in China has grown 100-fold since 2016, the fastest growth rate in the world. In September 2019, Airbnb shared its third quarter business update, showing that as of August 2019, Airbnb, now 11 years old, had more than 6 million listings and 500 million guests in more than 191 countries. On average, more than 2 million people checked in each night. On August 10, 2019, the number of Airbnb guests in one night exceeded 4 million. In the first half of 2019 alone, China’s domestic business nearly tripled. It can be seen that the market potential of accommodation sharing in China is huge.16 2. Rapid development of online short-term rental platforms for shared accommodation in China A rising star in this area, China’s accommodation sharing platforms, such as mayi.com, have adopted similar business models and concepts to Airbnb and developed rapidly. Between 2017 and 2018, China’s online short-term rental market continued to see substantial growth, promising a good prospect and relatively large volume of home-stay market in the country. However, at this stage it is still difficult for most domestic consumers to obtain high-quality accommodation experience, with many problems to be solved, such as hygiene, authenticity, safety, local living experience, etc. Due to the difficulty of operation and management, some accommodation sharing platforms are unable to realize the verification of every housing source. Short-term homestay rental enterprises have been emphasizing that the products they provide have their own characteristics that can dovetail quite seamlessly with local life. This is also where they differentiate themselves from the hotel accommodation. But many homestays still leave some room for improvement in this respect, while many domestic hotel chains enjoy considerable advantages in price, comfort and convenience. Tujia is a representative of domestic online short-term rentals, which mainly provides short-term accommodation rental services. From 2017 till now, Tujia has successively acquired Mayi, Ctrip and Qunar apartment and homestay businesses, increasing the number of housing resources. After Fishtrip became a member, Tujia 16

Data source: http://www.sohu.com/a/341283048_393368.

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has formed a new group of five homestay platforms. In traffic entry, Tujia has connected eight platforms such as Mayi, Ctrip, eLong, Qunar, 58 Ganji, Wechat Hotel, Sesame Credit and Fishtrip, realizing the sharing of inventory and traffic in the industry. The businesses thus amalgamated are collectively referred to as “Tujia system”. Different from Airbnb’s model, Tujia has attempted to connect online and offline channels, and especially strengthened the quality control of the housing supply offline, through field inspection, Trusteeship of the landlord’s house, cooperation with developers, hotel-like management of the houses and so on. At the same time, Tujia has also entered into a strategic partnership with HomeAway, the world’s largest online provider of apartment rental services in launching boutique vacation apartments overseas. At present, Tujia has more than 1 million housing units, covering 345 domestic destinations and 1037 overseas destinations, making it one of the unicorns of China’s tourism and accommodation industry.17 In addition to Tujia, Xiaozhu is another representative of domestic accommodation sharing enterprises. Founded in 2012, it provides short-term homestay rental services. Up till May 2019, Xiaozhu has had the housing resource of more than 800,000 rooms in more than 700 cities and destinations around the world. There are other similar accommodation sharing platforms such as Muniao, Xiangguo Homestay, Zizaike, City-home, Your Specially, etc. These accommodation sharing platforms provide a variety of choices for travellers, and at the same time, each platform has formed a certain competitive pattern, and will seek development from differentiation strategies such as market segmentation in the future.18

3.1.4 Development Status of Urban Office Sharing Platform Enterprises While many concepts of sharing have begun to fade after a wave of reshuffling, office sharing has grown steadily, becoming one of the top three fastest growing sharing industries in 2018. In that year, the transaction scale of office sharing exceeded 20 billion yuan, up 87.3% year on year. In the future, capacity sharing based on mass innovation will become one of the important directions for the innovation and development of large enterprises, including four areas: factor pooling, capacity opening, mode innovation and regional cooperation. The number of Internet mass entrepreneurship and innovation platforms led by central government enterprises is increasing, and the service-based capacity sharing of office is increasingly becoming a new mode of transformation from sharing economy to productive services. The prototype of shared office originates from business incubator, which mainly serves small and micro enterprises. It not only provides a single shared office, but also a variety of suite services such as comprehensive property management, administration and entrepreneurship support. Compared with other sharing platforms purely 17 18

Data source: Tujia official website (https://www.tujia). See Chap. 6 for a more detailed analysis.

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for an access to resources, office sharing platforms will transform the acquired office space, provide a unified design and personalized office environment, especially for the transformation of old urban communities, and indirectly drive the development of other peripheral industries. At present, there are more than 100 companies in the market that operate office sharing platforms. In 2018, China Internet Weekly ranked the top 20 office rental companies, among which the top 10 platforms include UrWork, Kr Space Coworking, WeWork, Nash Work, Haozhu, Diandianzu, Banban, Mydreamplus, Kongjianjia and Seroffice. In August of the same year, UrWork, which ranked first, completed a strategic financing of 300 million yuan, with a total valuation exceeding US $1.8 billion. At the same time, Mydreamplus, WeWork, Kr Space Coworking and other office sharing platforms are increasing their financing scale and expanding their capacity. It is obvious that office sharing has become an emerging industry that receives special attention from capital investors. The biggest advantage of co-working is its low rent, such as Kr Space Coworking, where a shared office costs only 30 yuan for half an hour and offers free coffee, hailed as the new Starbucks. This cost advantage is attractive to start-ups and freelancers. However, many office sharing platforms with inadequate management and high staff mobility only rely on financing transfusion, which is prone to problems of large initial investment and high vacancy rate, resulting in the rapid acquisition of such enterprises as Hongtai Innovation Space and Workingdom. The office sharing model, in which people from different companies work together under the same roof and share services, is a cheaper way to rent office space than traditional office space. Different from the one-way nanny-style cultivation of enterprises by business incubators, shared office space advocates mutual cooperation among sharing enterprises in sharing resources, customers and industrial chain. This new cooperative relationship established between communities and enterprises is the biggest attraction of shared office for small and micro enterprises. Yan Liu, Urwork’s chief financial officer, once described the new co-working model as the “Disney model”, “which survives not only on selling tickets, but also on other brands derived from its value which are equally strong. Desks are to co-working what tickets are to Disney, so don’t get hung up on one single ticket; relax, move on, and keep creating value.” 1. WeWork, an explorer of the global office sharing platform19 Founded in New York in 2010, WeWork had its early target set on entrepreneurs in New York. By March 2016, WeWork had had 80 shared offices in more than 20 cities around the world, including such cities as New York, Boston, Philadelphia, Washington DC, Miami, Chicago, Austin, Berkeley, San Francisco, Los Angeles, Portland and Seattle in the United States, London in the United Kingdom, Amsterdam in the Netherlands and Tel Aviv in Israel. In July 2016, WeWork entered China, and now has more than 10 companies in Shanghai, Beijing, Shenzhen and other big cities. The corporate mission of WeWork is to “encourage members to create meaningful careers and lives, and help them to grow together in their careers and lives.” WeWork 19

Source: WeWork official website (https://www.wework.cn/what-is-wework?).

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is committed to helping members work efficiently and connect with each other for natural communication and collaboration. With more than 450,000 members in 485 locations in more than 100 cities in 28 countries, WeWork increased its revenue from $75 million in 2014 to $1.8 billion in 2018. The company had 12,000 employees in 2019 and the number is still growing. WeWork was valued at $47 billion in the first half of 2019 and started an Initial Public Offering (IPO) process, which hampered by losses in 2018 and other factors has been put on hold for now, but WeWork remains the unicorn in co-working. In January 2019, WeWork announced that it would change its name to The We Company and that in the future it would consist of three distinct business lines: WeWork (work), WeLive (accommadation), and WeGrow (education). Similar to many sharing platforms, this sharing platform still relies on investment, and its shortterm liquidity is relatively limited, which is one of the main reasons for WeWork’s huge losses. In addition, WeWork faces major problems such as enterprise operation mode, internal management and competitive pressure. In the future, WeWork will try to explore as much viable business value as possible and upgrade from a single rental model to one that creates more revenue growth by providing different services. 2. The rapid growth of China’s office sharing enterprises By the end of September 2018, China had more than 300 office-sharing operator platforms with more than 6000 outlets, a total operating area of 12 million square meters, and two million workstations. It is expected that by 2020, the number of shared office spaces will have reached 5000, with a market volume of 231.5 billion yuan.20 Local enterprises represented by UrWork, Kr Space Co-working, Nash Work, Woo Space, Seroffice, etc., have gradually gained a foothold in China. Faced with the fierce competition in the office sharing industry, each office sharing enterprise has accelerated its expansion and sought to seize more market shares with the help of capital strength. Urwork, founded in April 2015, has the core business of providing the whole industrial chain services for innovative enterprises on the platform of shared space, and building a business social platform based on united communities. By the end of 2018, UrWork had attracted more than 6000 enterprises and more than 100,000 members to settle on its platform through space expansion, online and offline integration, industrial mergers and acquisitions and cooperation, with a total market valuation of 11 billion yuan.21 As of June 30, 2019, UrWork had covered first-line operations in 44 cities including first-tier and new first-tier cities of the Greater China region and Singapore and New York, with more than 200 co-working spaces.22 Similar to WeWork, UrWork also faces the problem of single profit model and increasingly fierce competition. Therefore, it has proposed some solutions, such as improving

20

Source: https://baike.baidu.com/tashuo/browse/content?id=ca30211268aa6241444629df&lem maId=19446223&fromLemmaModule=pcBottom. 21 Source: http://house.people.com.cn/n1/2018/0419/c164220-29937535.html. 22 Data source: UrWork official website (https://www.ucommune.com).

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its business income structure through diversification, transforming service features through intelligence, and expanding rental rate. Founded in Beijing in 2014, Krypton Space23 was originally intended to solve the difficulty of small and micro teams to find workspace. It was one of the first “innovative incubators” ratified by Zhongguancun Administrative Committee. In 2016, Kr Space Co-working set its development direction of office sharing, and in 2019, it proposed the new strategy of a “full-cycle enterprise office service provider”, upgrading itself to the business model of “integrated office service + new asset management”. At present, it has covered more than 11 cities such as Beijing and Shanghai, running more than 40 co-working communities, serving more than 3000 enterprises and more than 50,000 members. Different from WeWork and UrWork, which mainly provide shared spaces, Kr Space Co-working pays more attention to entrepreneurship incubation. Currently, it has supported more than 5 billion yuan worth of financing for entrepreneurial projects, with a total valuation of more than 30 billion yuan. In the future, Kr Space Co-working will, on the basis of space product planning capabilities, combine intelligent office system, big data analysis, refined asset operation management, and through integrated office services and new asset management methods, deeply cover the office and development needs of enterprises in all process. In summary, office sharing is a kind of sharing platform enterprise with relatively stable development and great potential among many sharing platforms at present. Its main advantages lie focally in higher flexibility, connections established with other entrepreneurs, easier access to partners or investment, and reduced office costs of small and micro enterprises. However, many shared offices are faced with privacy protection, lack of customization, noise interference and other problems, which should be avoided by office sharing platforms.

3.2 The Impact of the Development of Sharing Platforms on Urban Construction Whether it is ride sharing, accommodation sharing or office sharing, they all rely on the cutting-edge technology and high population density in the urban environment on the one hand, and on the other hand, they also provide more possibilities for the future urban development, with a profound impact on the urban construction in the Internet era. Urban construction planning usually needs to consider three core matters, namely, humanity, science and technology, and sustainability. While humanity reflects social laws, science and technology and sustainable development contain more economic laws. In the past, many public or quasi-public goods similar to shared products provided by the government had not developed because of insufficient technological support and industrial model innovation, so their influence was relatively 23

Data source: Krypton Space official website (https://www.krspace.cn/).

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limited. Today’s information technology supports the development of sharing platform, whose biggest advantage lies in reinvigorating idle resources at a lower cost, realizing resource conservation and environmental protection. At present, sharing platform is mainly based on the sharing of means of living and means of production. However, with the development of information technology, the sharing of cities will be realized in the end, that is, city sharing. From the perspective of space, city sharing will provide more public space for the city and realize the full integration of resources at the same time. For example, the supply of Grade A office buildings in Shanghai remains high, with 1.1 million square meters in the core business districts in 2017, a year-on-year increase of 57%, and 1.4 million square meters in the non-core business districts, a synchronous increase of 272%. At the same time, the vacancy rate is also rising. In 2017, the vacancy rate of Grade A office buildings in Shanghai reached 14.8%. In addition, because of the fierce competition among office buildings, rents continued to decline, and the booming development of office sharing has become the regulator of office destocking.24 The core of sharing economy is to share the resources and realize the separation between the ownership of resources and the right to utilize them. The effect of sharing economy platform on urban development is demonstrated in two aspects: the short-term impact of various sharing economy domains on urban functions and the long-term impact of sharing economy on urban spatial organization.

3.2.1 Short-Term Impact of Sharing Platform on Urban Construction At present, the form of sharing economy has produced obvious influence on each subsystem or function of urban development. For example, manufacturing sharing can make full use of idle production equipment, reduce enterprise cost, improve the utilization rate of industrial land, and change the proportion of urban land in the future. Accommodation sharing can reduce living costs, ease the pressure of living in firsttier cities, and prevent the brain drain caused by high housing prices. Office sharing can save resources, costs and land, and gradually transform in a centralized office organization model. Space sharing can improve the utilization of public space and enrich citizen activities to promote equal access to public services. Facility sharing can improve the utilization rate of equipment and reduce production and living costs. Bike sharing can save energy, reduce emissions, promote green travel, and solve the “last kilometer”, but it also raises some requirements for the organization of urban transportation. Car sharing can reduce the number of motor vehicles, while achieving energy conservation and emission reduction, reducing the cost of living and relieving traffic pressure.

24

Data source: Shanghai Municipal People’s Government Website (http://www.shanghai.gov.cn/ nw2/nw2314/nw2315/nw5827/u21aw1321951.html).

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It can be said that sharing economy has quietly changed our lives and brought many benefits to urban governance and social development, including at least the following six aspects in the short term. 1. Ride sharing can improve the utilization efficiency of limited urban transportation resources The most direct impact of ride sharing is to effectively alleviate traffic congestion in most cities. The congestion of urban main roads during morning and evening rush hours reflects the first scarcity of urban transportation resources. Whether it is Beijing, Shanghai or Shenzhen, the traffic congestion in the morning and evening rush hours is very serious, often with only one or two people riding in a five-seat private car. If people are willing to share their private cars, and users publish their travel information on the ride-sharing platform and use big data systems for real-time matching, then the traffic jam during rush hours will be greatly alleviated. According to the big data platform of Beijing TOGO, each shared car in Beijing is used on an average of 5.1 times a day, and the average driving distance is 20 km each time, which is more than four times that of ordinary private cars, greatly improving the efficiency of car use.25 There is often parking saturation in the busy sections of cities, which reflects the second scarcity of urban transportation resources. The solution to the parking problem is directly related to the reduction of private car use. It is always difficult to find a space in the parking lots of many shopping malls, hospitals, cinemas and residential areas in busy sections of cities. Especially with the continuous rise of average household vehicle ownership, the demand for urban parking spaces in the future will become greater. Many car owners often complain that the biggest problem they face when going to shopping malls, restaurants or hospitals is that it is difficult to park, and the phenomenon of waiting in line for a parking space is very common. If shared cars are used, they will be as convenient as taking a regular taxi, and passengers will be able to park at any time without worrying about finding a parking space. At the same time, fewer cars will be on the road, which will ease the problem of parking shortage. Therefore, shared mobility is a new economic solution to traffic congestion and parking difficulties. Similarly, other facilities in cities have the potential to break out of single functions. For example, many power stations at the end of a city could use real-time data from a shared platform to stagger office and residential peak power consumption, improve the operation efficiency of unit transformer, and reduce the land area of the substation within a reasonable power supply radius. Another example is city streetlamps. In addition to the lighting function, the lamp pole resources can be made full use of: when attached with other equipment, they can function as electric vehicle charging piles, micro base stations, security monitors, LED city information displays, streetlamp system guidance, urban noise and air quality detectors, and traffic flow monitors, etc. 25

Data source: www.southcn.com http://kb.southcn/content/201705/23/content_171328930.htm.

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2. Equipment sharing reduces duplicated construction of large urban facilities The waste of resources in urban construction in China is no rare sight in recent years. For example, from 2002 to 2006, five enterprises, China Mobile, China Telecom, China Unicom, China Netcom and China Tietong, invested 1233.5 billion yuan in infrastructure construction, creating the prominent problem of repeated investment, with generally a low network resource utilization rate and the communication utilization rate of only about 1/3. In accordance with the principles of effective utilization, resource saving, technical feasibility and reasonable burden, if telecommunication pipes, telecommunication poles, telecommunication towers and other telecommunication facilities are shared, the utilization rate of newly built towers will be greatly increased, with less land use and industrial investment than when the operators built their respective poles and towers. In order to solve this problem, China Tower Corporation, against the background of “Broadband China”, 4G construction and “Internet Plus”, jointly funded and established a large-scale comprehensive service enterprise of communication infrastructure with the three telecom operators in 2014, adhering to the concept of joint construction and sharing. Through the tower company, China Mobile, China Unicom and China Telecom, share mobile communication towers, base stations, etc., to achieve “one tower for two purposes”, “one tower for three purposes” and even “one tower for multiple purposes”. The telecom enterprises only need to load and install their antenna equipment on the towers that have been built, thus effectively avoiding the duplicated construction of towers, base stations, and saving land, electricity, steel and other resources. By the end of 2015, China Tower Corporation had undertaken a total of 584,000 tower construction demands and delivered 485,000 towers. The sharing rate of newly built towers increased to 75%, reducing tower construction by 265,000, as compared with the operators’ respective construction of communication base stations. Industrial investment was saved 50 billion yuan, and land occupation reduced by more than 13,000 mu (approx. 871 ha).26 With the increasingly standardized and mature operation of the tower company, GPS positioning, atmospheric environment monitoring, video monitoring and other related devices closely related to people’s livelihood may be applied on the towers in the future.27 3. Sharing model blurs the boundary between private goods and public goods Public goods in cities have always been provided by the government, which is determined by the non-exclusive and non-competitive nature of public goods. Compared with common goods, public goods can easily realize the full and continuous utilization of resources. However, private goods often face the waste of use value due to idle resources and discontinuous use. A household ladder, for example, after a painting is mounted with it, may sit around for a long time until its next use. As a result, the 26 27

Mu = 0.067 ha. Data source: Official website of China Tower Company (http://zgtt.dlzb.com).

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value of goods decreases gradually over time, just as clothes become obsolete or new alternatives appear. For durable goods, the emergence of sharing economy allows goods to last as long as possible, and at a price. Based on the concept of sharing economy, if individual ownership is replaced by collective ownership, it is not hard to imagine that even if the number of cars for travel, office spaces, resort hotels and a series of other things in society remain at the current level, they can still meet the consumption demand brought by the growing population. This will be especially true in many developing countries. 4. Sharing model improves employment intention and promotes economic development In the ride-sharing sector, 78% of drivers participate in “sharing” to enrich their careers or supplement their income. Research commissioned by Airbnb on the economic impact of sharing economy on New York City communities shows that more than 50% of the hosts on its platform are not traditional workers; they are mainly freelancers and early-stage entrepreneurs. This phenomenon is also particularly common in developing countries. Take India for example. Most housewives do not have more job opportunities than women in other countries, but the existence of sharing economy creates job opportunities for them. Sharing economy has supported many surplus labor force in traditional industries. For example, the Didi platform has created more than 30 million flexible employment opportunities for society. From June 2017 to June 2018, a total of 30.66 million people (including drivers of private cars, express cars, hitch cars and luxury cars, and car owners) are earning income from Didi’s platform, of which 6% were previously unemployed or jobless. Currently, China’s bike-sharing industry has created 100,000 jobs, 15,000–20,000 of which were contributed by Mobike (now Meituan) alone in 2018. 5. Sharing economy facilitates the formation of new space communities such as shared smart cities Sharing economy has gradually been integrated into urban governance. With the help of the Internet and other technological means, it has improved the efficiency of urban resource allocation, realized innovative exploration in low carbon, energy saving, ecological livability, convenient service, intelligence and efficiency, and injected new vitality into the traditional development model. One feature of sharing economy is the high degree of informatization. Before the emergence of sharing economy, buyers and sellers with individuals as the main body were limited due to the lack of channels to establish direct contact with each other, while the information platform provided by sharing economy has effectively reduced the obstacles to the flow of information. In some European and American countries, cities are beginning to develop into communities. Because the information displayed on the sharing platforms enables the trust between people to be spread through the Internet, people build trust online and then conduct transactions offline, thus reducing transaction risks. As people become more and familiar with the service or economic form, the threshold of trust

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between people is further lowered. Therefore, in the context of sharing economy, a new spatial community without regional, racial and gender restrictions has emerged. It is the existence of sharing economy that rebuilds the sense of community in the city. 6. Sharing model promotes the green and sustainable development of the city in the direction of energy conservation, environmental protection Sharing mode significantly reduces energy consumption and carbon emissions. In 2017 alone, shared bike users rode more than 29.947 billion km, reducing carbon emissions by more than 6.99 million tons. According to Mobike’s big data, the total distance of Mobike cycling in China has exceeded 2.5 billion km, equivalent to 3300 trips to the moon and back, with cumulative savings of 460 million liters of gasoline, reduced carbon emissions of 540,000 tons, equivalent to the carbon emissions of 170,000 cars a year and reduced emissions of 4.5 billion micrograms of PM2.28 It can be seen that the sharing platform has an important impact on the redistribution of urban resources and the change of urban governance.

3.2.2 Long-Term Impact of Sharing Platforms on Urban Construction Seen as a long-term trend, the development of sharing economy will bring more farreaching impacts on cities from the aspects of living and working style, economic and social organization, urban form structure and even spatial governance model, which are mainly reflected in the transformation of life style, urban structure and social class. 1. Lifestyle changes In terms of work organization, sharing economy can greatly reduce the requirements of enterprise allocation, promote the maximization of the value dominance of highlevel talents, and facilitate the vigorous development of entrepreneurial activities, through the transformation from the past organization mode with all kinds of talents and fully equipped to the one featuring “basic work + online guidance + equipment sharing”. In terms of working mode, white-collar workers will shift from the past “9 to 5” schedule to a holiday-work mode. With more disposable time and a more flexible time organization, this arrangement is conducive to the improvement of personal happiness. In terms of public services, the shift from the past resource dispersion to the mode of “online service + nearby service” helps break the monopoly of highend resources and promote the equalization of public services. In terms of daily necessities, such as houses and cars, sharing economy can reduce living pressure, change consumption structure, reduce migration costs and promote the free flow of population. 28

Source: Sina news (http://news.sina.com.cn/o/2018-02-03/doc-ifyremfz4417178.html).

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2. Transformation of urban structure In the past, when compiling urban land planning, designers focused more on threedimensional space and distributed various types of urban land according to the Code for Classification of Urban Land Use and Planning Standards of Development Land (GB50137-2016). In the sharing economy model, the nature of urban land use may be more flexible. In different time dimensions, urban land use can present different properties. For example, the sports venues on the premise of schools are classified as educational land, used as school sports facilities during the day, while at night, during holidays, and at the end of the week, they are entertainment and leisure land, places of relaxation and physical exercise for citizens. The time dimension here can be a day, a season, or even a year or more. 3. The shift of social class The development of sharing economy is conducive to solving such social problems as indifference and separation of social classes in the fast-paced development of urbanization. The concept of shared community, similar to the Danish common housing program, has emerged in China. Sharing behaviors in community public affairs and daily life will help to create a living atmosphere of harmony and rapport, and rebuild the acquaintance society in the city from the bottom up. In the Death and Life of Great American Cities, Jane Jacobs29 argues that diversity is in the nature of cities. Every city is unique, and only when there is a coherent long-term goal and a series of strategies can they achieve the best development, which of course also involves the coordinated management of the city, the need for a long-term infrastructure planning and development. With the maturity of sharing economy and the span from three dimensions to four dimensions, urban land use needs an elastic control more urgently. In the future, in the classification of urban land use, the definition of the nature of various types of land may only represent a kind of planning-oriented intention, and individual land can be compatible with other uses in addition to the main use, so as to allow some land mixed use within the four-dimensional scale. If the mode of land sharing and co-construction is adopted, it can not only enhance the vitality of the city, but also activate the limited land resources of cities and enhance the value of the land. Urban planners may not only focus on the single nature of land, but also create a comprehensive use of land from various aspects, e.g., urban construction. In the future, it is likely that the main impact of sharing on cities and human life will come from the sharing of information. On the one hand, the sharing of a lot of physical space is based on information. Anything from urban development, the form of new economy, to urban management and governance may be closely combined with information sharing. On the other hand, information also affects the allocation and use of material space. Nowadays, the flow of information is getting faster and faster and the main means for everyone to obtain information now is not classroom 29

Jane Jacobs (1916–2006) was a famous American urban planner and writer. Born in Scranton, Pennsylvania, she spent her early years as a journalist, stenographer and freelance writer before becoming assistant editor of the Architectural Forum in 1952.

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education or paper media, but new digital media. In this trend, information sharing is a virtual society, in which people communicate in a virtual space. The function of sharing is to reduce the increment and revitalize the stock. When it is applied to urban construction and urban planning, the key point is to make use of the concept of open stock planning. With the increasing popularity of virtual space and virtual society, the demand for interpersonal communication will increase, and various types of urban public space will become more and more important.

3.2.3 Mechanism Function of Sharing Platforms on the Construction of Some Tourist Cities In tourism-oriented cities, the development of sharing economy will afford visitors the opportunity to have a unique and non-traditional travel and accommodating experience. Airbnb, the classic sharing economy platform, enables travelers to find suitable accommodation in cities where they stay for a short time. Therefore, the construction of sharing platforms will improve the construction mechanism of tourist cities from various aspects. The following takes the sharing platform as an example in some tourist cities. 1. Milan, Italy Italy’s tourism industry is a very important sector. Traditionally viewed as a commercial and shopping capital, Milan in its current city brand reengineering endeavor hopes to have a long-term infrastructure construction plan, in order to change the tourist city skyline. In terms of public planning, Milan has built more public spaces to promote the development of tourism. But because the government is running short of resources, it is trying to work with the private sector to develop Milan’s shared public Spaces. 2. Jakarta, Indonesia The development of sharing economy in Indonesia, especially in Jakarta, is characterized mainly by its reliance on e-commerce, as the utilization rate of mobile phones and the Internet has increased rapidly in recent years, providing opportunities for the development of sharing economy platforms. In 2014, the Jakarta Tourism and Landscape Management Department launched the Smart Jakarta City Project, which uses more information and communication tools to make efficient use of the city’s public resources and offer solutions to some problems, including pollution, sustainable development, but also to use this platform to encourage citizens to start their own businesses, especially in sharing economy. They hope to promote Jakarta as a green tourist city in this way.

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3. Barcelona, Spain Mr. Carles, director of Tourism of Barcelona, believed that sharing economy has two aspects, just like classical music, which can be said to have a positive side and a negative side. The positive side is that it can provide more high-quality improvements, bring more competition, improve traditional tourism operations, and bring new possibilities and new experiences. But just as there are people who don’t like classical music, sharing economy prone to lack of control is faced with such challenges as crowded transportation and hotel accommodation, and lack of other capabilities. 4. Buenos Aires, Argentina Gonzalo Robredo, head of the Tourism Bureau of Buenos Aires, Argentina’s largest city, believed that the city’s tourism should provide the right location, a place to further deepen the exchange between tourists and the locals. If you think about the sharing economy trend, it is not just about infrastructure or transportation; it is about sharing knowledge, passing on and sharing passion, which will have a big impact on the landscape and the overall change in cities in the years to come. What the government is beginning to provide is a context and an environment that helps visitors to realize that they are no longer traveling in the way they used to, with various experiences pieced together, but that they can learn more about the local culture with emotional resonance evoked in them. 5. Luoyang, China As a major city of cultural relics and of leisure, integrating tourism and agriculture, Luoyang is positioned as a famous international cultural and tourist city. Wei Xianfeng, deputy mayor of Luoyang, believed that through sharing platform, the reciprocal integration of urban elements can be realized, and that holistic tourism can be developed not only from the physical space, but also from other aspects such as the management of leaders, policy support, people’s awareness, tourism and sports, tourism and cultural relics and other aspects. From the perspective of its mechanism in the development of tourist cities discussed above, sharing economy mainly includes sharing of public areas of tourist cities, integration of urban tourism resources, sharing of infrastructure and so on. Both Airbnb and Uber have developed vigorously in many tourist cities, especially the home accommodation platform Airbnb. However, Airbnb is also the most subject to resistance from traditional enterprises and restrictions from city governments in these cities.

References Botsman, R. and Rogers R. (2010) What’s Mine Is Yours: The Rise of Collaborative Consumption. Harper Business, New York. Gou, Z. A preliminary study on government regulation of sharing Economy in the United States [J]. Forum of Administrative Science, 2017 (10): 58–62.

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Li Jiaying李佳颖. Connotation, model of sharing economy and countermeasures of innovative regulation. Reform of Economic System, 2017 (6): 27–31. MAO, X. Tax Regulations of Part-time Income under the Sharing Economy: Discussion on French Sharing Economy Tax Act [J]. Local Finance Research (in Chinese), 2018 (7): 36–42. Wang P, Tian T. On the tax collection and administration under the "sharing economy" model of our country [J]. China’s Collective Economy (in Chinese), 2018 (31): 110–111. Wu Ang吴昂. Environmental risks and regulatory response of sharing economy. Academic Exchange, 2018 (2): 112–119. Yang Jinliang杨金亮, Chen Yizhong陈义忠, Kong Weibin孔维斌. The impact of sharing economy on tax revenue and tax response. Tax Research, 2017 (5): 46–50.

Chapter 4

The Governance Experience of Urban Sharing Economy Platforms in China and Other Countries

Through the analyses in previous chapters, it can be seen that sharing platforms under certain conditions can indeed improve transaction efficiency, boost economic development, provide employment opportunities, and promote resource conservation and environmental protection. From this chapter, we will focus on the governance problems encountered by sharing platforms, the existing governance experience, the self-governance of sharing platforms and the collaborative governance with the government. Modern sharing economy model originated in developed countries. The United States, European countries, South Korea and Japan have successively introduced regulations and policies on sharing economy, providing historical and foreign experience for the development and innovation of China’s sharing economy model, with 2018 as the key year for the legalization and standardization of the governance of sharing economy in China. This chapter intends to sort out and summarize the problems and governance experience encountered in the development process of sharing economy to provide experience reference for the multi-dimensional collaborative governance proposed thereinafter.

4.1 Common Problems in the Governance of Urban Sharing Platforms The core problem created by sharing platforms for urban construction is how the existing legal framework and governance approach can be applied to this new economic model, specifically involving consumer protection, responsibility, labor law and taxation.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_4

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1. The relatively prominent contradiction between security and innovation Sharing economy is essentially a gig economy, one that consists of underemployed freelancers and uses the Internet and mobile technology to quickly match supply and demand. Unlike participants in traditional industries, those in sharing economy have always been in a gray zone between business and individuals, and between public and individuals, which leads to the contradiction between security and innovation. From the perspective of security, service providers cannot enjoy the same rights as ordinary professional workers, such as personal safety, minimum wage and maximum working hours, guaranteed by the Employment Law and Labor Law, making them vulnerable groups. Once infringes on their personal interests or other problems occur on the platform, they always find it difficult to cite testimony and find applicable laws and regulations to protect their rights and interests. From the perspective of innovation, if the regulation provisions for full-time or professional service providers are imposed on non-professional participants in sharing economy, its entry threshold will be raised, the grassroots innovation weakened, the boundaries of enterprises re-expanded, and the flexibility of sharing reduced. Therefore, the legal provisions and systems established in the traditional market to ensure security and fairness cannot be effectively applied to such informal and highly open participatory economy as sharing economy. Whether the “individual” in sharing economy should be defined as an employee or a self-employed person has been the subject of repeated and widespread debate. For example, the providers of hitch services and shared kitchens in the United States are not dedicated drivers and cooks; registered Uber and Lyft drivers put in services of less than 15 h a week based on the sharing platform; only one fifth of Easee users (e.g. Etsy, a handmade trading network) see it as their full-time job.1 If it is mandatory to obtain a chef’s license and a for-profit driver’s license for the provision of shared services, it will greatly reduce the willingness and enthusiasm of such shared service providers. The providers of services and goods in sharing economy differ from employees of traditional enterprises, thereby directly impacting the government’s regulatory framework for sharing economy. 2. The more prominent contradiction between old and new industrial organizations Although the services provided by sharing platforms bring convenience and efficiency to many people, the social conflict caused by it is not uncommon in various countries. Seen from the competition between sharing economy and traditional industries in terms of industrial organization, sharing platforms exert a disruptive impact on industrial organizations by greatly lowering the threshold for entering a certain industrial field, which not only brings excessive competition within the sharing economy industry, but also is unfair to practitioners in traditional industries. This difference in 1

“Sharing Economy Governance: Historical mirror and foreign experience,” Xinhua, May 17, 2017.

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industry entry is the primary source of unfair competition. That is why several cities in the United States and Europe have seen frequent protests by professional taxi drivers against ride-sharing companies such as Uber, raising questions about whether society as a whole is benefiting from sharing economy or just some people. For example, French taxi drivers believed that Uber would threaten their economic benefits, so labor unions organized protest demonstrations, and blocked the main roads from the two main airports of Paris to the city. When Uber cars passed the checkpoints, they would be treated with stone throwing, paint brushing and other destructive behaviors. Some cars even had their rear windows broken and tires damaged. As far as sharing platforms are concerned, unfair competition is reflected not only in the entry threshold, but also in ineffective taxation. Since many sharing platforms have not been regulated by legislation, traditional industries believe that they have been evading tax regulation, but the government turns a blind eye to this. Wang and Tian (2018) pointed out that the tax problems faced by the business model of sharing economy include the difficulty in determining tax subjects, vague tax objects and difficulty in determining tax rates. The fund flow of sharing platforms involves the platform, the supplier, the user, etc., so it is not clear whether all of them should be regarded as taxpayers. Besides, the diversity of sharing transaction itself, the complexity of the business and the variability of the activities all create some difficulties in determining taxpayers. In addition, environment is one of the key issues facing the government. 3. The difficulty in the control of externalities by shared transactions In addition to the conflict between participants in sharing economy and traditional workers in the society, traders in sharing economy will also have different impacts on others who do not participate in the transaction. This is mainly because both parties do not usually consider the externalities of the exchange when entering the transaction. Positive externalities may be manifested in that tourists are attracted by the diversity and convenience of the shared housing available in the locality, which brings additional tourists to the local tourist attractions, restaurants and other consumption places and drives the development of the local tourism industry, such as the homestay tourism in Moganshan, Huzhou, Zhejiang Province. But more external effects may be negative, as in the case of noisy short-term tenants in shared accommodation in an apartment building who may impose the cost of annoying behaviors on other residents. Since sharing economy is essentially a stranger economy, the current sharing spirit of both the supply and the demand is insufficient and the sense of self-interest is still dominant, so it is easy to fall into a moral dilemma, resulting in disorderly behaviors of the supply and demand in the stranger economy, exemplified by such incidents as online ride-sharing drivers’ endangering the personal safety of passengers, and shared bike consumers’ illegal riding, disorderly parking and damage of bicycles. These negative external costs are very great, and the platform is difficult to control and coordinate, which seriously affects the life of citizens, the work of urban management departments and the appearance of cities.

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4. The inreased difficulty in government governance caused by information asymmetry Information asymmetry will be encountered in any field of government governance. Sharing economy mainly solves the problem of insufficient allocation of economic resources, and the key reason for this problem is information asymmetry, including supply and demand information, product quality information, consumption behavior information, etc. Although the existing sharing economy platform has reduced the mismatch of supply and demand information to a large extent through information distribution and deal making, it is still unable to achieve complete transparency on product quality and usage information. Different forms of sharing economy usually have the problem of information asymmetry. For example, homeowners who rent out their idle houses for a short time know more about their houses than tenants, who know more about their own credit and other information than homeowners. Different forms of information asymmetry make both sides of the transaction unable to fully trust the quality of the transaction, which may eventually lead to a lower market trading volume than the optimal level of society and create an “adverse selection” phenomenon. In this case, high-quality traders will be less willing to participate in the transaction. As a result, the essence of efficient use of idle resources in sharing economy will not be realized, and the problem of “bad money driving out good money” will re-emerge. Therefore, if technology can be used to track product quality and user behavior in real time, the “black box” problem of this kind will be effectively solved. At present, the vehicle information provided by the short-term rental platform and the usage behavior of users cannot be effectively supervised. If the various layout sensors in the vehicle are networked, the vehicle data sharing mechanism will be realized, and the initial condition and usage of the vehicle can be tracked more transparently, thus minimizing the risk of this sharing model. Technology is the key to solving the pain point of information asymmetry management in sharing economy.

4.2 The Governance Experience of Sharing Economy Platforms in Some American Cities Sharing economy has been around for a long time in the United States. This economic form out and developed rapidly right after the economic crisis in 2009, mainly due to declining family income, the penetration of technology in daily life, and the need for resources and sustainable lifestyles. To some extent, the emergence of sharing economy negates the consumerism that developed countries have been pursuing. The economic recession in 2008 made people more aware of the reality of their society and began to seek and adapt to a new way of life. With the development of sharing economy in developed countries, two new economic trends have gradually attracted people’s attention: first, the pursuit of the right to use assets is greater than the ownership; Second, consumption is not limited to physical goods and services,

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but involves more time, space and skills. It is worth noting that although the term “sharing economy” is widely used in various fields, only 27% of Americans have heard of it, according to a 2015 Pew Research Center survey.2 The US Trade Commission has stuck to the tenor of sharing economy - regulating new business models in a way that does not impede innovation but protects consumers. For example, the government of California set up a Transportation Network Corporation (TNC) to manage Uber, Lyft and other companies. Th entry threshold is lower than that of traditional taxis, but the TNC platform is required to be responsible for the vehicles with strict regulations on service safety. A survey of relevant laws of the United States reveals two main directions of governance as follows. (1) Establishing the legitimacy of sharing economy The legislation and supervision of sharing economy in the United States is locally based. In shared travel, 17 city councils and four states in the United States passed city ordinances in 2014 to legalize ride sharing. In August 2015, the number of cities and states that legalized ride sharing increased to 54. Three states—California, Oregon and Washington—have passed car-sharing laws, placing responsibility squarely on car-sharing service companies and insurance companies, and prohibiting insurance companies from canceling policies for car owners. (2) Strengthening the protection of the rights and interests of consumers and practitioners The legal system in the United States stipulates the rights and obligations of credit investigation agencies, credit information providers and personal information subjects in credit investigation activities. To avoid risks, California legislation requires transportation sharing economy platforms to purchase insurance for each event, with a guarantee amount of at least 1 million dollars, and to provide drivers with personal and commercial insurance. Similarly, the Australian Labor Party requires sharing economy enterprises to set up appropriate insurance policies to reduce the risks of customers and third parties and establish cooperative relationships with insurance departments. These are two typical incentives. What follows next is an analysis of the restrictive governance of shared platforms in some US states and cities.

4.2.1 Restrictions on Airbnb Access in New York State In October 2016, the governor of New York signed a law that would severely regulate the business model of online short-term rental platform Airbnb, leaving the online platform company facing significant restrictions on its operation in the state. Previously, the state had stipulated that residents are not allowed to rent out homes or 2

The Changing Digital Landscape—State of the News Media 2015, Pew Research Center.

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bedrooms for less than 30 days, noting that even advertising such illegal rentals is prohibited under New York law. After the legislation goes into effect, hosts who continue to advertise short-term stays (rentals of less than 30 days) through Airbnb will face fines of $1000 for first-time offenders, $5000 for second-time offenders and $7500 for third-time offenders. The new law means that Airbnb has lost most of its short-term customers in New York and has no way to bypass the state law simply by advertising short-term rentals. According to disclosures that accompanied the New York state order, about 300,000 Airbnb rentals were found to have violated state law between 2010 and 2014. Those rentals ultimately netted hosts more than $300 million, of which about $40 million went to Airbnb. Airbnb faces the same problem in most cities around the world. The company, which is less than 10 years old, has grown so fast that it has gone public with an initial public offering. But in the process of development, the company has become increasingly conflicted with local residents and governments. One of the causes of the conflict is that many city dwellers offer their homes to young tourists, as a result of which some neighborhoods are much “livelier” than they used to be. Many local residents, unhappy that a quiet neighborhood had suddenly become populated by hordes of boisterous, party-loving youths, have begun pressing the state government to address similar problems. Another problem for Airbnb is that its cheap and flexible rental model has hurt traditional hotels in some tourist cities, who need to apply for a license and comply with the governing regulations. Airbnb’s short-term rentals can be cheaper because they bypass a lot of regulations, which creates an unfair competition for hoteliers. Talking about the Airbnb case, New York Assemblywoman Linda Rosenthal said that she represented the interests of the people of New York, not the tourists, and avowed to protect all long-term tenants who meet the requirements and not to hurt the people of New York to make sure that tourists can rent cheap apartments in the city for a short time. It can be found that New York State’s restrictions on Airbnb access are mainly aimed at controlling the unfair competition and negative externalities brought by shared accommodation.

4.2.2 Tax Controls of Airbnb in Los Angeles In contrast to New York State’s direct restrictions on access, Los Angeles reached an agreement with Airbnb to pay the hotel tax, which will come from Airbnb hosts in Los Angeles, as of August 2016. The tax paid to the city is expected to reach $23 million annually. Tax evasion has always been the biggest pain point for gig economy attacked by traditional economy, and one of the manifestations of sharing economy in the “gray zone”. The city’s tax measures not only allow Los Angeles to benefit from sharing economy, but also enable middle-class landlords who share their homes to meet local tax requirements. However, the huge amount of tax revenue

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and custom flow will also make it difficult for the local government of Los Angeles to track whether the tax has been paid. Airbnb’s payment of hotel taxes to the Los Angeles government reflects the special relationship between startup sharing economies and local lawmakers and is a sign that sharing platform companies and governments can work together. Companies such as Airbnb and Uber that want to disrupt the existing industrial order, such as hotels and taxis, often fall out with regulators and policymakers. That’s why we see so many lawsuits between companies like Uber and Airbnb and governments around the world. Most sharing companies don’t really hate the rules but the ones that prevent them from doing business the way they like, so paying taxes could be a good prelude to Airbnb’s intention to develop a good partnership with cities, which might reciprocate. In addition to Los Angeles, Airbnb has been paying annual hotel taxes to other US cities since 2017, such as Austin ($7 m), Boston ($3 m), Nashville ($3 m) and Denver ($2 m). According to Airbnb’s official statistics, the company paid a total of more than $85 million in hotel taxes in more than 200 cities in 2017 alone.3 It can be found that the tax regulation of Airbnb in Los Angeles and other cities mainly stems from the tax evasion caused by the scattered economic characteristics of sharing platforms.

4.2.3 Restrictions on Uber Access at Airports in Other Cities In May 2016, the mayor of Newark banned Uber from operating at Newark. International Airport, claiming that Uber was operating without a license and in violation of city regulations. Similar airport bans have occurred in Washington, Los Angeles, San Francisco, and Boston. Uber’s solution has been to settle out of court with local governments in some US cities for an additional fee. For example, in the face of lawsuits from San Francisco and Los Angeles, Uber agreed to a $10 million settlement to subsidize Uber drivers in exchange for legal operations at 11 airports in California. At Los Angeles. Airport, Uber drivers must pay a $4 processing fee; The handling fee at Boston Airport is $8.75; Uber drivers in San Francisco pay $90 a year to qualify. The most controversial ban at Newark International Airport ended with a settlement between Uber and the mayor in which Uber would pay the city $1 million a year for 10 years in exchange for a license to operate. This kind of airport ban of access restriction is mainly due to the safety and legality of Uber car-sharing platform. In fact, Uber has very high safety requirements for drivers, including: (1) Hiring a third-party background review company to verify drivers’ qualifications; (2) Driver Screening; (3) Deactivation Policy, including permanent deactivation of drivers who are violent, drink driving or refuse to drive due to skin color or gender. At the government level, 22 jurisdictions of states and 3

Airbnb (https://zh.airbnb.com).

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districts across the United States have passed smarter and more modern regulations for the ride-sharing industry to ensure that Uber and other platforms can continue to provide safe and reliable rides for passengers and reasonable benefits and security for drivers while providing jobs. Meanwhile, the Labor Department is still weighing whether the driver status is legal and whether Uber deprives drivers of benefits and protections as employees.

4.2.4 The General Attitude to Governance of the US Government Federal, state and other local governments in the United States have maintained a constant focus on sharing economy, with both Jeb Bush and Hillary Clinton, for example, including the issue in their 2015 presidential campaigns. Jeb Bush, a Republican, personally rode Uber to show his support for the innovative economy. However, Hillary Clinton, referring to the sharing economy in her economic plan, said that this emerging economy was fostering economic prosperity and innovation, but it also raised questions about job opportunities and job security.4 The US government has two opposite positions on the growing governance of sharing platforms (Gou 2017). Conservatives believe that sharing platforms undermine existing competition regulations, hurt traditional enterprises in transportation, accommodation, and other related industries, and will have a negative impact on the rights and interests of consumers and workers. Tax collection should be strengthened, and the personal safety and property safety of workers and consumers should be protected. Liberals, by contrast, argue that the embedded automation system in every shared enterprise is more efficient and cheaper than government regulation, and that excessive regulation will hinder the growth of this emerging market because innovation is an opportunity for economic growth and even a revolution to reach a higher level of economy.

4.3 The Governance Experience of Some European Cities 4.3.1 Introduction of EU Sharing Economy Guidelines In September 2013, the European Economic and Social Committee (EESC) held a public hearing to discuss the importance of the emerging business model of sharing economy for the EU and released a report called Collaborative or participatory consumption, a sustainability model for the twenty-first century. The hearing led 4

Rogers Kitt, Hillary Clinton calling attention to sharing economy: more than a third of Americans are freelance [EB/ OL]. (2015 07 13) [2017 06 28]. (http://www.cnb.com/2015/07/13/in-economyaddress-hillar-clinton-calls-out-gigeconomy.html).

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to the creation of the European Sharing Economy Coalition, an industry body for sharing economy, on the EESC’s initiative. The Coalition was designed to combine forces and speak with one voice, promoting sharing economy policies at the EU and member levels. In 2015, the EU greatly accelerated the process of legislation on sharing economy. In September 2015, the European Commission launched a public consultation with sharing economy included, hoping to strike a balance between protecting innovation, fair competition and protecting consumers. In December 2015, the controversy over sharing economy at the EU level was finally settled. The European Parliament issued a position paper on digital market strategy, which strongly supports the development of sharing economy. Although the document was hotly debated by national parliamentarians, sharing economy won all-party support in the European Parliament. The position paper states that sharing economy has promoted business competition and consumer welfare and created more job opportunities. The European Parliament urges the European Commission and member countries to re-examine whether existing regulations and policies have hindered sharing economy and proposes to gradually remove legal and policy barriers to further promote its development. In January 2016, in response to the European Parliament document, the European Commission published a report announcing that in March 2016, the European Commission would publish a European Agenda for the Collaborative Economy, which would focus on how to promote sharing economy more uniformly across the EU, taking into account the different interests of member countries. The main thrust of the guide is reflected in the following aspects. (1) In terms of market access, first, when the sharing economy platform itself does not provide services but only acts as an information intermediary, it should not be set access requirements or other thresholds. Second, generally, service providers should not be imposed with access obligations such as business approval, licensing, unless these restrictions are absolutely necessary to meet the relevant public interest purposes. Thirdly, absolute bans of sharing economy business should only be a measure of last resort. Fourthly, occupational service providers should be treated differently from individual citizens who temporarily provide services, and no duty of access or other restrictions should be imposed on the latter. (2) In terms of responsibility, sharing economy platforms, purely as information intermediaries, can enjoy “safe harbor” and not take responsibility for illegal acts that they do not know or take timely measures after their knowledge. (3) In terms of consumer protection, it is necessary to provide consumers with a higher degree of protection while not imposing excessive obligations on individual citizens who temporarily provide services. (4) In terms of labor relations, the criteria for determining whether an individual is an employee of the platform mainly include whether there is a subordinate relationship between the individual and the platform, nature of the work and remuneration.

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(5) Sharing economy service providers and platforms need to pay taxes, including individual income tax, corporate income tax, value-added tax, etc., which requires close cooperation between sharing economy platforms and regulatory agencies. Through the release of this guiding agenda, European regulators are required to reduce the restrictions on startup companies in the sharing field. From this, it can be seen that the development road of sharing economy in Europe has a relatively clear direction, but the rules on access and tax policies are not specific enough.

4.3.2 Incentives for House and Car Sharing in London, UK Although most European countries have repeatedly stressed the need to support sharing economy, the reality is that the degree of acceptance of it varies from place to place. London, for example, is far more tolerant than other regions. According to the Daily Mail, the UK is home to a tenth of the world’s sharing economy businesses, more than France, Spain and Germany combined. In May 2015, London eased a 40year-old law to allow people to rent out their homes for shorter periods of time with a tax relief, in an effort to further boost its sharing economy. As for sharing platforms, liberal economists in London insist that any economic defects in digital and high-tech markets should be solved by the natural attribute of the rapidly developing market, viz Self-regulation (or self-governance, the focus of the later part of this book). For example, instead of creating separate regulations, the London government incorporated ride hailing into the Private Hire Vehicles (London) Act of 1998, adopting a more open policy and government regulatory platform to rein in drivers. In addition to London, two pilot cities of sharing economy were designated in the UK in 2015–2016, namely Leeds and Greater Manchester, which focused on supporting sharing trials in the areas of transport, accommodation, and social security. For example, Leeds established a network sharing platform to share assets and services, including idle space and equipment as well as residents’ specialties and skills. At the national level, the British government has opened the Disclosure and Barring Service to sharing economy platforms, promising to implement online inquiry and reduce the procedure and cost of inquiry. At the same time, sharing economy will be included in government procurement and the route of government assets participating in sharing economy will be explored. In addition, the UK Government supports insurers in developing insurance services suitable for sharing economy and welcomes the publication of the world’s first guidelines on sharing economy insurance by the Association of British Insurers. It seems that the UK is a country with a relatively open attitude towards sharing economy.

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4.3.3 Incentives and Restrictions for Car Sharing in Paris, France In 2009, the city of Paris launched a self-service car program. After nearly two years of preparation, Autolib started to build stations and charging piles in the summer of 2011, to build a rental network in the greater Paris area, and to produce electric vehicles “Blue cars”, and to establish a reception management center in Paris. The project was officially launched at the end of 2011, with a total investment of 215 million euros. By 2015, the project had 4000 electric vehicles, 1100 stations and 6300 charging posts in the greater Paris area, with more than 320,000 users, of whom more than 140,000 were active, with one person renting the Little Blue car every five seconds on average. It is estimated that the car has traveled 165 million kilometers and can circle the Earth 4000 times. With 4 million residents and 7 million potential customers, and some 25 million visitors to the greater Paris region each year, the potential for a shared electric vehicle service is huge. After the success of the Paris operation, self-service cars in some other cities in France have been put into use, and the number of users in Lyon is even growing faster than in Paris.5 The electric car-sharing service had been billed as the ideal solution for urban mobility in Paris and was briefly a model to be emulated around the world. However, data from 2016 showed that while the number of registered users of self-service vehicles increased, their use actually declined. Only 5.8 million trips were made in 2016, down from 6.2 million in 2015. Some analysis points out that as the user base increases, the number of Blue cars does not increase proportionately, and it becomes more and more difficult for users to find a self-service car available. In addition, the development of online ride-hailing services such as Uber is also competing with self-service cars. All these have resulted in the current situation of imbalance of payments and profit difficulties of self-service car companies. Some predict that the service, which has left the city in debt of millions of euros, will be closed in less than 10 years.6 Different from the completely commercial operation in other cities, car-sharing in Paris is promoted by the government, which is also the reason why the government bears the main loss at present. The mode of long-term low price and asset-heavy operation makes car-sharing in Paris difficult to continue, and the contract is terminated in advance. In addition, France passed the Sharing Economy Tax Act in 2017, with three legislative purposes: first, to simplify taxpayer declaration; the second is to promote the standardization of tax law and social field unity; third, to ensure fairness among taxpayers and prevent unfair competition. Compared with the original general tax law in France, the main additions include the establishment of an income tax system for individuals in sharing economy to obtain non-wage income through online platforms, and the establishment of a simple and uniform standard to distinguish ordinary 5 6

http://www.hqrw.cn/2017/0710/66249.shtml. http://www.cheyun.com/content/22102.

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individuals from professional practitioners on online platforms. People earning an annual non-wage income of less than 3000 euros are identified as ordinary individuals, while those earning more than 3000 euros are professional employees (Mao 2018). It can be seen that France is one of the countries with an early start in sharing economy, and the Blue cars in Paris are also one of the pioneers of car-sharing. Although it develops rapidly, it also faces common problems such as losses. The experience in urban governance is mainly to promote fair competition among industries through taxation.

4.3.4 The Ban on Uber Access in Rome, Italy On April 8, 2017, a court in Rome, Italy announced an injunction against Uber app, covering three categories of Uber products, namely Uber Black, Uber Pop and UberX. The court in Rome ordered all three Uber products to cease operation within 10 days. At the same time, sales promotion activities will be suspended, and failure to do this on time will face a fine of 100,000 euros per day. The decision to expel Uber from Italy was initiated by the taxi union. As early as January 2016, traditional taxi drivers in Italy went on strike in Rome, Milan, Florence, Naples and other cities, claiming that Uber was stealing market share and interfering with fair competition in the market. The decision not only banned Uber from operating private cars in Italy, but also any form of advertising in the country. The court in Rome banned the APP on the same grounds that Uber was causing unfair competition in the traditional taxi industry, so the court upheld the taxi union’s complaint in its ruling. The biggest conflict between Rome taxis and Uber is that the business model of the former contradicts that of the latter. According to Italy’s taxi regulations, it costs thousands of euros for a taxi driver to get a business license, but employment with Uber doesn’t cost anything. It only needs more than three years of driving experience, and anyone who owns a vehicle of no more than seven years can register as a driver. From a price point of view, taxis in Rome need to be called by phone or hailed in a special area rather than waved to a stop, with an extra charge on luggage. Compared with such a model, Uber obviously has a great cost advantage. Moreover, the low threshold for drivers greatly increases the number of vehicles available. All this easily causes a huge impact on the original market. In 2015, a court in Milan also ordered a ban on Uber’s mobile app over concerns that unlicensed drivers could provide rides. From 2015 to 2017, Italian courts explicitly ruled against Uber four times for unfair competition and disrupting the order of the entire traditional public transport market. Although Uber later appealed to overturn the ban on some Uber app features, it has adversely affected the use of sharing platforms in many Italian cities.

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4.3.5 Restrictions on Airbnb Access in Berlin, Germany As in New York, Airbnb is facing similar troubles in Berlin, Germany. In May 2016, a new law came into effect in the city, requiring that homeowners cannot change without permission the nature of their homes into holiday apartments. All landlords who rent out more than 50% of the area of their homes for less than two months will be fined 110,000 euros once found. Airbnb had been hoping the city government would ease up on the requirement, but it still withdrawn tens of thousands of listings that were already available. Berlin’s policy is based on two main considerations. One is the negative externality brought by short-term rent, for example, children among the passengers will be very noisy, or young people will organize parties in the room, causing disturbance to the original residents. Second, Berlin is facing a serious shortage of housing. Against this background, such short-term rental behavior undoubtedly exacerbates the tightness of the housing market. Many homeowners are not willing to rent their apartments as ordinary houses to ordinary citizens; they would rather rent them to travelers as short-term or holiday homes for more profits—the rent of a few days or a week equals that of a month on ordinary occasions. Therefore, the Berlin city government must take measures to deal with the current situation. Germany has always emphasized the need for a considerable degree of fairness in resource allocation and social welfare and opposed the American-style laissez-faire capitalism. The logic behind Berlin’s decision also includes the fact that the lucrative online short-term rental of these homes discourages owners from long-term renting to those who don’t have much money but really need them, thus creating social inequality.

4.4 The Governance Experience of Some Asian Cities 4.4.1 Deregulation of Sharing Platforms in Seoul, South Korea Compared with the United Kingdom and the United States, South Korea started late in sharing economy. It was only with the entry of foreign enterprises that the whole society began to consider and explore the model of sharing economy. However, as a latecomer, South Korea is by no means inferior in this field. The main institutional reason is the South Korean government’s innovative regulatory approach to sharing economy platforms. In 2016, Seoul established the Sharing Economy Hub Network (http://sharehub.kr). Run under the auspices of the Seoul Metropolitan Government, the hub divides registered enterprises into 12 categories according to their operating targets: education, books, goods, photos, video and music, homestay, travel, art, clothing, motor vehicles, experience and knowledge, and space. Some companies engage in only one of the above types of sharing economy business operations, while

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others are involved in multiple types. In addition to sharings in goods, accommodation, vehicles, and knowledge that are easy for people to understand, South Korea’s sharing economy also covers services that take time as shared goods. For example, Zipbob service is an Internet platform based on the concept of “social-dining”. It brings together people who share the same interests through the Internet, allowing them to discuss and organize meals on their own. Users who want to participate in a meal just need to open the Zipbob Web page, browse and decide which meal to attend. There are two methods of payment: upfront or on-site, depending on the size of the meal. Zipbob signs an agreement with the registered restaurant and takes a certain percentage of the meal revenue. Most of the sharing platform companies in Korea are start-ups that were established after 2011. Sharings in cars, accommodation and second-hand trading are the three most prominent sectors. The fastest growing companies are concentrated in car sharing, led by SoCar and GreenCar, which offer sharing services through partnerships between the Seoul and Suwon city governments and private entrepreneurs. The South Korean government generally adopts an open attitude of encouraging free private sharing enterprises at home. However, in supervision, the South Korean government is not tolerant of Uber and Airbnb, two typical enterprises of sharing economy, which have been successively fined by the Ministry of Land and Infrastructure of South Korea. In particular, Uber’s private car service and Airbnb’s ultrashort-term rental service have been deemed illegal, and Uber has faced collective resistance from the taxi industry associations and drivers’ associations in major cities, like Seoul.

4.4.2 Standardized Governance of House Sharing in Tokyo, Japan On January 29, 2016, the Tokyo municipal government officially began to accept the qualification registration of short-term house rental service through sharing economy platforms such as Airbnb, marking the first management practice of short-term rental in Japan. According to official statistics from Airbnb, house sharing is growing rapidly in Japan, with Tokyo being the world’s largest house sharing market in 2017. But after the Residential Rental Business Law was introduced at the end of 2017, many Airbnb listings that did not comply with the regulations were forced to be withdrawn. According to Japanese media Nikkei, there were 62,000 Airbnb listings in Japan in the spring of 2018, but only 724 hosts had registered as of May 11, according to the Japan Tourism Agency. House sharing in Japan has become increasingly restricted. According to the Residential Rental Business Law, Airbnb platform houses should not be rented for less than 7–10 days at a time, or more than 180 days a year, and not operate on weekends. As a result, residential areas in most central areas of Tokyo

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cannot be rented out. With seventy to eighty percent of some residential areas in such districts as Ota-ku restricted, all private house sharing is illegal, and even traditional hotels are not allowed to operate. According to Asahi Shimbun, a local Japanese newspaper, many private apartments in Tokyo, Osaka, Kyoto and other major cities are secretly recruiting foreign tourists on the Internet. The Japanese government had planned to introduce a law to encourage short-term rental of private inns in order to make full use of uninhabited Japanese houses, hoping that foreigners could experience Japanese life after staying in Japanese homes for enhanced communication. However, this ideal has been torn apart by some local owners with motivation purely for investment, as well as many protests from the Japanese public. Some longtime residents decide to move out as a group because they can’t stand the constant presence of different strangers. Some people believe that the quiet and clean environment has been greatly changed after the tourists stay there, and many of the changes are negative, such as garbage piled up in front of the gate every day, people often drag their suitcases in and out at night, and talk loudly, so that the neighbors cannot have a normal rest. Brillia Mare Ariake, an upscale residential complex in Tokyo, for example, is jointly banning vacation rentals. A representative of residents living here said, “Hotels are for the public. We don’t want anyone else to live in our houses.” In contrast to the strong demand for short-term rental in cities, the frequent occurrence of negative externalities due to disputes over the legality of Airbnb has also been resisted by local residents. As a result, shared accommodation is subject to restrictive regulation by the governments of Tokyo and Osaka. In 2018, the Japanese government formulated the Implementation Rules of the New Home Stay Law and the Implementation Rules of Residential Rental Business Law of the Ministry of Land, Infrastructure and Transport, which on the one hand standardized the development of the home stay industry and on the other hand stimulated the local economic development.7 These two regulations were officially implemented on June 15, 2018. The former made specific regulations on the certification of homestay, the method of calculating the number of days of stay, the contents of declaration documents, the use of the guest list, the report of homestayers, etc. and other contents. The latter stipulated the necessary measures to ensure the safety of the residents and the registration requirements of homestay management companies and intermediary companies. For example, homestay intermediary companies must fully state the reporting number of homestay operators and lodging fee before signing a contract.

7

Official website of Ministry of Commerce of the People’s Republic of China (http://www.mof com.gov.cn/article/i/dxfw/cj/201711/20171102673695.shtml).

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4.4.3 Experience of Governing Airbnb Platform in Hong Kong As a special administrative region of China, Hong Kong enjoys a high degree of openness and gearing to international conventions. The relationship between the government of Hong Kong Special Administrative Region (Hong Kong SAR) of China and Airbnb is different from the supervisory relationship in other cities. It mainly negotiates with the government through press conferences to seek the best control plan. Airbnb generated more than HK $2.6 billion in revenue for Hong Kong in 2017.8 As in Rome and other cities, Airbnb has also suffered concerted resistance from the traditional hotel industry in Hong Kong. In April 2018, the Hong Kong Hotel Owners Association held a press conference and publicly criticized Airbnb for renting unlicensed accommodation on its platform, engaging in illegal business with the package of “sharing economy”, exploiting the legitimate rights and interests of the hotel industry, urging the Hong Kong SAR government to pass the Hotel Industry (Amendment) Bill as soon as possible to strengthen its deterrence against “unlicensed” homestay sharing. On the other hand, Airbnb cited data that 80% of the Airbnb listings in the world are located outside the scope of traditional hotels, indicating that home-sharing can bring diversified benefits. Therefore, it proposed several policy suggestions on homestay sharing to the government of Hong Kong SAR, including the registration requirements to provide important information to officials in Hong Kong SAR, enforcement of strict safety guidelines to ensure community safety, limiting the number of days the entire property resources can be rented, and simplifying the framework of hotel licensing. On May 9, 2018, Hong Kong Sharing Economy Alliance released a policy white paper titled How to Regulate the Short-term Homestay Market, which emphasizes what kind of sharing can really adapt to Hong Kong. If Hong Kong residents learn from the US individual subject model, do they have so many idle resources to offer? As a matter of fact, Hong Kong is relatively short of resources, e.g., of space and time, no idleness to speak of. If the subject model of mainland enterprises is followed with the aim to create flow inlet, then there must be a huge market. Obviously, this model is not easy for such a small territory as Hong Kong. However, although the personal resources of Hong Kong residents are difficult to exploit, the office resources gathered in the Central area of Hong Kong are extremely rich, with many idle meeting rooms. If the enthusiasm of the large enterprises to share can be aroused, a new sharing model will be formed unique to Hong Kong. As can be seen, the greatest concern of the government of Hong Kong SAR is mainly around the screening of suitable shared products.

8

Source: Thepaper.cn (http://www.sohu.com/a/231288093_260616).

References

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References Wang Ping王萍, Tian Tian田天. On the tax collection and administration under the “sharing economy” model of our country. China’s Collective Economy, 2018 (31): 110–111. Gou Zhanyu勾占宇. A preliminary study on government regulation of sharing economy in the United States. Forum of Administrative Science, 2017 (10): 58–62. Mao Xiaojun茅孝军. Tax regulations of part-time Income under the sharing economy: Discussion on French Sharing Economy Tax Act. Local Finance Research, 2018 (7): 36–42.

Chapter 5

A Study of Self-governance of Urban Sharing Platforms Based on the CPRs Theory

As can been seen from the governance trend of international sharing platforms introduced above, governments of all countries have recognized and suggested that selfregulatory supervision can be implemented of sharing platforms. The nature of such self-regulatory supervision is similar to the self-governance proposed by Ostrom for public pond resources. Therefore, based on the theoretical framework of selfgovernance, will discuss the principles, contents, effects of self-governance of urban sharing platforms as well as the coordination with government governance to help with the development of sharing economy industry.

5.1 Principles of Self-governance of Urban Sharing Platforms The self-governance of public pond resources needs to meet eight principles, including clear boundaries, alignment of the rules of occupation and supply with local conditions, arrangement of collective selection, supervision, hierarchical sanctions, conflict resolution mechanism, minimum recognition of organizational rights and decentralized enterprises. The following studies the principles to be met by self-governance in line with the characteristics of urban sharing platforms.

5.1.1 Nested Boundaries of Urban Sharing Platforms Ostrom pointed out that the purpose of self-governance is to solve the ineffectiveness of collective action, so the boundaries of resource supply should be clear, and the individuals or families who draw certain resources from CPRs should also be clear.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_5

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The supply boundary of urban sharing economy platform has two levels. One is enterprise boundary, i.e., the boundary formed by platform enterprises themselves. Sharing behavior has to depend on the application terminal of a platform to happen, with the enterprise legal person as its representative. The other is spatial boundary. Except for intangible products such as knowledge and skills, most resources are concentrated in a certain geographical range due to regional concentration of sharing behavior. Since sharing behavior is spatially confined within the boundary of cities, any behavior that takes place across cities may very likely bring high transaction costs and weaken the competitiveness of sharing. Therefore, the supply boundary of the sharing platforms has a certain degree of nesting. As shown in Fig. 5.1, each sharing platform forms a clear boundary. At the same time, when an enterprise conducts business in different cities or regions, the transaction also has an obvious regional concentration (concentrated in the shaded part in the figure). The solid line boundary in the figure is the enterprise boundary, which can be divided into two types. Type 1 is a sharing platform enterprise that carries out cross-city business, concentrated in the boundary range of each city numbered 1, 2 and 3. The sharing platforms of Type 2 serves a single city, whose business is centered within the spatial boundary of City 3. For participants in the sharing behavior, consumers who need to obtain related products and services through sharing platforms must register on the platform, and only after successful registration can they enjoy the relevant services. Therefore, participants who obtain the right to use resources from the sharing economy platform must be registered members of the platform. This membership system defines the groups participating in the sharing behavior and makes it easy to track the behaviors of participants. Members and non-members also form a clear boundary in the sharing transaction.

City 1

City 2

3ODWIRUPHQWHUSULVHW\SH City 3

3ODWIRUP HQWHUSULVH W\SH

Fig. 5.1 Nested borders of sharing economy platform

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5.1.2 Sharing Platforms to Rely on Local Resource Conditions The CPRs theory holds that the rules for public ponds occupation of time, place, technology and number of resource units should be consistent with local conditions and the rules for the supply of required labor, materials and funds. This requires a corresponding state of balance between the supply and demand of shared resources to avoid an oversupply, inefficient supply, or a waste of limited resources. Benefiting from today’s developed Internet technology and mobile terminal application technology, sharing platforms can obtain relevant information of supply and demand through user registration. As an intermediary, sharing platforms have the most basic function of transmitting and exchanging information. This presents idle and disposable labor and materials transparently on the platform, available to users in need for their full and convenient use at a relatively low price. With the increase of registered users, the platform can release more and more adequate information, attracting more consumers and linking more diversified and professional products and services. This greatly solves the problem of information asymmetry brought about by the government and makes it easier to achieve market equilibrium. There are always idle resources. The more idle resources are activated by sharing platforms, the greater the value created. In the absence of government intervention, each successful sharing transaction has to some extent saved the development of new resources within the limited scope of the city and fully satisfied the market demand. For example, more than 90 percent of bike-sharing companies went bankrupt because they failed to connect with existing transportation resources properly, resulting in oversupply, resource waste, and occupation of the city’s already congested public transportation. Enterprises including ofo rely on large-scale market launch in an attempt to expand their market share, but with a very high cost. Such launch definitely will not help achieve the convergence of marginal cost in the concept of sharing. In addition, the maintenance and loss compensation of bicycles in the later stage make these enterprises typical asset-heavy ones. Another local resource that can help a sharing platform govern itself is homeowners associations. For example, when building its product channels, a house sharing platform needs to integrate itself into different groups, including apartment committees, homeowners associations, and various cooperative organizations. In the United States, homeowners’ associations (Homeowner’s Associations, HOA) assume this kind of function of self-governance, managing every aspect of the community, including repair, maintenance, quality of life, etc. Unlike court bans on “flat” rentals, the self-governance of HOAs does not entail the prohibition of house sharing. Instead, it regulates the rental behavior, including the frequency and length of rentals, or charges owners a rental fee, and establishes connections with the intermediaries in sharing economy to grasp the basic information of tenants in real time. In addition to the restrictions on owners, a homeowners association can also play a certain role in restraining the negative externalities. Through its relationships with the parties in the transaction, a homeowners association can classify a neighborhood or apartment

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building under its jurisdiction into “rentable sharing apartments” and “non-rentable sharing apartments” for prospective buyers or tenants to choose from.

5.1.3 Sharing Platforms as the Wisdom of Collective Choice The provision of public goods is a process of collective selection by taxpayers and other stakeholders. Due to its external nature, benefit–cost asymmetry, and differences between collective and individual interests, it is very likely to cause conflict, complaints, and contradictions. Therefore the CPRs theory emphasizes that most individuals affected by the operating rules should be able to participate in the modification of the operating rules. This requires a sharing platform to have a good feedback mechanism, which can enable itself to continuously improve its service level, optimize the way of information disclosure, and promote cooperation more efficiently. Traditional enterprises, when formulating rules, mostly do so from the perspective of enterprise owners. Their operation rules will give more consideration to the internal operation, profit, scale, etc., and the management mode is relatively closed. In contrast, sharing platforms can have a more open management mode, adjust the operation rules according to the changes in supply and demand, and use the evaluation system to reflect in time the advantages and disadvantages of the products and services provided, so that users can have more sense of participation and belonging to the platform.

5.1.4 Effective Self-supervision of Sharing Platforms Self-supervision and rule iteration are an indispensable part of the development of urban sharing platforms. The CPRs theory requires the self-governors of a public pond to check actively its source status and the behavior of occupiers. Relying on technology and network, sharing platforms can conduct real-time tracking and background monitoring of each transaction more accurately, and deal with contradictions between traders in a timely manner. At the same time, the management of trading activities based on the sharing economy platform can also minimize the transmission time of operation execution, and since the operation efficiency is directly related to revenue, platform managers have enough motivation to implement management behaviors. In addition to the self-supervision of enterprises on a single platform, an information sharing system of enterprise alliance can also be established based on the whole sharing industry. The establishment of this credit monitoring system can not only help the sharing economy platform better manage the internal problems of enterprises on the platform, but also facilitate the government to implement supervision.

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Health inspectors in the United States, for example, can use Yelp1 ratings to tell if a restaurant is liable to germinate food poisoning. Transparency and availability for scrutiny also need to be considered in order to ensure the effectiveness of self-supervision by sharing platforms. The progress information inside the platform is likely to involve commercial sensitivity, so many platform enterprises are reluctant to disclose the information to the public. Although this can protect the enterprises, it will also limit the supervision and participation of other organizations. In order to avoid legal disputes and improve the reliability of self-supervision of sharing platforms, a tripartite model, in addition to the self-monitoring framework, may be adopted flexibly, with a third-party agency hired to conduct a comprehensive evaluation of sharing platforms. Governments or other organizations can indirectly evaluate the self-supervision history of sharing platforms through third-party institutions. This tripartite supervision model can also prevent the evaluation system from being abused by a sharing economy platform, reduce false comments or unfair criticism, ensure the public access to real public information, and prevent the privatization of public information.

5.1.5 Internal and External Sanctions of Sharing Platforms Where urban sharing platforms are concerned, effective supervision cannot completely avoid participants’ violations of regulations, so it is necessary to use sanctions as punishment for such behavior. The description of graded sanctions in the CPRs theory is that occupiers who violate the operational regulations are likely to be subjected to graded sanctions by other occupiers, the relevant officials or both (the degree of sanctions depends on the content and severity of the violation). The sanction of sharing platforms can be divided into two parts: one is the sanction within the system; the other is the sanction outside the system from the government department, that is, the sanction of the relevant regulatory department on the public pond resources. As for the sanctions within the system, the sharing economy platform is reflected in the fact that the platform generally sets up a credit system based on the Internet system. This credit system is usually based on outsiders’ evaluation, that is, the evaluation of the counterparty on the transaction, including the experience and convenience of use, and the satisfaction of the service platform. If the experience of product quality or service quality is poor, the feedback score will usually be very low, which can be seen by other users or participants in the system. Users will question the product or service with a low score and reduce its use. Meanwhile, the platform will also interview the product or service provider and take corresponding punitive measures.

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Yelp is the largest review website in the United States. It was founded in 2004 and went public in 2012, with a market value of more than 6 billion dollars.

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Sanctions outside the system mainly refer to the punishment mechanism of government agencies for violations and illegal behaviors that infringe others’ interests. Specific punitive measures can be determined according to the degree and content of violations, including administrative punishment and legal punishment. For behaviors that endanger public security, hinder the normal operation of the system, or violate existing institutional arrangements, they can be sanctioned by relevant government departments. Such sanctions are more mandatory than those within the system. Generally, the higher the degree of violation, the more likely they are to be sanctioned outside the sharing platforms.

5.1.6 Sharing Platforms Required to Avoid Internal and External Conflicts in the Industry In a sharing platform, possible conflicts include those between participants within the platform and those between participants and the government. A mature sharing platform should ensure that conflicts between internal participants are minimized, which tend to occur between providers and users of resources. As in other second-hand trading markets, resource users obtain all information of resources through the platform, and the sharing platform needs to ensure that the information of resources is authentic and credible, without any false or exaggerated information. Therefore, the sharing platform plays a role in verifying and supervising the resources entering the sharing trading market. Once there is untrue shared resource information, it is difficult for users to judge the real quality of resources, easily causing the problem of “bad money drives out good money”, which in turn will gradually reduce users’ participation and trust in the platform. Sharing platforms activate the stock of urban resources, a process that itself will encounter both institutional obstacles and resistance from traditional enterprises in neighboring industries. The Internet technology revolution relying on the sharing platform has brought about the innovation of the trading mode, which is fundamentally in conflict with the strong exclusive property rights system of traditional enterprises. Therefore, the traditional industry will put pressure on the sharing platform enterprises to resist and obstruct this new trading model. To protect traditional enterprises, many local governments will also take a cautious attitude towards this new trading model. Therefore, sharing platforms should not only solve internal conflicts, but more importantly solve conflicts with the government system and traditional enterprises. In addition, the urban sharing platform will also face competition from within the same industry. Such conflict will appear in any stage of the development of this industry, and the competition with other industries will face similar problems, which will not be discussed here.

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5.1.7 The Relatively Independent Organization Rights of Sharing Platforms Fundamentally, sharing economy emerged as a spontaneous behavior of the market, with the organizational structure of modern enterprises under the “Internet+” model. One of the advantages of this organizational model is that the resources of private property rights can be utilized to the maximum extent as public goods. It also avoids the disadvantage that similar resources are provided through government monopoly and thus susceptible to interference from government policies. The resources provided by sharing platforms are idle resources with private property rights. In the process of revitalization, relying on the technical and organizational support of the sharing platform enterprises, resources can be efficiently reused in this sharing model (Yin 2018), which is very similar to the quasi-public goods provided by the government, such as shared bikes and rental bikes. The resources provided by sharing platforms is different from the public resources provided by the government mainly in that the transaction of the former is the behavior of the enterprise, and the provision of public resources of the latter is the behavior of the government. The enterprise organization of the sharing platform has an independent operating framework, which can ensure that the supply system is not too much disturbed by government policies, and more efficient access to market supply and demand information, and price information. The provision of public goods is very vulnerable to adverse impacts brought by changes in government system and official succession, and its sensitivity to the market is less than that of sharing platform enterprises at the forefront of the industry.

5.1.8 Decentralization of Sharing Platforms The decentralization system was originally applied to the national political structure. It refers to the leadership system in which the lower organs can decide issues independently within their jurisdiction, free of interference from the higher organizations. The reason why sharing platforms can activate such huge and diverse resources is that, compared with traditional enterprises, platform enterprises themselves do not decide the scale, type or even the price of each transaction. The main body that can play a decisive role in the sharing transaction and maintain the normal progress of the transaction is every resource provider and user participating in the collaborative transaction, that is, the smallest unit of the self-governing sharing platform. When there is a contradiction or conflict, each subject of self-governance can fully understand the cause and crux of the conflict in the shortest time based on its own platform to solve the conflict according to the time and local conditions. In addition, decentralization can also ensure that the resources, time, place and technology involved in each shared transaction are consistent with local conditions,

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thus ensuring the sustainable development of the industry and avoiding its rapid over-exploitation or possible conflicts between resource occupiers. To sum up, meeting the above eight self-governance principles is a prerequisite for the effective self-governance of urban sharing platforms. The core reason why there are many unsustainable sharing economy products in the industry is that a deep understanding is lacking of the organizational framework of the self-governing platform. As a result, there have appeared many “pseudo-sharing” trading platforms, which increases the waste of resources and leads to the loss of social and economic efficiency.

5.2 Scope of the Self-governance of Urban Sharing Platforms The self-governance of urban sharing platforms is divided into four parts: internal selection, institutional supply, credible commitment and mutual supervision, which are described separately below.

5.2.1 Internal Selection Variables Affecting Participants of Sharing Platforms The variables that affect the self-governance of sharing economy transactions include expected income, expected cost, intrinsic norm, and discount rate. Considering that the sharing transaction that promotes the collaborative consumption pattern is a kind of bilateral market, the bilateral platform involve three stakeholders, including the sharing platform, resource provider and resource user, to be discussed separately next. 1. Shared expected revenue (1) Expected revenue of sharing platforms The sharing platform is in essence an enterprise, whose rational behavior is to maximize its profits. Therefore, to gain profits is the fundamental driving force for the transactions of the platform, which is consistent with the traditional enterprise’s pursuit of profit maximization. The special feature of the sharing platform is that it cannot decide the price of each transaction, so the income brought by the sharing transaction is highly uncertain. To reduce the uncertainty, the sharing platform often uses the membership system and the deposit system to try to restrain the two parties involved in collaborative transactions and generate customer adhesion. Meanwhile, platform enterprises also use the deposit to activate their own funds. Sharing platforms in different industries have different ways of making money. Take bike sharing as an example. In the early stage, a certain amount of deposit was required before shared bikes could be used. Therefore, many platforms try to

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activate of the deposit paid by users as a new source of investment to obtain high profits. However, as sharing behavior is very dependent on credit, once a credit crisis occurs, a tide of deposit refund will directly crush these sharing platforms that rely on reinvestment of deposit. After widespread failures in the bike-sharing industry, credit crisis and difficulties in refunding deposits, some of the bike-sharing companies that are still in operation on the market have canceled the requirement of deposit payment, and have turned to other ways, such as binding personal virtual credit (such as Alipay Zhima credit) for the right to use the bikes. The profit model of sharing platforms then is increasingly going back to making profits on price difference and service fee. Another way to gain expected returns relies on the front end of the chain, where upstream companies take advantage of the high liquidity of shared products to expand their influence. For example, profits are increased by earning advertising fees or selling other goods when advertisements of other products to be promoted are found accompanying such shared trading items as shared power banks, cars and umbrellas. (2) Expected benefits of resource providers Although most actors involved in sharing transactions do not simply seek profits, resource providers still hope that their personal goods can return to the market for a small profit, or be valued by other strangers. In this process, resource providers hope that users can protect shared products as they would their own private goods, and sometimes they hope that they can contribute to the protection of resources and environment. From the perspective of use value, participating in sharing behavior will first bring the maximum use value of shared products, so the benefits brought by each sharing are mostly part of the lost use value of idle goods in the warehouse, that is, the sunk cost of idle resources themselves. This is one of the important ways of pricing shared products. Therefore, when pricing, resource providers do not need to obtain the full use value of the item completely, but determine the price based on the value of the item’s sunk cost relative to the number of uses. At the same time, this price should consider the possible depreciation problem as idle resources flow into the market. (3) Expected earnings of resource users The expected benefit of resource users lies in that sharing transaction satisfies the short-term demand for the use of a certain item and obtains the short-term use right of the item. Moreover, compared with purchasing items, the cost is greatly reduced. Therefore, this expected benefit is mainly reflected in the difference of consumer surplus between a sharing transaction and a single traditional purchase of an item, though the use value obtained is the same. The consumer surplus reflects the difference between the maximum price expected to be paid and the actual purchase price. Of course, in the comparison between using a shared bike and buying a bike, the maximum prices expected to be paid in the actual transaction are different and cannot be directly compared. But in relative terms, with the service life (or the highest number of uses) of the bike as basis, we can calculate the difference between the sum of consumer surplus brought by the shared bikes used the same number of times and other consumer surpluses. The consumer surplus

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brought by the purchase of a bike is an initial one-time investment. The multiple use of shared bikes is also vulnerable to price fluctuations, depreciation, capital cost and other influences, which should be considered holistically. 2. Expected cost of sharing (1) Expected cost of sharing platforms The expected cost of a shared platform is similar to that of a normal two-sided platform. The cost of a two-sided platform usually consists of three parts: the first is the cost of platform construction, the second is the cost of technical maintenance and updating, and the third is the cost of publicity and promotion. Since the platform can be used for a long time after completion, the first part is a one-time investment. At present, the initial construction cost of the sharing platform based on the Internet and mobile terminal application mainly includes program design, resource construction and so on. The second and third parts are related to the number of users, that is, the more people on the platform, the higher the cost, which is like the traditional variable cost. This part of the cost increases with the growing number of users, but its average cost and marginal cost usually tend to decline gradually. In the later stage, with the establishment of the platform’s brand reputation, the continuous expansion of the use scale of the platform can bring increasing benefits, given the positive network externalities prevalent in platform economy. Such transmission effect also makes the platform show an increasing trend of marginal benefits. (2) Expected cost of resource providers For a supplier of sharing economy, the supply cost of resources refers to the current value of idle resources after their depreciation, and also the depreciation brought about through the use of resources, etc. It is basically correspondent with the expected earnings obtained. The seller of goods or services evaluates the production value of the available resources before each transaction, depending, for example, on whether they are completely idle or temporarily idle. Items of the same value, when completely idle, have the highest sunk cost and therefore the lowest price, while temporarily idle items are those whose future possible use remains uncertain. However high its credibility, a sharing transaction of resources will bring more risks and uncertainties to the owner than lying idle in the warehouse. Therefore, the resource provider can evaluate the cost of each sharing transaction according to the idle degree of the items to be shared. Another consideration is depreciation. For durable goods, the depreciation rate is relatively lower, so the damage degree of a single sharing transaction is lower. With the possibility of man-made damage factored out, the depreciation corresponding to the transaction of durable goods is smaller, so the transaction cost is smaller. On the contrary, many consumable goods are not suitable for sharing, mainly because the depreciation brought by each use may cause damage to the goods and significantly affect the next transaction. Then, the higher the depreciation rate, the greater the expected cost of exchange.

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(3) The expected cost of resource users The direct cost to the resource user is minimal in the sharing transaction, because a single use only requires the payment of a royalty, which is much lower than the cost of direct purchase of property rights. However, since the products do not belong to users, an extra cost for information search must be paid for each use. At the same time, incomplete information symmetry may bring risks in each use, which is also a part of the expected cost of resource users. For example, it might be difficult to find a shared bike available nearby during rush hours, which takes more time, thus increasing the search cost. 3. Internal norms of sharing behavior The type of norms inherent in a shared platform is influenced by the norms shared by all other parties in a particular environment. If the norms are shared with others, then taking actions that are considered wrong will be frowned upon by the society, thereby creating constraints. (1)

Norms at the technical level

The sharing economy platform is highly dependent on the development of information technology, Internet technology and mobile terminal technology, so in the system design of platform construction, technical norms are the basis. The greatest benefit of the development of information technology is that it has solved the problems of adverse selection and moral hazard caused by information asymmetry. So, the platform needs to think about how best to reveal true information about the items they intend to share. From the perspective of repeated game, given its repetitive nature, each transaction will reveal the value information, usage information, circulation rate, geographical location information, etc., which can be analyzed, summarized, and sorted out by the platform through the use of background data. At the same time, the platform can judge the real value and depreciation degree of the item according to the user’s feedback information, so as to make the transaction more efficient and obtain the new Pareto equilibrium. It should be noted that design contents that violate engineering ethics should be clearly avoided in the technical norms, such as eavesdropping on users’ privacy, e.g., voice information, text information and personal information, by using user terminals on sharing platforms. (2) Norms at the institutional level Institutional norms are the guarantee for the development of sharing platforms, including the basic norms of platform operation, industry permits, etc. Many sharing services bring great convenience to consumers. Take car sharing as an example. At present, there are registered car-sharing platform enterprises in many cities in China, authorizing their vehicles to operate sharing business. So far, no concrete institutional norms have been formulated. Before the state issues its mandatory norms, self-regulatory norms play a core role in the development of the industry. When the

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norms are being drafted, each sharing platform enterprise in the industry can draw up a standard system according to its own sharing characteristics, so that each transaction is orderly and feasible, in terms of the specific tariff method, execution content, responsibility judgment, etc. Moreover, the expertise of many platform operators is uncertain, and their risk estimates are inaccurate. These factors might germinate a lot of hidden dangers and risks while the new industry is sprouting and gaining in momentum for further development. Therefore, the future trend of sharing platforms cannot be determined only by the huge market demand. Platforms and individuals should not assume that just because there is a market demand, they can go ahead unimpeded. Only when standardization and legalization are realized can sharing platforms develop better and further. (3) Norms at the moral level Sharing platforms are facing a grave problem: the public finds it difficult to understand the true meaning of sharing, given their conceptual framework of “private economy” and “sharing economy” and the concepts of “mine” and “not mine” that are exclusively familiar to most of them. This has had various adverse impacts on the development of sharing platforms. Taking ride sharing as an example. Bike sharing has encountered many additional losses brought about by immoral behaviors, such as destroying the license plate of shared bikes, removing the combination lock, and locking them for personal use when ridden home. In addition, as the emergence of shared bikes has a negative impact on vehicles operating illegally, there are also competing industries that maliciously damage or lock up shared bikes. The negative impact of this “collapse of the human heart” is likely to bring about the overall moral degradation of the society and destroy the social credit environment by magnifying just a few bad behaviors. From the perspective of the game, when the user and the service provider choose their own best scheme, the conflict of interests often land both sides in the prisoner’s dilemma. Theoretically speaking, when the number of games is finite, both sides will always choose the most favorable way to guarantee that their interests are not damaged. As a result, the prisoner’s dilemma cannot be solved, and Pareto optimality cannot be realized. In fact, some people actually do make the best choice for themselves (e.g., “government cars for private use”), but this undoubtedly harms the interests of other users and the company. If the worst comes to the worst, and everyone makes the same choices for their own benefit as a small group of people did in the beginning, then platform companies will suffer greatly. If the sharing platform company chooses to do so in the best interest of individuals, it will stop the service. Then, a Nash equilibrium will be created between the two sides, with neither side having any incentive to change themselves, and great loss of profits is inevitable. Fortunately, sharing platforms are not going in this direction, but the risks are still there. An effective way to deal with risks and break through the prisoner’s dilemma is to extend the cooperation between the two sides, turning the limited game into an infinite game, or at least leaving open the door to the next cooperation. In such a situation, neither party will, by taking a long view, rashly breach their

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contract to pursue short-term interests while giving up huge long-term interests. At the same time, it is also necessary to improve the reward and punishment mechanism, for example, through the establishment of a credit blacklist and a mechanism of reward for behaviors conducive to the operation of the company. This will change the payment matrix of users in the game and break through the prisoner’s dilemma between individual choice and collective choice. Ostrom’s internal choice for self-governance of public pond resources also includes a discount rate, which refers to the fact that resource occupiers who are skeptical about the future status of resources will give a high discount rate for future returns after careful deliberation, which is influenced by the degree of natural and economic security of individuals. If public pool resources are destroyed by some rulebreakers, those who have been well-behaved for years on end will give a high discount rate for future returns. Since the shared transaction, as a short-term behavior, is the transaction of right of use, rather than the transaction of property right, the discount rate issue will not be pursued further here.

5.2.2 Advantages of Institutional Supply Ostrom believed that it is very complicated to understand the possible benefits of a system, which depends on the type of public information, alternative schemes, existing institutional arrangements, etc. She put forward a set of 9 environmental variables for evaluation system. It includes the number of users, the scale of public resources, the conflict of resource units in time and space, the existing conditions of public resources, the market conditions of resource units, the quantity and type of conflicts, the availability of variable data, the current rules used and the proposed rules, etc. What is to be discussed next will mainly be the differences between the existing rules used by resource units and those used on traditional bilateral platforms, based on the characteristics of urban sharing platforms. (1) Rule 1: Sharing reduces transaction costs. In traditional economic markets, transaction costs cover all kinds of transactionrelated costs generated by two parties before and after the transaction, including information transmission, advertising costs, market-related transportation, bargaining in the negotiation process, contract signing, supervision and execution, etc. From the perspective of the boundary of enterprises, part of the reason for the existence of enterprises is that this organizational form reduces the transaction costs of the market. Therefore, the fundamental reason for the emergence of a new economic form is the reduction of transaction costs. The emergence of Internet sharing platforms have three effects on the reduction of transaction costs. First, the application of the Internet has greatly reduced the cost of information transmission and search of idle resources. The quick and easy access to nearby shared products through the use of smart phones and the emergence of mobile payment have greatly simplified the transaction process and substantially reduced transaction costs. Second, the fixed ownership reduces the difficulty of bargaining in

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the transaction process. While many transaction costs are caused by the bargaining over ownership or unclear ownership, the prerequisite of shared economic transaction is to ensure the ownership remains unchanged, which simplifies the transaction process. Third, the big data platform on which sharing economy is based strengthens the credit constraints of market players with credit records, reduces information asymmetry, thus bringing down transaction costs. As a result, idle resources that did not enter the market due to high transaction costs are activated and within the tradable range. (2) Rule 2: Sharing improves the degree of transaction matching The basic idea of matching theory is that there exist individual differences. Taking occupation matching as an example. Everyone has their own personalized characteristics, and each occupation has different requirements on workers’ abilities, knowledge, skills, character, temperament, and psychological quality due to its different work nature, environment, conditions and methods. This problem of heterogeneity existing at both ends of supply and demand requires the selection of the corresponding type of occupation according to a person’s personality characteristics, viz., the person-position matching. For a resource system of sharing economy, each resource provider has their independent characteristics, and the resources provided by the whole system are not single, repetitive, or completely standardized, but diversified and different. Therefore, the research on the degree of supply and demand matching cannot copy the supply and demand theory at the enterprise or industry level; rather, it should be conducted as one-to-one sorting, as in marriage or job hunting. Therefore, the inclusion of multiple types of resources is a core competitive power of the resource system constructed by sharing economy. Due to diversity in various types of resources gathered on the platform, various demands in the market can be better matched, thereby improving the matching degree of diversified supply and demand. This not only differs from the single supply mode of natural resources system, but also provides an innovative supply mode to satisfy the self-governance of CPRs. For example, the sets of men and women in the marriage matching model are extended to the set of suppliers S = {S1 , S2 … SN } and the demand side set D = {D1 , D2 …, DN }. Taking homestays as an example, the tourists who go to the West Lake scenic area and need to find a place to stay are of the demand side set. In this set, everyone has different preferences for location of accommodation, so they have personal preferences and ranking for all the hotels and homestays that provide accommodation. All accommodation units in the West Lake Scenic area are of the set of suppliers, including traditional hotels and shared homestays. Considering the safety and price, homestay providers have higher requirements on tourists than traditional hotels, especially in personal quality and morality of tourists, so different accommodation providers also have their preference ranking. Let’s suppose S·D represents the sets of all possible ordered pairs (s, d). A match W is a set of ordered pairs from S·D and has the following properties: every member of S and D appear in at most one ordered pair of W, where a perfect match W’ is every member of S and of D happen to appear in the pair W’.

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The perfect match is not necessarily stable, because in addition to the requirement of perfect match, there are also no unstable factors relative to the match. For example, in two stable matches, one individual is not satisfied with the other. By examining the matching problems of tourists and accommodation in tourist attractions with two accommodation conditions of homestay sharing accommodation (such as Airbnb and mayi.com) and traditional hotel, we can compare the stable and perfect matching of the equilibrium results of the two, and then verify the difference, flexibility and professionalism of sharing economy.

5.2.3 Credible Commitment and Mutual Supervision Credible commitment and mutual oversight reinforce each other and are inseparable. In the initial stage of a self-governing organization, most people agree to follow the proposed rules, and in the course of time, if the profit of disobeying certain rules is higher than the profit of obeying them, people may break the rules, unless the act is discovered and punished. Thus, contingent commitments to follow the rules are credible only if there is supervision. From the perspective of supervision costs in selfgoverning organizations, mutual supervision within self-governing organizations can be strengthened without paying too much extra cost, which further increases the possibility of people taking contingent commitments and improves the credibility of people’s commitment to rules. The two complement and reinforce each other. Many internal governance rules designed by self-organizations not only improve the enthusiasm of their members to supervise each other, but also reduce the cost of supervision. The costs and benefits of monitoring the implementation of a set of rules are not independent of a particular set of rules adopted. Oversight becomes a byproduct of people enforcing rules and governing themselves because they don’t have to pay many other extra costs. The new institutional economics clearly points out that once the mutually beneficial settlement of the Assurance Game is realized, it is a stable potential equilibrium. The participants have no intention to change their individual behavior strategies, but this collective choice faces the same problem as the prisoner’s dilemma. External coercion is used as a solution to the commitment problem, but the external coercion is mostly implemented by the government or an institution, which can easily fail due to lack of information, motivation, and other problems. When credible dynamic evaluation is provided, sharing economy, as a selfgoverning group, needs to solve the commitment problem and give feedback free of external coercion to ensure participants’ compliance with the rules. Intuitively speaking, the platform changes the static game into a dynamic one through the collection of participants’ information, and uses the feedback mechanism to take users’ historical evaluation as a reflection of participants’ credit. This is easier than building a personal credit investigation platform through the government, and forms more effective constraints on future actions. Thus, a new finite repetitive game equilibrium can be formed.

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The application of finite repetitive game in the CPRs theory is to solve the impact of resource damage to public ponds because most public ponds are relatively fragile and prone to excessive extraction of resources. For sharing economy, the credit system and feedback mechanism are the necessary conditions for a continuously smooth transaction. Behaviors of breaking promises or damaging resources have an important impact on the development of sharing economy. For example, the depreciation rate of shared bikes is much higher than that initially forecasted about their market due to many dishonest behaviors involving shared bikes. Therefore, with continuous and dynamic credit feedback, we can further discuss the impact of the damage on the system of shared resources. If we investigate whether the damage probability causes significant changes in the extraction behavior of the corresponding game, we need to discuss the following two hypotheses. Hypothesis 1: If there is no upper limit to the damage probability, then shared resources will soon be destroyed as predicted by the subgame perfect equilibrium. Hypothesis 2: If the damage probability is an interval, then there may be an optimal equilibrium in group sharing behavior under certain circumstances, which depends on the degree of information disclosure. The verification of the above two hypotheses can help judge whether sharing economy can reduce the resource damage caused by promise-breaking through the feedback of the system itself on the premise of no external intervention and forceful regulation.

5.3 Effects of Self-governance of Urban Sharing Platforms 5.3.1 Overcapacity: Aggravation or Mitigation Capacity, i.e., production capacity, is an important index to measure output capacity. Klein et al. (1973) proposed from a microscopic perspective that productivity refers to the output level that can be achieved under normal production conditions (such as no extension of working cycle, work schedule including regular holidays, normal machine maintenance, etc.). What is called overcapacity comes into being when the actual production capacity is less than the optimal production capacity and reaches a certain level due to the influence of production elements (Zhou 2007). At the macro level, affected by the fluctuation of social demand, various resources cannot be fully utilized, hence some idle production capacity. Lin (2007) proposed that overcapacity may be caused by the “wave phenomenon”, and believed that the industries that enterprises in developing countries want to invest in often have the characteristics of mature technology, existing product markets, and being in the world industrial chain, so it is easy for the whole society to reach a correct consensus on the promising industries, giving rise to a “wave phenomenon” of investment that leads to overcapacity. The typical “wave phenomenon” of sharing platforms is the emergence of dozens

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of bike-sharing platforms between 2016 and 2017, resulting in the exacerbation of urban overcapacity. Since overcapacity is a relative concept, the study of this index needs to compare the same type of enterprises at the industry level. Capacity utilization index is used by many manufacturing industries to measure the extent to which production capacity works. Obviously, the higher the capacity utilization rate of an enterprise, the lower the fixed cost of unit product. Take tourism industry as an example. It is an industry with creative and innovative products constantly appearing. Traditional hotels often have deficiencies in new business forms and new elements, but the hotels in existing scenic spots will have excess capacity due to policy drive and overheated investment. Based on the principle of balancing factor supply and tourist demand, the sharing economy platform helps the construction of hotels in scenic spots match with tourist reception, sightseeing and accommodation demand, providing diversified choices for tourists. The oversupply of rooms in the U.S. hotel industry began in the 1980s, when favorable tax laws enabled hotel chains and developers to go on a building spree with borrowed funds. After 1990, with room occupancy rates beginning to decline and room prices gradually increasing, overcapacity in the hotel industry in the United States began to appear. From 2007 to 2009, as room capacity continued to grow rapidly and the number of rooms supplied per week increased significantly, the price of each room available for rent (RevPar) decreased significantly (Zheng 2014). From the perspective of supply and demand, due to the uncertainty of market demand, idle capacity can resist the impact of temporary demand increase, acting as a shock absorber. In the early and middle 1980s, lured by the rapid development of inbound tourism, China’s hotel industry began to invest intensively in hotels in tourist cities. From the late 1980s to the early 1990s, many cities had the problem of excess hotels, and both room prices and rental rates plummeted. This created an industrial famine and exerted a long-term negative impact on the profit rate and industrial quality of the hotel industry (Ma 2011; Zheng 2003). Figure 5.2 shows the main indicators of star-rated hotels in China from 2009 to 2018. According to the data trend in recent 10 years, the number of star-rated hotels in China decreased while the average rental rate remained stable. Intuitively, the obvious change from 2017 to 2018 is the increase of the RvePAR. When the average rental rate remains stable, the increase of rental income means that the relationship between supply and demand in the market is gradually optimized. Further in-depth analysis is still needed of whether this optimization is brought by the sharing accommodation industry and what is the impact of the capacity of the tourism industry featuring accommodation sharing. China House Sharing Development Report 2017 points out that one impact of house sharing is the revitalization of the stock of housing. House sharing platforms can revitalize the idle housing resources owned by urban families, turn them into a “reservoir” of short-term housing demand through online operation, and provide personalized accommodation services for consumers with different travel purposes, thus becoming an important tool of “destocking” in the real estate market.

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RevPAR in yuan

Fig. 5.2 Main indicators of Chinese star hotels from 2009 to 2018. Source Collated from China Tourism Industry Statistical Bulletin and China Star Hotels Statistical Bulletin

5.3.2 Negative Externality: Increase or Decrease After the discussion of increasing negative externalities caused by sharing behavior for urban environment and surrounding communities, the reduction of negative externalities that sharing may bring is treated below. Externalities are divided into intergenerational externalities and environmental externalities. Intergenerational externalities arise from the excessive use, exploitation, and occupation of limited resources, which leads to resource depletion and unfair use by future generations. The main reason why sharing economy reduces intergenerational externalities is that it reduces the continuous development and occupation of new resources and makes full use of existing idle resources to meet the demand. Environmental externalities arise from the destruction of public environment by various consumption and production behaviors, including air pollution and water pollution. The main reason for sharing economy’s reduction of environmental externalities is that through low-cost collaborative sharing, the total amount of environmental pollution caused by independent actions can be reduced (for example, the use of shared cars instead of private cars can directly reduce exhaust emissions by half or more). Traditional intergenerational externalities are mainly reflected in the depletion of resources. The sharing economy model has an indirect effect on resource depletion, mainly because greater utilization of existing resources will reduce the use of new resources. The research on the intergenerational externalities of car-sharing shows that there are differences in the operation performance and use efficiency between the traditional taxi industry and car-sharing (such as Dida Pinche and other ridesharing services), with the use efficiency of shared cars significantly higher than that

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of private cars. The impact of ride-sharing industry on environmental externalities is relatively observable. For example, after the emergence of car sharing, the emptyloaded rate of cars is significantly reduced, and the travel time and cost of passengers also go down. Over the same travel distance, ride sharing reduces environmental pollution.

5.4 Coordination Between Self-governance and Government Governance The previous study of the internal resource system of sharing economy shows that the shared resource system can achieve efficient operation through self-governance under certain conditions and help solve the imbalance of resource allocation. The combination of government governance and self-governance goes along the line of coordination between sharing platforms and external resources, including traditional resource system, urban public resource system, personal credit investigation system and so on. Only when the governance of the resource system is coordinated internally and externally can the overall efficiency of resource utilization be realized.

5.4.1 Multi-center Governance of Urban Sharing Platforms The early collective action theory believed that rational individual choice could not spontaneously improve social utility, and the production of public goods should rely on mandatory or selective ways, that is, either through mandatory execution or internalization of externalities by reward and punishment mechanism, which denied the existence of altruistic tendency. Ostrom believed that in human social life, human beings as individual existence are always relatively limited in their cognition and thinking ability, so they must live together with human groups and develop in a coordinated way. Therefore, the system affecting collective action is of three levels: operational rules, collective selection rules and constitutional selection rules. Among them, the constitutional selection rules decide who is qualified to bring to bear on operational activities and results the special rules used to influence collective selection rules. Therefore, Ostrom believed that self-governance is a form of decentralized governance co-existing with the state and the market. This decentralization system can be extended to a multi-center self-governance system, which includes the central government, local governments and autonomous organizations at different levels. The most important role of the central government is to grant autonomy to local governments, while the most important role of local governments is to empower the platform’s self-governance and to provide an external environment for the implementation of self-governance, but the direct governing body is still the organization itself. Because of the extensive and frequent direct contact between the members of the organization, their mutual understanding is more real, and the cost of collecting the

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information needed to understand each other is also the lowest. At the same time, due to the high correlation of interests among organization members and between organization members and public resources, they are more concerned about the benign development and sustainability of resources than any external power center, and know how to govern public resources to ensure the realization of their benign development and sustainability. Therefore, compared with the single-center centralization system and the complete privatization system, this kind of multi-center self-governance system is a better choice for solving the “commons dilemma”. Wang and Dai (2017) pointed out that in the era of sharing economy, how enterprises can better fulfill their social responsibilities requires enterprises, the government and the public to assume indispensable responsibilities respectively. In the sharing model, enterprises should become the dominant player and pay attention to and undertake their own social responsibilities. Chapters 6 and 7 of this book will elaborate the multi-dimensional collaborative governance of house sharing platforms and ride sharing platforms.

5.4.2 Prior Access Based on Equity and Security The trading form of sharing economy is conducive to the efficient use of idle resources, but the organizations participating in sharing economy are always in the “gray zone” between business and individuals, and between public and individuals. As a result, the participants can not enjoy right and interest protection provided by the Labor Law, as professional workers in traditional industries. In this model, both service providers and participants may become disadvantaged groups. At the same time, ride sharing has broken the principle of fair competition due to tax differences, license differences and other issues, thus attracting protests from traditional taxi drivers. This has triggered a controversy in the society about whether sharing economy benefits the whole society, or only some people. All these problems come from the fact that a reasonable entry threshold has not been established for sharing platforms and there is a lack of reasonable operation rules of market economy. Therefore, in addition to the necessary conditions to be satisfied for self-governance within the resource system of sharing economy, a reasonable policy system outside the resource system is one of the sufficient conditions for the sound operation of sharing economy. For example, the sharing products provided by the tourism industry are represented by homestays. Since most rooms provided by homestays have their own personalities and characteristics, it is impossible to standardize uniformly with the industry standards of hotels. Therefore, it is necessary to establish the admission standards of homestay industry on the basis of an extensive and in-depth market survey. The most controversial sharing behavior in the transportation industry is the impact of ridesharing and carpooling on the traditional taxi industry. In the traditional taxi industry, service providers have a high entry threshold and standardized industry standards, but carpooling services on most sharing platforms have low operating costs, low entry threshold and no entry standards, thus prone to malicious competition, security and other problems, leading to the prohibition of car-sharing operations

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by some governments. The government should work together to establish an admission system for ridesharing or carpooling to create space for the orderly development of the car-sharing industry under the condition that fair competition and security are guaranteed.

5.4.3 Post-regulation Based on Normative Self-governance The sound operation of sharing economy requires not only the information disclosure within the system, but also a mature credit investigation system and a perfect information disclosure system at the social level. As individual behavior plays a major part in sharing economy, the risk of sharing behavior will continue to expand once the credit investigation of either side of the transaction goes awry. Therefore, the main task of the government’s post-regulation is to build a perfect credit investigation system for enterprises and individuals, to ensure the legal compliance of transactions and protect the interests of participants in sharing economy. In the context of deregulation, the government cannot directly intervene in the trading behavior of the market, but it can regulate the trading subjects of the market. Post regulation requires finding a convergence point between government governance and governance of sharing economy, and form a collaborative governance scheme of sharing economy, including three aspects: coordination of self-governance and access of sharing economy, coordination of self-governance of sharing economy and taxation, and coordination of the sharing economy system and urban public resources system. Specifically, according to the above research on access system, access collaboration can help find the convergence point between access threshold and self-governance conducive to building a fair and secure market environment and promoting the realization of self-governance of sharing economy. Based on the tax standards of similar traditional industries, tax synergy comprehensively considers sharing economy’s solution to the imbalance of resource allocation. In the specific operation process, through the determination of the degree to which sharing behavior can solve the problems of excess capacity and externality, corresponding tax concessions and exemptions are given to the sharing economy industry. The treatment then gradually approaches that of the traditional industry, to maintain an environment of fair competition. The coordination of urban public resources requires among other things that the sharing economic resources system should not meddle with the original public resources system of the city, e.g., the unwarranted occupation of public parking lots by shared bikes. The logical relationship between the self-governance of sharing platforms and government coordination is shown in Fig. 5.3.

Fig. 5.3 Logical relationship between the self governance of sharing platforms and government coordination

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References Klein, L R, Long V. Capacity utilization: concept, measurement, and recent estimates. Brookings Papers on Economic Activity, 1973 (3): 743–764. LIN Yifu林毅夫. Wave phenomenon and the reconstruction of Macroeconomic Theories for Developing Countries. Economic Research Journal, 2007 (1): 126–131. MA Bo马波. An early warning and prevention on “wave phenomenon” in China’s tourism industry. Tourism Tribune, 2011 (01): 12–17. WANG Zhaoxia王朝霞, DAI Ying戴滢. Path on realizing and undertaking of enterprises’ environment protection responsibility under the background of sharing economy. Ecological Economy, 2017 (11): 102–105, 157. Zheng, G. The Chinese lodging industry: problems and solutions. International Journal of Contemporary Hospitality Management, 2003 (7): 386–392. Zheng, T.S. What caused the decrease in RevPAR during the recession? An ARIMA with intervention analysis of room supply and market demand. International Journal of Contemporary Hospitality Management, 2014 (8): 1225–1242. ZHOU Jin周劲. The concept of overcapacity, judgment index and its application in the calculation of some industries. Macroeconomics, 2007 (9): 33–39.

Chapter 6

Multi-dimensional Collaborative Governance of Urban House Sharing Platforms

China’s sharing economy has maintained a steady and fast growth. Driven by this, industries in various fields are developing rapidly. As an important branch of sharing economy, house sharing, relying on the Internet sharing service platform, mobilizes idle houses and labor force and improves the utilization rate of idle houses. In 2018, the revenue of shared accommodation was 16.5 billion yuan, accounting for 6.1% of the total room revenue of the national accommodation industry, an increase of 11.2 billion yuan over 2015, with a growth rate of 3.8%.1 At present, the more mature enterprises of the urban house sharing platform include the accommodation sharing platform for individual users (hereinafter homestay) and the office sharing platform for business users. Accommodation sharing platforms involve urban and rural homestays. This chapter mainly analyses urban accommodation sharing platforms and governance, discusses how urban accommodation sharing platforms can connect with rural homestay resources to promote the development of rural homestays. The office sharing platform is a sharing platform enterprise that developed very fast in 2018, attracting a lot of attention. When the whole sharing industry began to suffer a series of problems such as investment decline, credit reduction and scale reduction, office sharing came on the scene as a dark horse for its accurate grasp of scarce office resources in the city, powerful backstage technology support and attractive marketing concept.

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Source: China Sharing Economy Annual Report 2019, issued by the State Information Center.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_6

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6.1 Self-governance of Urban Accommodation Sharing Platforms Accommodation sharing refers to a small accommodation facility that makes use of idle local resources and whose hosts participate in the reception to provide tourists with a taste of local nature, culture, production, and lifestyle. The integration of sharing economy and tourism provides more choices for travel. Through shared accommodation, people can get not only a place to stay, but also a landscape to enjoy, and a different life experience to have. However, there are three problems with accommodation sharing platforms. First, it is difficult to guarantee the authenticity of information communicated. For example, the pictures of housing resources on some platforms do not match the actual situation of the rooms, and tenants can only obtain information through the Internet. This information gap leads to the decline of the reputation of accommodation sharing platforms. Second, the quality of the room facilities is uneven. For example, accommodation sharing platforms have received feedback from homestay customers that the bedding in the room has not been disinfected, not cleaned in time, or found to be newly renovated, with an obvious pungent smell. Third, it is difficult to guarantee the safety of homestays. For example, the fire facilities of ordinary homestays are not sound, there is a risk of disclosure of personal privacy, and the residential areas that provide homestays are inhabited by people of varied backgrounds. In view of the above problems, this section studies the self-governance and government governance of accommodation sharing platforms and how to achieve coordination between the two for the solution of the problems existing in the accommodation sharing industry.

6.1.1 Contents of the Self-governance of Accommodation Sharing Platforms Based on the contents and principles of self-governance proposed by Ostrom, this section discusses the expected benefits, expected costs, internal norms, advantages of institutional provision, and credible commitment and mutual supervision of the accommodation sharing industry. 1. Expected revenue of the accommodation sharing industry With the gradual improvement of personalized requirements for travel, there is also a rapidly developing market demand for homestay. Therefore, the number of participants in the homestay market is increasing and the platform is getting larger and larger in scale. Taking advantage of its platform, homestay breaks the information asymmetry between the supply side and the demand side and improves the accommodation demand matching. Compared with traditional hotels, urban homestays are mostly located in communities, while many rural homestays are in towns and

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villages, whose rooms are generally equipped with such amenities as kitchen utensils, balconies, and other household facilities, making them easy to stay in. Many experiencers describe staying in a homestay as a bit like being the master of someone else’s house. (1) Expected earnings of homestay operators Traditional homestay operators are mainly individuals who earn income by sharing their spare housing resources. Since the cost of operating homestays is much lower than that of hotels, the pricing of homestays is also lower than that of regular hotels. The landlords often think that they have idle houses anyway, so they are willing to offer low prices with a sense of home, which is the major way to attract customers. A good reputation, together with personalized services provided by landlords, helps to attract customers as well. This will also lead to the rising cost of running a homestay. In the long run, reputation is the key to the expected income of homestay operators. At present, many homestay operators in China are institutions. They gather idle rooms in residential areas that reach a certain scale, carry out unified decoration in line with some cultural characteristics (such as Chinese classical culture, opera culture, etc.), and then launch them as selling points on the market. This business mode is model like the traditional hotel industry, but the problem is that due to the lack of formal constraints of the hotel industry and the lack of good communication between the landlord and the guests, it is easy to change the connotation of homestay itself and reduce its attractiveness to customers, although some effects of a scale economy can be achieved. This is because most travelers who choose to book a homestay rather than a hotel are motivated by the personalized experience, friendly communication with the host, and the different travel experience that such accommodations bring. So institutionalized homestay operators find themselves in an awkward zone between hotel owners and the self-employed. The reason for the institutionalization of homestays is that the expected income of homestay operators is greatly dependent on the changes of market demand. In the environment of increasingly fierce competition, many individual homestay operators find that the best way to gain income is to expand the scale of their business. However, since the scale of individual idle house resources is often very limited, the competition from institutions of the same industry in one community is fiercer than that of traditional hotels and has obviously caused impact and pressure on individual homestay operators, reducing their expected income. (2) Expected earnings of homestay platforms With the rapid development of the homestay industry, the development threshold of homestay platforms was lower in the early stage, as compared with its traditional counterpart, which requires high thresholds such as access and security clearance. As a result, many similar platform enterprises quickly emerged and were locked in fierce competition. For example, after Airbnb entered China, Tujia, Xiaozhu and Meituan rose rapidly. Earnings from these platforms mostly depends on scaling up to gain an advantage in resources and information.

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Take Tujia as an example. Since its launch in December 2011, Tujia has mainly operated in the middle- and high-end accommodation market. With idle housing resources available, it publishes housing information on the platform for users to choose, providing tourists with more homely and cost-effective accommodation products such as serviced apartments, characteristic homestays and villas, and extracting transaction commission, with independent family tourists and business travelers as the main targets. Tujia makes profits mainly in two ways. First, continued expansion of business scale through mergers and acquisitions. Tujia is the largest accommodation-sharing platform with the largest number of listings in China. In addition to its own platform, it has acquired the businesses of such operators as Mayi, Ctrip and Qunar. After Fishtrip joined it, Tujia formed a comprehensive new group of five homestay platforms. In terms of traffic entry, Tujia has successfully integrated itself with eight platforms, Mayi, Ctrip, eLong, Qunar, 58 Ganji, Sesame Credit and Fishtrip, realizing the sharing of industry inventory and traffic. At present, Tujia has more than 1 million housing units, covering 345 domestic destinations and 1037 overseas destinations, making itself one of the unicorns of Chin’s tourism and accommodation industry. Second, diversified development through offline cooperation. Tujia cooperated with nearly 1,000 domestic real estate development enterprises in real estate management and established Sweetome Group, focusing on real estate management in other places. It has launched with accommodation sharing as the core a series of brands, such as Sweetome Boutique Apartment, Sweetome Vacation Rentals, Sweetome Service Apartment, Hi Villa, TOWO, GOMO, WOGO, which combines with the online business model and covers many cities and regions. (3) Expected benefits for homestay customers Customers who book a homestay often have a higher demand for a personalized travel experience, so travel benefits are enhanced with a stay with a local family. By paying the same price or less than for a hotel, a guest can live more like a local. Take Sanya, Hainan province as an example. In such a classic tourist city, some seafood markets sometimes offer differentiated prices to local residents and tourists. The advantage of staying in homestay is that you can buy higher-quality seafood at a more affordable price like locals and ask the landlord to help you cook or prepare it yourself. The experience of cooking seafood is an extra attraction for many visitors to Sanya, as an accommodation is not just a place for rest and relaxation during the journey, but an important part of the overall experience. As often commented by customers and homeowners on some homestay booking platforms, “Homestay brings people closer to each other, and makes the society more open and inclusive.” Therefore, apart from providing a relaxing accommodation environment for their customers, homestays also bring some social benefits such as the enrichment of local life and culture.

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2. Expected costs of the accommodation sharing industry (1) Expected cost for homestay operators The expected cost for traditional individual homestay operators is relatively low, for what they offer are privately owned idle houses. The main costs include room cleaning, bed cleaning, catering and others. These variable costs can be directly covered by the income brought by house sharing. In addition, what most individual homestay operators are after in the first place are not just increased earnings. Nowadays, the increasingly fierce competition in homestay industry has led to a continuous decline in the profits of individual operators; therefore, many platforms have begun to extend their business upstream to help homestay operators to reduce their costs. They take advantage of the information at their disposal to help individual operators to solve technical problems concerning design, decoration, cleaning, shopping mall, Internet of Things equipment, intelligent management and many other links, so as to lower the business threshold for landlords to the greatest extent. Examples include Xiaozhu’s rental service of Lanzu and that of the Starry Night Project of Zhenguo (renamed Meituan in October 2019). Many homestay operators, for their part, are trying to take advantage of some loopholes in regulations and maneuver in the grey area between traditional hotel day rentals and homestays. They hope, on the one hand, to obtain economic benefits brought by the regulation model and squeeze individual homestay operators out of the market, and on the other hand, to avoid meeting the entry requirements for traditional hotels (such as the access conditions and tax payment, etc.). These homestay institutions are competitors and opponents to individual homestay operators, who find it difficult to compete with them. As a result, many individual operators even quit the market or turn to other business activities related to homestay, such as catering with local flavor. Of the expected costs of homestay operators, those directly related to rooms are relatively fixed and controllable, and what operators should pay more attention to are the costs of the changes brought by industry competition. (2) Expected cost of homestay platforms The expected cost of homestay platforms includes the resources required for their early construction and various costs during the operating and maintenance periods. In terms of business model, a homestay platform is an asset-light enterprise, and the cost of building the platform in the early stage mainly consists in the input of technical resources, such as how to connect the supply and demand of the Internet and how to develop Internet distribution technology. In terms of technology, the operation of homestay platforms has realized the specialized division of labor and the formation of industrial chain. Take Guanghdong Youxiaoyun Information Technology Co., LTD. for example. Established in Guangdong province in April 2019, it is

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a technology-oriented enterprise that specializes in the research and development of communication technology and network technology and provides technical services of SaaS cloud platform2 for tourism network distribution. The technical resources required by the homestay platform account for a large proportion of the cost, so this industry is a typical technology-intensive industry. After rapid development, large domestic homestay platforms have formed strong competitive advantages at present, making operations more difficult for new platform enterprises and those preparing to enter. In other words, the advantages of incumbent enterprises constitute the entry costs of new homestay platforms. To better connect resources and reduce operating costs, many existing homestay platforms have begun to try innovative operating models. For example, Xiaozhu has created a series of characteristic projects, such as “Live in a flower shop,” “Live in a theater,” “City Lights” bookstore accommodation plan, and “Charming Countryside Homestay”. By staying in Siheyuan (traditional quadrangle dwelling typical of northern China), garden house and other characteristic homestays, guests can experience local culture and enjoy the fun of living during the journey. At the same time, landlords share idle houses or a sofa or a tent through the platform, making friends with tenants and earning profits in the process. These innovative operation models make the resource connection of homestays more extensive and diversified, and the increase of platform traffic reduces the average cost of platform operation. With the gradual increase of customers’ requirements for the safety of homestays, the expected cost of the platform as a guarantor in ensuring the safety will continue to mount. To control costs, the platform continues to increase inter-industry cooperation. For example, smart check-in with security authentication was achieved through the cooperation between Xiaozhu and IFAA (Internet Finance Identity Authentication Alliance) on continuously upgrading the intelligent door lock security technology. After confirming their identity through face scan and other means, customers receive an electronic key on their phone immediately, allowing them to unlock the door easily. In 2019, the short-term rental platform Xiaozhu started its user blacklist mechanism, and organized landlord training with public security departments in major cities in China and distributed free safety operation manuals to landlords. For tenants, the short-term rental platform launched a Tenant Protection Plan. It stipulates that tenants can report to the platform such cases as inability to check into a reserved room, discrepancy between rooms with their facilities and photo advertisement, and temporary price raise by landlords whenever they arise, and the platform will compensate with full refund after they are verified.

2

SaaS, also known as “software as a service”, refers to the delivery of applications in the form of services over the Internet. Software delivered through the SaaS platform is also known as cloud software, ASP, on-demand software or hosted software. For consumers, the top apps are webmail, bookmarking and photo sharing. For enterprises, recruitment, expenditure and customer relationship management should be used as the common early innovation methods of enterprise management.

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(3) Expected cost for homestay customers The main cost of accommodation includes two parts: information search and accommodation fee. There are also potential costs such as poor check-in experience and security risks. Information search and room fee are the explicit costs for homestay customers and the cost of the former in the early stage of accommodation is greatly reduced, with the development of Internet technology. According to a survey, the average booking time on homestay platforms is 10–30 min, and the customers who choose homestay are very clear about their needs, so it takes less time and energy to search for information. In addition, the cost of accommodation is often cheaper than that of budget hotels in the same area, so it is more economical and affordable, and therefore more attractive to customers.3 More noteworthy are the hidden costs borne by homestay customers. Since housing information can only be obtained from the Internet, how to verify its authenticity is what customers are concerned about. At present, some homestay customers encounter a large discrepancy between the experience after check-in and the information obtained on reservations. This kind of “information trap” is rarely experienced in chain hotels. Therefore, how to find a balance between personalized and standardized management is a question that homestay operators need to consider. In addition, safety concerns are the main reason why many customers shy away from homestays. Since accommodation is a very personal part of traveling experience, the requirement for privacy is high and customers want to stay in a place that is safe and secure. Many homestays are in the ordinary community. The security there is often lower than that of a hotel for two reasons. One is that the customer information of the latter is clearer, with ID information provided by every customer when they check in, while the community where a homestay is located has a more complex environment of residents with varied backgrounds. Second, a hotel has security and monitoring systems in place, providing a more comprehensive surveillance coverage of the public area. In addition, a hotel has a professionally approved emergency access, which offers easy exit and aid in case of an emergency. The surveillance of public areas in a community mainly relies on the monitoring system of a residential block and the security system of a community property management, easily creating monitoring blind areas. What’s more, the community generally has wider open space, making it difficult to seek help in case of danger. Third, a hotel has security personnel and desk staff on duty around the clock, which is more professional and comprehensive than the night duty system of a community property management. Fourth, the hotel as a professional tourism accommodation provider is subject to more strict administrative norms and legal provisions, with a higher degree of privacy protection of customers. 3

https://news.cncn.net/c_848714.

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The operators of homestays in contrast are widely distributed. The quality of the landlords is uneven, and some deliberately use the information of the tenants for advertising promotion. This very easily infringes the legitimate rights and interests of customers. These security costs constitute an important part of the expected cost of homestay. How to minimize these hidden costs is a problem that merits the careful consideration of homestay operators and platforms. 3. Internal norms of the accommodation sharing industry The homestay industry has expanded from major tourist provinces and hot tourist cities to second- and third-tier cities, from suburbs and villages to downtown areas. More than 250 cities in China have homestay industry of a certain scale. However, in urban homestays, cases of residents’ being disturbed often occur in the community due to the change in nature of operated homestays from private residence to rented lodging. Accommodation service (hotels and guesthouses) itself is a special industry, whose operation requires a government permission and a fire certificate. However, the newly fledged homestay industry bypasses the supervision and contains some great hidden dangers. Under such circumstances, it is urgent to establish unified management regulations and industry internal norms to guide the operation of the whole industry that is compliant with laws and regulations. Among them, the formation of a unified industry internal norms, is an important part of the self-governance of homestay industry. A homestay operator should constantly improve its own ability and operate in accordance with laws and regulations under the strict supervision of the government and society. A homestay platform is required to strictly review online housing resources to ensure their authenticity and assume the role of supervisor to strictly control the authenticity of each set of online housing resources on the platform, so as to maintain the healthy and sound operation of the platform. A customer can feed back to the platform and operators the information about the authenticity of housing resources, service quality and accommodation experience, helping the platform to improve information and assisting the landlord to improve the quality of housing resources and service (see Fig. 6.1 for the relationship among the three). 4. Advantages of the supply system of homestay platforms The biggest supply advantage of homestay platforms is that it connects idle housing resources with personalized customer needs, forming a diversified supply and demand match. The rapid development of homestay platforms is like that of other sharing economy industries. By providing innovative ways of resource allocation, the platforms have brought about traditional individual transactions, business behaviors and social forms have undergone subversive changes (Liu and Wu 2015). The middle class is the main customer group of homestays. Their demand for leisure vacation and pursuit of life quality is constantly rising, and their desire to release pressure is also growing with the increase of leisure time. Accordingly, homestays are more flexible in operation than ordinary hotels, and easier to integrate with

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Homestay operator

Reservation & feedback

Customer

Service & protection

Homestay platform

Fig. 6.1 Internal operating mechanism of accommodation sharing

creative and innovative industries, events and exhibitions, product training and other industries. In addition, homestays take advantage of their own characteristics (such as occupation, hobbies), natural environment and cultural environment where they are located to provide informal and personalized accommodation experience and better meet the needs of different categories. At present, the upgrading of quality, rising price and continuous increase of occupancy rate of homestays also reflect the match between the strong demand of the middle class and the homestay industry. Another characteristic of China’s current homestay industry is its institutionalization mentioned above. Table 6.1 compares some advantages and disadvantages of institutionalized homestay supply system. Table 6.1 Comparison of some advantages and disadvantages of the institutionalized homestay supply system Compared with traditional hotels

Compared with individual homestay operators

Similarities

Certain scale of operation with Reuse of idle resources and personalized provision of standardized services decoration, with a sense of home based on accommodation

Differences

Obvious personalization and sense of home, but limited service scope

Large scale, less direct communication with landlords, standardized cleaning services, etc

Advantages

Lower access threshold, less cost and flexible service

Economies of scale easy to form

Disadvantages Lack of industry norms, such as access system, tax system, etc

Lack of one-to-one communication between landlords and customers, tax system, etc., and reduced sense of experience

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Institutionalized homestays are becoming more and more like the traditional theme hotels. Gathering idle housing resources together, these institutions renovate and transform them into homestays of the same brand, providing customers with characteristic rooms. What they offer even match ordinary hotels in scale. This kind of institutionalized homestays has the advantage of economies of scale but are easily losing the one-to-one communication and exchange between homeowners and customers. Because of the scale advantage, the institutions have an advantage over the self-employed in cost saving. For example, they can hire temporary workers to clean the rooms to reduce the hassle of cleaning, and professional cleaners may be more meticulous. However, to distinguish hotels from institutionalized homestays, the core lies in that traditional hotels do not reuse idle resources but develop new ones, while institutionalized homestays are of sharing economy that integrates idle resources and share rich accommodation experience. While affirming the advantages of institutionalization, we should also see that institutionalized homestays have not yet received similar industry supervision and regulation from within the industry to hotels, so they are also prone to safety and other problems as ordinary homestays are. Whether institutionalized homestays should be regulated as traditional hotels is also worth further discussion. 5. Credible commitment and mutual supervision of homestay platforms The open evaluation system on the homestay platform is the biggest guarantee of the credible commitment and mutual supervision of the industry, which forms the self-initiated service supervision system of the industry. Nowadays, it is becoming more and more difficult for service providers to get five-star rating from customers, because there is an increasingly higher demand for accommodation experience. Take the open reviews on Airbnb’s China site for example. There are two metrics in the reviews section: text reviews of rooms and their ratings. This kind of public display of comments serves as a reminder and advice to other consumers. Many customers of homestay platforms do not care what information servicer providers publish online, but pay more attention to the comments of other customers who have checked in, because they stand on the same side and have the same role in the same situation. Airbnb also provides the function of keyword screening for customers’ text comments, which can be condensed into phrases and displayed as labels on the home page of room booking to form a labeled description of a room. In this way, it is easier for consumers to form an exact and subjective impression and judgment of the room. However, in an immature consumer environment, the scoring system will also become a double-edged sword for the development of homestay industry. With the subjective comments of customers now becoming the “master” that wield great power, the platform can no longer rely on other third-party supervisions. However, for the operators of homestay services, not only occupancy rate but also rating should be considered, and algorithms and rules now have the last say. The immaturity of the consumption environment have given rise to a small number of hypercritical consumers who want to “pay the equivalent price of a McDonald’s meal for a fivestar hotel service, which makes homestay operators suffer. Therefore, the platform,

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as an intermediary, needs to focus on how to control the negative impact of malicious rating on the homestay industry, for example, by requiring consumers who give a bad rating to provide photos and other conclusive evidence. Credible commitment and supervision of bilateral market are not only the supervision of operators by customers and the credible commitment of operators to consumers, but also the mutual trust and commitment between consumers, operators, between operators and consumers. In March 2015, U.S. District Court Judge Edward Chen said in a class-action lawsuit against Uber drivers in California that the rating system is not just a consumer feedback tool but represents an entirely new level of and approach to regulation that is more effective than any boss who always keeps an eye for their employees. A conscious and constant exposure guarantees the automatic operation of power, Chen added, citing Foucault’s Discipline and Punishment. The scoring systems of on-demand platforms often have disciplinary functions as well. For example, Airbnb’s platform does not directly write off those with poor records, but puts those with low scores at the bottom of the list, so that those with poor performance are less exposed, thus receiving fewer orders and making less money. From the perspective of dynamic game, the homestay operators who are dispersed and not officially supervised can continue to operate, but those who gain exposure on the platform are generally the operators who persistently provide good services.

6.1.2 Coordination and Conflict Between Shared Accommodation and Urban Public Resources 1. Coordination with public resources The coordination between shared accommodation and public resources is reflected in two aspects: first, revitalization of idle housing resources; second, promotion of the development of tourism. Homestays will actively mobilize the idle housing resources and labor force to improve the usage rate of urban and rural idle housing resources. With the boom in China’s real estate market, the vacancy rate in major cities is getting very high. According to the China Shared Accommodation Development Report 2018, the overall vacancy rate of houses in major cities is about a quarter. High vacancy rate is especially noticeable in some tourist hotspots, such as Sanya, where the rate is as high as 80% in the low season. Practically speaking, the development level of shared accommodation is still relatively low, and the houses shared through the platform only accounts for about 4% of the vacant housing in our country, leaving great potential to be tapped. Homestays have developed rural tourism resources greatly and promoted the economic development of Chinese countryside. Take Moganshan Town, Deqing County, Huzhou City, Zhejiang Province as an example. The homestay development of Moganshan has its unique advantages. Geographically, Moganshan is located

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between Shanghai and Hangzhou, a very suitable destination for a self-driving tour. Ecologically, Moganshan as a branch of Tianmu Mountain has a 4A National Tourist Attraction. In market positioning, Moganshan can attract white-collar workers and inbound tourists who come from the Yangtze River Delta for leisure and vacation purposes. These people hope to break free from the fast pace of urban life in their spare time to return to nature in pursuit of rural life. Taking high-quality homestay as one of the development directions of rural tourism, Deqing County government has proclaimed relatively loose policies on the reconstruction of old houses, and established a homestay institute Minshuku college of Moganshan. According to the data of Moganshan Town, by July 2019, there had been more than 700 homestays and nearly 10,000 beds in the town. In 2018, the town received 2.6 million tourists with tourism earnings of nearly 2.5 billion yuan. Among them, the homestays received 2.1 million tourists, and gained earnings of 2.05 billion yuan, more than 80% of total tourism revenue. 2. Conflict with public resources The extraordinary popularity of the homestay market contributes significantly to urban tourism, flexible employment and destocking of idle resources. However, the springing up of so many homestays and the influx of tenants begin to have adverse impacts on the community environment, especially the nuisance of noise made by customers, strangers’ entering and leaving the community, and the occupation of community public resources (such as parking garage) in peak season. For example, since the summer of 2018, there have been frequent disputes between homestay operators and owners in many residential districts dense with homestays in Chengdu and Chongqing. According to the July Operation Analysis Report of Chengdu Network Management Platform released by Chengdu Big Data and e-Government Administration Office, the number of complaints about homestays in residential areas reached 116, making the industry a complaint hot spot. The complaints mainly focused on the nuisance caused by homestay tenants and the conflicts between tenants and the property management. There are many reasons for the conflict between community and homestay, including the lack of necessary communication between homestay owners and community residents, low community participation, no self-restraint and tenant restraint, and lack of platform responsibility. Urban homestay provides accommodation services through the Internet platform, so it has the typical characteristics of networking. However, many community residents and grass-roots management departments, because of their insufficient understanding of this business model, tend to equate homestays with shady hotels and group rented houses, causing tension between the community and homestays. For this new business model, it is impossible to apply the traditional hotel supervision, which also makes the supervision of home accommodation difficult.

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6.1.3 Defects of Self-governance of Accommodation Sharing Platforms The summary above of the characteristics and current potential problems of the self-governance of the homestay platform yields the following defects: (1) The entry threshold of the platform is not uniform, which is easy to cause blurred boundary. (2) There is a lack of mandatory and punitive norms within the industry. (3) There are loopholes in the social credit system and malicious evaluation is difficult to avoid. (4) The resistance of traditional enterprises in the same industry cannot be avoided.

6.2 Coordination Between Self-governance and Government Governance of Accommodation Sharing Platforms Accommodation sharing platforms have formed a preliminary self-governance system, but the above analysis has pointed out that the current international government regulations on the sharing economy platform are mainly ascribed to the negative externality of sharing economy, the lack of access threshold and tax regulation, and the unfair competition between traditional enterprises and sharing enterprises in the same industry. What is to be discussed next is the coordination between government governance and self-governance of shared accommodation platform mainly from such policy aspects as access, taxation of shared accommodation platform.

6.2.1 Collaborative Governance Between the Government and Accommodation Sharing Platform Enterprises 1. Externalities The emergence of externalities is one of the main reasons for the government’s regulation of the market. Market failure caused by externalities stems from the ambiguity of price information about external costs and the absence of markets where transaction can be realized (Arrow 1969). Yu and Li (2016) elaborated the intergenerational resource externalities and environmental externalities, among which the intergenerational externalities are caused by resource depletion and insufficient intergenerational compensation, while the environmental externalities are caused by the wide cost coverage which is difficult to be included in internal accounting of enterprises. A major solution to the intergenerational externalities and environmental externalities of accommodation sharing is to make full and effective use of the idle housing

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resources that have been developed, rather than to meet the market requirements by developing new land resources like the traditional hotel model, which is more reflected in the fluctuation of accommodation demand in tourist cities, attributable to the obvious characteristics of peak and valley tourism seasons. In the peak season, it is often difficult to get book a room. At this time, the idle houses of residents enter the market, which will increase the supply of accommodation and relieve the pressure of short-term high demand on local accommodation supply. In the off-season, idle houses return to the residents themselves, incurring less sunk costs than the idle hotels and reducing the huge waste caused by hotel vacancy. Therefore, the demand for accommodation in tourist cities varies greatly from season to season, making its impact easily felt on the hotel market. Accommodation sharing has a certain buffer effect in this aspect. 2. Tax issues According to the Annual Report on China’s Sharing Economy Development 2019 released by the State Information Center, the transaction scale of China’s sharing economy in 2018 was 2.942 billion yuan, up 41.6% over the previous year. About 760 million people participated in sharing economy and 75 million in the provision of services. The number of employees on the platform was 5.98 million, up by 7.5% year on year. The transaction volume of the accommodation sharing market was 16.5 billion yuan, up 37.5% year on year. From 2015 to 2018, the share of accommodation revenue in the national accommodation industry increased from 2.3% to 6.1%. At the same time, the report pointed out that although the sharing industry is moving in a healthy and standardized direction, there are still problems in taxation and regulation. Along with the boom of the accommodation sharing industry, the supporting tax system should be improved. Homestay transaction is completed through the accommodation sharing platform. The homestay provider will put the housing resources on the online platform, and the demander will obtain the housing information through the accommodation sharing platform and pay the fees to the third-party payment platform. After the accommodation sharing platform deducts part of the commission, the funds go into the supplier’s account, with no other taxes to be paid. In the tax law, the subject of tax payment mainly refers to the individual or unit directly liable for tax payment, while the provider of shared accommodation gains profits through house sharing but does not pay the related tariff fee, which violates the fairness principle of the tax law. There are many landlords on the sharing platforms, and at present, China’s landlord qualification identification in the sharing industry is still in its initial stage, the landlord’s tax and business registration are not perfect, and most of the registered landlords belong to small-scale taxpayers.4 How the tax authorities can identify the operators of shared accommodation as the subject of tax payment is the key. 4

Small-scale taxpayer refers to the VAT taxpayer whose annual sales are below the prescribed standard and whose accounting is not sound and cannot submit relevant tax information according to the regulations. Since July 1, 2014, the VAT rate for small-scale taxpayers has been uniformly adjusted to 3%.

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At present, taxation of homestay landlords has been attempted in some areas, but preferential tax policies are still the first consideration to encourage the development of the industry. For example, Shenzhen’s new preferential tax policy in 2019 raised the threshold for quarterly sales to 300,000 yuan. Only small-scale taxpayers whose sales exceed 300,000 yuan need to pay taxes. For most ordinary landlords of individual homestays, their sales are below this standard, so a lot of costs have been saved through this policy. More than 300,000 homestay operators can pay taxes online and have invoices issued through third-party payment platforms such as Alipay and WeChat, which greatly facilitates the handling of tax business.

6.2.2 Collaborative Co-governance of Accommodation Sharing by the Government, Platforms and Society In addition to government governance and platform self-governance, the collaborative governance of the accommodation sharing platform from all walks of life can also help the platform achieve sustainable development, the extensive participation and supervision of the society being an indispensable part of the platform operation. Figure 6.2 reflects the thoughts of the platform, the government and the society on the co-governance of the accommodation sharing platform, in which the internal norms of the industry are the basic requirements and the core part of the selfgovernance of shared accommodation, designed to maintain market vitality and stimulate industry innovation through self-governance. The government is between the public and the platform. On the one hand, it protects the platform and the participants of the accommodation sharing. On the other hand, it regulates the operation of the platform, supervises, and punishes the behaviors that violate the rules and regulations of the platform, and ensures a fair competition market. Th social public in the outermost sector is the broadest participants, including landlords, tenants, others in the community, etc. They are the specific implementers of sharing behavior, and their supervision and evaluation has become an important part of information feedback. As direct reflections of the experience of the safety of housing resources, many negative evaluations of housing resources can assist the accommodation sharing platform conduct a real-time supervision for the improvement of homestay operators’ service quality. Through the collaborative co-governance of the society, the government and the platform enterprises themselves, the accommodation sharing platform can help realize orderly and fair competition, maintain the innovation and vitality of the market, and enhance the recognition and attraction of users to accommodation sharing.

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Industry internal norms for accommodation sharing platforms

Marketability Equity

Government protection and supervision of accommodation platforms

Safety Public participation, evaluation and reporting

Fig. 6.2 Collaborative co-governance of shared accommodation

6.3 Self-governance of Urban Office Sharing Platforms The office sharing platform also belongs to the house sharing industry. Its target customers are no longer individual consumers, but small and micro enterprises, branches and offices of large enterprises and entrepreneurs of small teams. As a sharing platform connecting with a wider range of resources, the office sharing platform is also known as flexible office, short-term office rental, co-working space, maker space or mass maker space, such as WeWork office sharing originated in the United States. As can be seen from the financing obtained by China’s office sharing enterprises from 2018 to 2020 (Table 6.2), the office sharing industry continued to maintain rapid development, in spite of an obvious decline in the overall investment and financing of the sharing economy industry. Table 6.2 Some financing events of office sharing 2018–2020 Enterprise

Time

Round

URWork

2019.04

Strategic financing

>2

2018.11

D series

2

Kr Space

Sum (100 million US dollars)

2018.08

Strategic financing

3

2018.02

Strategic financing

1.1

2019.05

Strategic financing

10

2018.06

B series

3

2018.01

Pre-B series

6

WeWork China

2018.07

B series

5

Nashwork

2020.04

Strategic financing

Undisclosed

2018.06

B+ series

5

2018.08

C series

1.2

2018.03

B+ series

3

Mydream+

Source: Skyview https://www.tianyancha.com/

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Co-working has unique advantages in terms of flexibility and sociability. In terms of flexibility, most office sharing spaces usually have flexible choice in planning, cost and space. For example, the rent of a shared office can be paid annually, monthly or even daily. This flexible choice allows enterprises to adjust the number of offices needed in real time according to demand, since most small and micro businesses and startups are uncertain about how many employees they will have in the next three months or more. Different from a rented shared office space, traditional offices need to maintain the facilities of the office space and pay the cost. In a shared office space, wireless Wi-Fi, printing and scanning, afternoon tea, kitchen, meeting supplies and other on-site support are realized by the office sharing platform, which greatly simplifies the operation of enterprises. From the perspective of social interaction, start-up enterprises need to connect a lot of resources to help their development. In addition to providing offices, shared office space also creates a lot of social opportunities for enterprises. For example, office space provides opportunities for enterprises to establish contacts with partners by holding salon activities. In addition, being in a space with other startups is more likely to attract angel and venture capital. However, despite the advantages of flexibility and sociability, there are inevitable downsides to shared working spaces. First, the spaces offered by shared office platforms lack personalization and branding, with companies unable to customize their walls, furniture, lighting, and other decor to reflect the company brand. Second, it is easy for companies to get closer to their competitors. In an open seating culture, companies need to be more careful about maintaining internal private information. Finally, as the culture of the office sharing platform interacts with corporate culture, it is easy for the culture of different enterprises to converge, making it difficult to build a unique corporate culture. In view of the unique advantages and disadvantages of the office sharing space, this section provides some references for the development and governance of the office sharing industry by studying in detail the self-governance model of the office sharing platform and the collaborative co-governance between the government and the society.

6.3.1 Self-governance Content of the Office Sharing Platform The office buildings in China’s real estate market have fully entered the stock pattern, and the demand of enterprises for the office market is still increasing year by year, which promotes the sequential increase of office rent in first-tier cities. In 2017, the new demand for office space in China exceeded 6 million square meters.5 Many first-tier cities such as Beijing, Shanghai and Shenzhen are still the first choice for enterprises to start their own businesses. This kind of demand provides great space for the development of office sharing platforms. 5

Source: China’s Real Estate Market Outlook 2018—Office Segment, CBRE.

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1. Expected revenue of office sharing platforms The explicit source of revenue for co-working platforms is rent. Compared with traditional office buildings, the rental method of shared offices is more flexible and the rent is more affordable. Therefore, co-working platforms are attractive to small and micro enterprises, individual entrepreneurs and offices of large enterprises. Shared offices create the appreciation of space, earn the difference in rent through service, creativity, transportation, differentiation and so on to. For example, a Grade B office building whose rent is 5 yuan/(m2 /day) is transformed into a shared office, its rent can reach 7–12 yuan/(m2 /day), or even higher.6 For example, the Walnut Co-office in Chengdu, Sichuan Province, is positioned as “cool and fun”. Through its own channels, it can meet the needs of office workers for eating, drinking, entertainment, and shopping. Employees in the company can choose and buy dishes in its online mall while at work and take them home after work. All of Walnut’s current earnings come from rent, and such things online mall, interactive physical exercise, resource sharing are just value-added services that come from workspace rentals, which have brought a high occupancy rate of over 80% per store. So, the co-working “desk” is just an entry point, and the co-working will try to meet the demands of all aspects of life in the workplace. A hidden benefit of the office sharing platform lies in the positive externality brought by the improvement of office space to the nearby business environment, which creates new cooperation opportunities for the office sharing platform. Take Kr Space Tianlin Community Shanghai launched in July 2017. This office sharing community was renovated from an old factory, with a shared hall for leisure and socializing, as well as effectively separated work areas, meeting rooms and so on. Different from the traditional office space, the shared hall of Kr Space reflects the design concept of work integrated into life and future space. It fully creates a casual atmosphere through comfortable sofas, creative design of the coffee table and the water bar area equipped with top coffee machine, refrigerator, drinking fountain, microwave oven, ice maker, etc. All furniture and equipment are fitted according to the home standard, hoping to make the people working here relaxed. The agglomeration effect of this creativity has attracted many excellent partners to Kr Space (such as its strategic partnership with Jinhe Business), and has also led to the development of businesses near Tianlin Community in Shanghai’s Xuhui District. A visit to Tianlin Community7 shows that abundant and high-quality catering, fitness and entertainment projects gather around the location of the office sharing platform, and most of the customers are white-collar workers working in the shared office of Kr Space. Compared with traditional office buildings, office sharing space looks more modern, technological, and dynamic, representing an open culture of inclusiveness and vitality, so it is more attractive to young professionals. At present, there are 6

Source: Sohu finance: http://m.sohu.com/news/a/213214171_456914. Note: Kr Space Tianlin Community is located at No. 130, Tianlin Road, Xuhui District, Shanghai, in SVA Cross-boundary Creative Park, one of Shanghai creative industry parks.

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Table 6.3 Major profit models for five kinds of co-working Type

Profit model

Industrial co-working

Rent + intermediary service fee + value-added service fee + income commission

Property co-working

Rent + property fee + value-added service fee

Incubated co-working

Rent + value-added service fee

Flow co-working

Rent + value-added service fee + investment dividend

Integrated co-working

Lower proportion of rental income and diversified profit model

five types of co-working models, and the corresponding profit models are shown in Table 6.3. 2. Expected cost of office the sharing platform Different from other platforms that are simply information providers, an office sharing platform will renovate the rented office space to make it more in line with the preferences of incoming enterprises and young people, with, for example, more relaxing and natural office environment, retro or Nordic minimalist cultural atmosphere, and space layout conducive to stimulating creativity. For small and micro enterprises, the high rent of office buildings in first-tier cities in China accounts for a proportion of the costs of many enterprises. The most obvious advantage of office sharing is that it can save enterprises the cost of rent to a certain extent, so it has become the first choice to many small and micro enterprises. Compared with other sharing platforms, an office sharing platform requires more initial capital investment for renovation. At the same time, many office sharing platforms also serve as entrepreneurship incubation, which requires the platform to be more than just a desk, but also to provide the information of investment and financing for the start-ups in residence and help them survive the incubation period. This sets higher requirements for the office sharing platform, thus pushing up the operating costs of the office sharing platform to a certain extent. 3. Internal specifications of the office sharing platform The internal specifications of China’s office sharing platforms are represented by the Mass Maker Space (Co-working) Service Specification (hereinafter referred to as the Service Specification). The Service Specification was drafted in 2017 by 11 leading Chinese co-working companies, including Ucommune Beijing Venture Investment Co. Ltd., Beijing Venture Commune Investment Development Co., Ltd., Chengdu Xiakedao Information Technology Co., Ltd., Woo Space (Beijing) Office Services Co., Ltd., Hongtai Innovation Space (Beijing) Venture Capital Co., Ltd., Krypton Space (Beijing) Information Technology Co., Ltd., Nashi Space Venture Science and Technology (Beijing) Co. Ltd., Shanghai Zhongweizi Entrepreneur Services Co., Ltd., Shanghai Molin Network Technology Co., Ltd., Shanghai We Plus Technology Co., Ltd., Shenzhen Wedo Lianchuangshe Technology Co., Ltd.

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Extracting and sorting out some contents from the Service Specification for office sharing space, Table 6.4 shows that this document has detailed specifications on the operation threshold and content. It can be seen from these details that compared with traditional office buildings, shared office provides more than just an office space; it provides help for the development of small and micro enterprises and entrepreneurial with multi-directional services, and has more humanistic care and a modern atmosphere. 4. Institutional supply advantages of the shared office platform From the perspective of the expected benefits, costs, and internal specifications, there are some rules to follow in the office sharing platform. Simply put, from leasing, renovation to rental, the platform has gradually broken through its previous role as a sub-landlord dealing in batch retailing. The most basic logic of its system supply is to create space appreciation through service, creativity, operation, differentiation, etc., and gain profits through rent difference within the scope of industry specifications. Seen from the property of shared office, many office sharing platforms are not simply real estate leasing companies, but an aggregate of shared office, investment, and real estate trust. WeWork, for example, earns about $800 million a year in real rent but has a $20 billion valuation, with more than 90% of its revenue coming from investments. WeWork’s investment target enterprises can provide other customers with more than 20 types of business services including finance, advertising, brand strategy, business operation, management consulting, legal services, mobile development, programming, etc. These companies further improve the service ecology of the platform, which has obtained corresponding equity dividends. Since its inception, WeWork has invested in more than 90 companies, 21 of which are listed on Nasdaq. Office sharing turns the asset attribute of office space into service attribute, from a rent-oriented business model to a traffic-oriented one, and from a real estate company to a platform. As a sharing platform, it should provide integrated and multiple services for incoming customers, and turn it into a service model that can be exported. At present, many office sharing platforms are developing in this direction. For example, Inncube Co-working Space has got more than 5% of its earnings through the member service system; Kr Space has gained more than 20% of the revenue through incubation services, advertising sales, membership system, etc.; Urwork has got nearly 8% of its non-desk revenue by selling membership packages that include things like the use of meeting rooms; by taking advantage of its international tenant base, DayDayUp has attracted the French Embassy, BMW and other external companies to hold themed social gatherings and product promotion activities in its office space through the rental of external event venues. This comprehensive service model forms the unique institutional supply advantage of the office sharing space. 5. Credible commitment and mutual supervision of the office sharing platform In terms of credible commitment, compared with other sharing platforms, the office sharing platform has a stronger ability to control the supply of office space, because it is not only a platform to provide information, but also includes in its functions the

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Table 6.4 Excerpts from the Mass Maker Space (Co-working) Service Specification Internal specifications

Specific standards

Main operating conditions

1. A registered legal person qualification certificate (with a complete set of industrial and commercial, tax and other supporting documents) 2. Perfect infrastructure, operation team, operation mechanism and the ability to carry out innovative and entrepreneurial activities

Operating site conditions

1. A site environment that conforms to the national standards GB/ T18883 (Indoor Air Quality Standards), GB/T24421 (Service Organization Standardization Work Guide), GB/T10001 (Public Information Graphics Standards), GB/T31592 – 2015 (Fire Prevention Safety Engineering), GB50763-2012 (Barrier-free Design Code) and other requirements 2. An office space 3. Public service venues, including reception area, project display area, conference room, leisure activity area, professional equipment area and others 4. Free or low-cost Internet access and network office services 5. Basic office conditions such as shared office facilities 6. Regular supply of heating and refrigeration equipment in all regions 7. Separate male and female toilets, well-equipped, clean and hygienic 8. Front office reception and duty desk 9. An interactive online platform 10. Firefighting equipment, with fire indication signs and easy access 11. Site facilities, equipment and supplies in compliance with national and local requirements 12. Normal operation of a fresh air system

Service team

Management, coaches, service personnel, entrepreneurship mentors

Operation management mechanism

Move-in, incubation, graduation, exit, tracking

Services offered

Registered agent, policy docking, networked office, site provision, entrepreneurship salon, business planning, venture capital docking, project roadshow, crowd-funding services, independent investment, financial consulting, strategic consulting, market channels, human resources, entrepreneurship training, market research, network promotion, exhibition services, legal consulting, intellectual property, fiscal and tax services, media cooperation, crowdsourcing services, property services, etc.

Characteristic services

Interactive sharing platform, business school for entrepreneurs, integrated business and travel facilities, shared book bar, sleeping warehouse, shared phone booth, unmanned supermarket, etc.

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overall operation and management of office space, quite like a sub-landlord, not just an intermediary. Therefore, when users who rent office space face problems, they do not need to approach the original landlord, but directly feed back to the platform to get a quick and effective solution. The credible commitment of office sharing platforms also applies to landlords. Instead of bothering themselves with such follow-up services as concerning a series of property problems after the house is leased. Instead, landlords can leave their houses totally in the care of the platforms, for which greater power means greater responsibility. Therefore, office sharing platform enterprises need to establish a good internal credit system to ensure that the platforms can operate large-scale assets in accordance with laws and regulations, and effectively connect with the supply side and demand side of resources. In terms of mutual supervision, the services provided by the office sharing platform for small, micro enterprises and startups are diversified. Moreover, because it is targeted at enterprise customers, the substantial benefits brought to them will directly improve the stickiness of enterprises’ demand for office space. The rental of shared office is more flexible than the traditional office and requires less deposit, so the enterprise has a wide range of choices. Since the sunk cost of replacing the office space is lower, it is easy to withdraw a lease contract, once the situation is not satisfactory. Therefore, different from other sharing platforms that rely on price evaluation, the feedback of shared office is more reflected through the renewal rate of office space. The higher the renewal rate of the office sharing platform, the higher the satisfaction of the settled enterprises on the office space. The renewal rate has become one of the main competition indicators of each office sharing platform enterprise. Compared with other sharing platforms that rely on artificial evaluation, this index is more objective and closer to the market. It can more truly reflect the changes in market demand and the service quality of the platform. At the same time, it avoids the negative problems brought by subjective evaluation, such as malicious reviews and the presence of online hirelings. For example, the official renewal rate of Mixpace is about 60%, with an annual rent increase of about 8%,8 and the renewal rate of Shanghai Servoffice International is about 85%.9

8

Data source: Mixpace official website (https://www.mixpace.com.cn/?source_code=iq4p4y 7ymi#/). 9 Data source: Servoffice official website (https://www.servoffice.kbgok.com/s7).

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6.3.2 Coordination and Conflict Between Shared Office and Urban Public Resources 1. Coordination with public resources Office sharing has optimized the structure of urban construction through its renovation of old communities, promoting their functional transformation and economic development. Take Kr Space Tianlin Community as an example. Before its renovation, it was the former site of Shanghai Aerospace Control Engineering Research Institute. After the institute moved to Space City, Minhang District, Shanghai, the original factory was abandoned, leaving behind a relatively old and dilapidated community environment around it. After the establishment of Kr Space Tianlin Community, the original surroundings were transformed. With many young people gathering here, the community gradually changed the surrounding community environment and business environment. For example, with the community as the core, such commodities as fashion, catering, entertainment that meet the preference of young people gradually increased, driving the commercial development of the whole area. In the 10 years since the rise of mobile Internet, the business form, model and management method of enterprises have undergone major changes: small studios and partnership institutions are on the rise, staff management is getting more and more humanized, and work schedule is getting increasingly flexible. All these require personalized office space, which cannot be offered by traditional office buildings. Co-working matches its personalized supply with personalized demands, realizing a real change in office space and time. 2. Conflict with public resources To increase their market share, many office sharing platforms persisit in expanding their scale so as to deviate from the sharing idea of limited integration of idle resources and become sub-landlords in the traditional leasing model. The Internet economy emphasizes diminishing marginal cost, and, ideally, the later expansion cost is almost zero. However, one extra office space for too many office sharing platforms means an increase in the costs of design, construction, and maintenance, which cannot be significantly reduced with the growth of their volume, resulting in the loss of the efficiency in social resource allocation. WeWork added 97 new office spaces in the first half of 2019, each costing an average of $2.63 million for design and construction, according to WeWork’s financial report. If it continues to expand, more office spaces will also mean higher costs. To increase earnings, we need to raise rent, but with a lot of competitors in the market, raised rent will inevitably lead to a loss of market share. In addition, the current profit channel of office sharing mainly comes from rent difference. Therefore, compared with the office rented out by the landlord at the original price, the sub-landlord charges higher rent after simple renovation, which undoubtedly pushes up the office cost for the enterprises.

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6.3.3 Defects of Self-governance of the Office Sharing Platform The above analysis shows that the self-governance of the office sharing platform still has the following three problems to be solved. (1) Excessive competition in a limited market leads to resource waste. (2) The effect of positive externalities of shared office space on the surrounding environment is not reflected in the platform income. (3) The office sharing model simply relies on rental income, which will lead to a long cost recovery period, and the model of relying on investment for income is divorced from the essence of sharing economy.

6.4 Collaboration Between Self-governance of Office Sharing Platforms and Government Governance Compared with other sharing economy platforms, office sharing platforms developed relatively late. At present, the government has a number of special policies on the platforms, which is briefly summarized as follows.

6.4.1 Collaborative Governance Between the Government and Office Sharing Platforms 1. Entry issues of office sharing platforms At present, no standardized entry system has been established for the office sharing platform. From the perspective of industry self-governance, self-governance mainly makes some specifications concerning business license and operating conditions but does not clarify the entry threshold for a business entity. The number of office sharing platforms is large with fierce competition. According to the 2018 China Co-Working Vitality Index Report, by the end of September 2018, there had been more than 300 co-working platforms in China, with more than 6000 outlets, a total operational area of more than 12 million square meters, and 2 million working stations. If there is not much of an entry threshold, it is easy to cause excessive competition between platforms. Therefore, the entry threshold is the first issue to be considered in collaborative governance. As a capital- and technology-intensive enterprise, the office sharing platform requires more capital investment than the accommodation sharing platform, which itself forms a certain capital threshold and can block the entry of some potential enterprises. However, one entry rule that the government still needs to check should be whether the sharing platform to enter the market reuses urban idle space and exerts an

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obvious effect of positive externalities on the surrounding community environment. Since the essence of sharing lies in the reuse of idle resources, if an enterprise persistently increases the development of new resources under the name of sharing, then it is not sharing economy in the real sense of the term. This needs to be confirmed by the government when issuing business licenses. 2. Tax issues of office sharing platforms Different from other sharing economy platforms, the revenue of the sharing office platform is relatively large, so they can be taxed as ordinary business enterprises. However, since it has an obvious effect of positive externalities on the surrounding communities and business environment, it is impossible for the platform enterprise to obtain the benefits brought through the positive externalities. Therefore, the government needs to consider subsidize the platform enterprise through tax exemption and other means from the perspective of positive externalities, so as to encourage the platform to make contributions to improving the surrounding environment of the community.

6.4.2 Collaborative Governance of Co-working by the Government, Platforms and Society The purpose of collaborative governance is for enterprises, governments and communities to shoulder social responsibilities together. As an emerging industry, the office sharing platform requires industry participants to shoulder social responsibilities together, cultivate market rules and industry norms together, and have positive interactions with local communities and governments. The number of shared offices can indirectly reflect the innovation and activeness of a city. More shared offices mean that the city has more creative enterprises and talents and is more dynamic. Therefore, shared offices can reflect the future economic innovation potential of the city. The government governance of office sharing platforms should be more focused on supporting and promoting fair competition. In view of the reuse of idle resources and the reallocation of resources in peripheral communities, the government can support the development of office sharing platforms by various means, such as subsidies, tax breaks, talent introduction and enterprise promotion, so as to provide a good environment for innovation and entrepreneurship of small and micro enterprises. Surrounding communities can focus on building a series of supporting projects that serve the office space with the office sharing space as the center, thus stimulating employment on the one hand and generating revenue on the other. The public and shared office staff can also participate in the exchange activities held by the office sharing space to increase their understanding of the platform enterprises, find problems in time and give their feedback.

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References Arrow, K.J. The Organization of Economic Activity: Issues Pertinent to the Choice of Market Versus Non-market Allocation. Joint Economic Committee of Congress, 1969. Gou, Z. A preliminary study on government regulation of sharing Economy in the United States[J]. Forum of Administrative Science, 2017 (10): 58–62. Liu Guohua刘国华, Wu Bo吴博. Sharing Economy 2.0: Disruptive Changes for Individuals, Businesses, and Society. Beijing: Enterprise Management Publishing House, 2015. Mao, X. Tax Regulations of Part-time Income under the Sharing Economy: Discussion on French Sharing Economy Tax Act [J]. Local Finance Research (in Chinese), 2018 (7): 36–42. Wang, P., Tian, T. On the tax collection and administration under the “sharing economy” model of our country [J]. China’s Collective Economy (in Chinese), 2018 (31): 110–111. Yu Lihong于立宏, Li Jiachen李嘉晨. Listed enterprises’ performance under the constrains of duel externalities. China Population, Resources and Environment, 2016 (4): 63–72.

Chapter 7

Multi-dimensional Collaborative Governance of Urban Ride-Sharing Platforms

In 2016, bike-sharing enterprises led by Mobike and ofo and car-sharing enterprises led by TOGO and EVCARD were the first to enter China’s ride-sharing market and developed rapidly across the country. Then, with the continuous emergence of major platform operators, the competition in the respective industries of bike-sharing and car-sharing entered a heated stage. By the end of 2018, few bike-sharing enterprises survived in the market. After less than two years of operation, Mobike, which had intended to grow bigger and stronger in the market as an industry leader, was acquired by Meituan in April 2018 and officially renamed Meituan Bike. Many companies such as Bluegogo, Wukong and Xiaoming closed down, and ofo was caught in the “deposit refund” storm. In the same year, Didi Chuxing terminated its hitch service due to the murder case of its driver, and TOGO was also hit by a storm due to difficult refund of deposit and many of its services were suspended. As an important part of the sharing economy, bike sharing and smart travel experienced a trough in the industry. This chapter focuses on the car-sharing and bike-sharing in the ride-sharing industry, studies and analyzes the self-governance of ride-sharing and its cogovernance with the government and society, hoping to find out the crux of the problems in this industry, and come up with a multiple-dimensional collaborative governance mechanism for the ride-sharing platform.

7.1 Self-governance of Urban Car-Sharing Platforms Urban car sharing also known in many fields as “short-time vehicle rental”, is thus named because of its operation model, but it is not the only model. Take EVCARD as an example. This platform is a short-time electric vehicle sharing rental project carried out by the Electronic Vehicle Operation and Service Co., Ltd. of Shanghai International Automobile Mall Development Co., Ltd. It offers services, ranging from short-time rental (0.5–2.1 yuan per minute), night rental (80–360 yuan per time), © East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_7

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day rental (80–549 yuan per day), to long-term rental of 1–5 years. The platform also provides users with additional services such as full self-help rental and return, comprehensive insurance and 24-h rescue. Operating currently in more than 65 cities, with more than 13,000 outlets and more than 50,000 new energy vehicles in operation, EVCARD receives more than 1.8 million orders every month and has more than 6 million registered members.1 It can be seen that the current car-sharing market is huge and has great potential for further development. The following is a detailed analysis of the expected benefits, costs, internal specifications, supply system advantages, credible commitment and mutual supervision and other self-governance contents of car-sharing platforms.

7.1.1 Contents of Self-governance of Urban Car-Sharing Platforms By analyzing the self-governance contents of the car-sharing platform, we can find the advantages of the operating mechanism and supply system of the platform as well as the difficulties and problems in its self-governance. 1. Expected revenue of the car-sharing platform The main revenue of the car-sharing platform comes from its rent. At present, carsharing enterprises are mainly divided into two categories. One has the background of car enterprises or state-owned enterprises, such as EVCARD, Beijing Automobile Group GreenGo, Liancheng Sharing, Daimler Car2Share, etc. These enterprises mainly adopt the asset-heavy operation mode, with all the operating vehicles owned by enterprises, providing users with services, like supporting charging services and reservation. The other is Internet-based enterprises, such as TOGO, PonyCar and other companies. These enterprises feature strong Internet genes and asset-light operations. In other words, the enterprise platforms mainly provide vehicle rental services, but the vehicles are not completely owned by the operation platforms, so there is no need to bear the risk of too much heavy-asset depreciation allocation and devaluation. A comparison of the prices of shared cars of the two operating models shows that the profit cycle of the car sharing platform is relatively long due to the current charges, and the market price of the first model is slightly higher than that of the second model. According to the prices released by EVCARD (Table 7.1), the pricing method is mainly affected by vehicle type and leasing method. However, because it has its own assets, it is relatively stable and has strong control over fixed assets. Compared with other more typical sharing platforms, this asset-heavy sharing platform does not have a higher threshold, because it can rely on the existing assets of enterprises and leasing them instead of selling them, but it also faces the problems 1

Source: EVCARD official website (https://www.evcard.com/about/).

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Table 7.1 Price list of EVCARD time-share rental Model

Range/km

Price/(yuan/min)

Daily package price

BMW i3

180

2.1

–

Roewe ERX5

320

1

≥ 120

ZINORO 1E

120

1.1

≥ 360

Zotye E200

120

0.6

≥ 219

Roewe Ei5

301

0.7

≥ 110

Chery EQ

150

0.5

≥ 180

BAIC EC180

156

0.5

≥ 180

BAIC EV160

150

0.5

≥ 180

Haima Freema

150

0.5

≥ 180

JAC iEV7

165

0.5

≥ 180

Changan Benben

180

0.5

≥ 180

JAX iEV6e

150

0.5

≥ 180

of less flexibility and a long period of cost recovery. Therefore, the expected earnings of such car-sharing platforms mainly rely on large-scale operation, enhanced brand power through scale, and better performance in basic delivery to improve user experience. As for the second type of Internet rental platforms, they do not completely own vehicle property rights, but cooperate with leasing companies and financial leasing companies, utilize the stock resources of the original car rental companies, and integrate with the Internet platform to conduct their business. These asset-light platforms are more flexible than EVCARD, with a shorter profit cycle. For example, the strategic cooperation between PonyCar and BAIC Mobility, a subsidiary of BAIC Group, has achieved the overall profit of one single city of Shenzhen in a short time, with a gross profit rate of about 20% (see Table 7.2 for PonyCar’s short-time car rental prices). As seen from the two tables above, the average duration rent of EVCARD is 0.75 yuan/minute, while the average mileage rent of PonyCar is about 1.06 yuan/km, and its average duration rent, 0.08 yuan/min. The prices of these two kinds of car-sharing services are lower than those of ordinary taxis. Compared with EVCARD, an operation platform like PonyCar in the asset-light model is prone to be restrained and restricted by car rental companies. Moreover, it is difficult to fully acquire the trust of users because of the lack of complete quality control of shared cars, with more uncertain factors. For example, in January 2019, due to business adjustment, policy and market impact, as well as the annual inspection of some vehicles, PonyCar suddenly removed all the shared cars from the user’s end of its platform, resulting in the freeze of many users’ recharge balance and their inability to withdraw cash. TOGO also faced a widespread tide of deposit refunds in 2018. As a result, a large number of users could not get their deposits back due to the break of the capital chain, and both car supply partners and ground staff and operation and maintenance staff were owed back pay.

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Table 7.2 Price list of PonyCar short-time rental Vehicle type

Number of seats Short-time rental price

Zotye E200

2

Peak time (08:00–24:00): 0.80 yuan/km + 0.10 yuan/ min Off-peak time (24:00–08:00): 0.80 yuan/km + 0.02 yuan/min

JAC IEV6E

5

Peak time (08:00 – 24:00): 1.00 yuan/km + 0.10 yuan/ min Off-peak time (24:00 – 08:00): 1.00 yuan/km + 0.02 yuan/min

BAIC EV160

5

Peak time (08:00–24:00): 1.00 yuan/km + 0.17 yuan/ min Off-peak time (24:00–08:00): 1.00 yuan/km + 0.02 yuan/min

BAIC EU260

5

Peak time (08:00–24:00): 1.30 yuan/km + 0.20 yuan/ min Off-peak time (24:00–08:00): 1.30 yuan/km + 0.02 yuan/min

BAIC EC180/EC200 5

Peak time (08:00–24:00): 1.20 yuan/km + 0.10 yuan/ min Off-peak time (24:00–08:00): 1.20 yuan/km + 0.02 yuan/min

A comparison of the two profit models shows that the asset-heavy model of carsharing has the advantages of robustness and sustainability, while the asset-light model has more flexibility and a shorter payback period, but also higher risk. Different from other shared products, the car itself has a higher value, so the platform needs to bear higher risks to ensure the sharing of high-value products. For this reason, most of the current operating car-sharing platforms charge users a deposit of varying amounts, such as 699 yuan for GoFun, 1000 yuan for EVCARD and 1500 yuan for TOGO. The initial purpose of charging the deposit is to reduce the malicious damage to the cars and reduce the risk of the company. However, research shows that the deposit has become the main means of activating capital, investment, financing and even profit for car-sharing platforms. Due to widespread controversy and ambiguity about the use of funds, some platforms, such as Yidu, Urcar, and Jiabei, have waived deposits in order to regain trust and increase their market share, while GoFun cooperates with Alipay, allowing Alipay users with a sesame credit score of more than 700 to apply for a deposit waiver. The exemption of deposit, on the one hand, allows enterprises to return to the essence of operation, but on the other hand, the imperfect social credit system also brings higher risks to car-sharing platforms. 2. Expected costs of car-sharing platforms Since the resources connected to the platforms are cars, which are of higher value than other shared products such as power banks, bikes and offices, the expected cost

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of car-sharing platforms mainly includes the initial cost of obtaining the right to use or ownership of cars and the variable cost during the operation of the platforms. At present, the shared cars operating in the market are mainly new energy vehicles, and the initial cost mainly comes from how to obtain the right to use the cars. In the asset-heavy mode, car-sharing platforms will directly own the property right of the cars, including ownership and use right. For example, the cars operated by EVCARD mainly come from the investors Shanghai Automotive Group Co., LTD, and Shanghai International Automobile City (Group) Co., LTD. In the asset-light mode, the upfront cost is from the platforms’ acquisition of the right to use the vehicles either through purchasing them at a low price or by lease, through strategic cooperation with automobile OEMs. For example, PonyCar has carried out brand strategy upgrading, reached strategic cooperation with a number of automobile OEMs, and explored the joint operation model of “ride sharing platform + automobile OEMs”. There is also a common upfront cost for the two models of car-sharing platforms, namely the layout of car charging facilities and the layout of parking lots in urban space. The density of charging facilities and parking lots will directly affect user experience of shared cars. At present, in addition to using its own funds to lay out charging facilities and parking lots, the platform will also enhance its operational efficiency and user experience and reduce its own costs by strengthening its cooperative relationship with operators of charging piles, smart parking and other services. The maintenance cost of car-sharing platforms mainly comes from the maintenance cost of cars and the service cost in the operation process. The daily maintenance cost of new energy vehicles mainly includes car maintenance and charging. Ordinary users do not need to charge the shared cars for a short-time use, but stop at a fixed charging point after using it. At the same time, the platforms will monitor the electric capacity of each vehicle, and the operator will charge the low-power vehicles in time. As for car maintenance, one of the most important reasons why car-sharing is favored by the majority of those who are driving license holders but do not own cars is that they do not need to maintain their cars by themselves, thus transferring the cost to the platforms. Table 7.3 is a synthesis of the analysis of the income and cost of car-sharing platforms in the above two sections. 3. Internal specifications of car-sharing platforms From the user end, there are generally four steps to hail a car through the car-sharing platform. First, registration and certification: registering through the APP or WeChat mini program, uploading the certification information, and obtaining the vehicle qualification. Second, reservation of a vehicle: searching for the information of a vehicle nearby or reserved and arriving within the specified time at the location of the vehicle. Third, picking up the vehicle at a rental station: finding it through honking or looking for the license plate and other means, obtaining the vehicle code or other unlock password, and starting the journey. Fourth, returning the vehicle at a station: returning the vehicle at the nearest station and paying the fee. From the enterprise side, there are some common services provided by domestic car-sharing platforms, as summarized in Table 7.4. The service standards are mainly

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Table 7.3 Partial comparison of expected benefits and costs of car-sharing platforms Expected benefits

Expected costs

Income characteristics

Income source

Fixed cost

Variable cost

Heavy-asset production model

Relatively stable; Less affected by market fluctuations; Taking a long time to profit; Relying on scale of operation; Uncertainty risk low

Rent; Deposit; Other investment and financing income

Vehicle purchase expenses; Other supporting expenses; Charging points and equipment; Parking lot network layout; Technical input

Vehicle maintenance and repair; Daily fuel/ electricity costs; Insurance claims, after-sales service; Depreciation of assets; Other costs

Light-asset production model

More flexible; Greatly affected by market fluctuations; Taking a short time to profit; Relying on strategic cooperation; Uncertainty risk high

Rent; Deposit; Other investment and financing income

Vehicle leasing expenses; Strategic cooperation expenditure; Charging points and equipment; Parking lot network layout; Technical input, etc

Vehicle maintenance and repair; Daily fuel/ electricity costs; Insurance claims, after-sales service; Other costs

Table 7.4 Basic and additional services of car-sharing platforms Service category

Service contents

Basic services

Short-time leasing; multi-model selection; unrestricted access as applied to new energy vehicles

Additional Services

Full automatic rental and return; full insurance; vehicle return at different nearest locations; 24-h customer service and rescue

Other services

Customer complaint servicea

a To

improve customer experience, EVCARD has launched customer complaint service, which covers customer complaints raised through complaint hotline, network social media and we media, as well as complaints that have been handled by the company’s customer service and other relevant departments, but customers still have disputes over the result of handling.

based on the industry’s internal specification document Car Sharing Credit Travel Guide (Table 7.5), which was released by PonyCar in 2018. The contents contained therein have formed the main specifications and standards of the current car-sharing platforms.

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Table 7.5 Abstract of the core contents of the Car Sharing Credit Travel Guide Category of specifications

Main contents

Civilized vehicle use

Take good care of the vehicle, ensuring that it is hygienic and clean, and do not litter in it; do not spit or throw objects out of the window; yield to pedestrians, do not honk indiscriminately, do not cut in, slow down when crossing puddles; park properly, do not occupy parking lanes illegally, return vehicles to the parking lot recommended on the platform; remember to turn off the lights and shut the windows when returning the vehicle, and take away personal belongs

Honest vehicle use

Do not conceal one’s part in traffic accidents, deal with traffic violations in a timely manner, be ready to bear the corresponding legal responsibilities and compensation; do not take away the public property in the vehicle; do not maliciously occupy a vehicle, do not steal a vehicle or maliciously damage a vehicle; do not reimburse parking fees falsely, pay for an order in a timely manner

Safe vehicle use Car sharing account should be for personal use only; drunk driving is strictly prohibited; do not drive with slippers or high-heeled shoes; no fatigue driving, turn off whenever possible the full beam headlights when driving at night; do not overtake other vehicles by driving against the traffic in a congestion; no overloading; drive safely and properly, comply with traffic regulations and obey the command of traffic police; do not rent a vehicle to engage in illegal and criminal activities

Different from traditional car rental projects, car sharing mainly innovates from the aspects of initial access, way of using vehicles, price calculation and car return. Figure 7.1 compares the main differences between car-sharing and traditional carrenting and finds that the core differences mainly come from the extensive application of the Internet and big data, which has changed the traditional way of car renting and car use. At present, the main problem in the self-service in car sharing is that there is no clear guarantee of the consistency between the actual car renters and the online login information, and there may be cases such as account loaning, fraudulent accounts and driving without a license. Therefore, in terms of security, the manual information verification in traditional car rentals proves to be more reliable. But this shortcoming in car sharing will be properly solved through technological progress, such as the installation of a face recognition system in the car door for a check against the ID information in the online booking system. 4. Advantages of the supply system of the car-sharing platform The advantages of the supply system of the car-sharing platform are as follows: First, it has the technological lead and advocates green and low-carbon travel. Relying on developed technologies such as the Internet, the Internet of Things, and mobile phone smart terminals, short-time rental enjoys the flexibility of car use and price advantage. In addition, most of the shared cars are new energy vehicles at present, reducing carbon emissions and the use of private cars, and integrating limited parking resources. Therefore, the supply of shared cars helps reduce environmental pollution.

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Traditional car rental

Car sharing

Regular gasoline car

New energy car

Pricing by day

Multiple pricing

Phone/on-site reservation

Online booking

Manual information verification

Online information verification

Compensated compulsory insurance

Free insurance

Paid off-site car return

Free off-site car return

Fig. 7.1 Comparison between shared cars and traditional rental cars

Second, it integrates the whole industrial chain and carry out in-depth cooperation among enterprises. Through its cooperation with enterprises of automobile manufacturing, purchasing and recycling, a seamless quadrilateral cooperation model has been achieved. In the whole industrial chain, automobile enterprises, auto finance and car sharing platforms each take their own needs in the upper, middle and downstream, with complementary advantages, forming a business closed loop from car factories to on-site operation (see Fig. 7.2). Third, it carries out refined operation, matching products and services. Car sharing changes selling the cars in the inventory of traditional automobile enterprises into renting them. On the one hand, it reduces the inventory and idle costs of cars; on the other hand, it flexibly matches the market demands. The use of cars demonstrates an obvious characteristic of cyclical fluctuation. The supply model of car sharing optimizes user needs in a thorough way with a focus on the three dimensions of uservehicle-network, and achieves a more accurate match between demand and supply of services in terms of car use scenario and experience, so that users can obtain personalized, customized and refined car use experience. 5. Credible commitment and mutual oversight of car-sharing platforms From the user side, the credible commitment of the current car-sharing platform comes from the information verification of users, certificates and vehicles. To use a shared car, a customer has to upload their real information of ID and driving license to obtain car qualification. The server at the back-end of the platform is responsible for identifying users’ information and verifying the consistency of an ID card and the information of a driving license to avoid fraudulent use of ID card or driving

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Car manufacturing

Car financing

Car recycling

Car purchasing

Car sharing

Fig. 7.2 Industrial chain closed loop of car sharing

without a license. Because there are still some loopholes in the current social credit system, it is difficult for the platform to fully realize the information authentication and verification of people, certificates and vehicles through technical means, so it is necessary to supplement it with the joint governance of the government and the society. From the perspective of front-end automobile manufacturers, whether they build their own sharing platforms or implement strategic cooperation with other car-sharing platforms, the intermediary role of platforms will help traditional automobile manufacturers optimize the industrial chain, reduce costs and improve efficiency. Automobile manufacturers not only provide stable and quality-guaranteed vehicle sources for the platform, but also provide related financial and insurance services, infrastructure (refueling, charging) services, after-sales market services, etc., to open up the whole industrial chain of traditional automobiles (see Fig. 7.3). For example, Didi Chuxing has entered strategic cooperations with 12 auto manufacturers including BAIC BJEV, BYD, Chang’an Automobile, DF PV, DYK, Huatai Motor, JAC, Geely, RenaultNissan Mitsubishi Alliance, Chery, China FAW and Zotye New Energy Automobile for the joint construction of a future-oriented new-energy vehicle sharing service system. From the perspective of the platform itself, as an information provider and transaction enabler, it has as its primary task to ensure the authenticity of information

144

7 Multi-dimensional Collaborative Governance of Urban Ride-Sharing … Provision of vehicles Auto finance and insurance services Infrastructure services After-sales market services

Automobile manufacturers

Car-sharing platforms

Provision of customers Optimization of automobile industry chain

Figure. 7.3 Complementary supply advantages of car manufacturers and car-sharing platforms

sources. On the one hand, information of vehicle quality and location on the platform (e.g., driving distance, range, maintenance time, etc.) should be fully, truthfully, and effectively disclosed to customers, so that users can screen vehicles that match their needs. On the other hand, under the precondition of protecting the privacy of customers, the customer information should be screened to ensure that the use of cars complies with the law with legal vehicle driving qualifications, and such problems as fraudulent use of others’ license plates are avoided.

7.1.2 Coordination and Conflict Between Car-Sharing and Urban Public Resources By activating the idle rate of vehicle transport, car sharing actively responds to the national call for energy saving and emission reduction, so as to realize green and smart travel. This new transportation model will inevitably have an impact on the existing public and traffic environment of the city. 1. Coordination with public resources Car sharing will reduce the occupancy of urban space by private cars, free up a lot of urban space and help reshape cities. The idle rate of ordinary private cars is very high, not only in one day, but also in the whole life cycle of cars. Therefore, if shared cars are widely used, both the use of private cars and the idle rate of running cars will be reduced, thus maximizing the use of existing car resources. Carlo Ratti, a professor at Massachusetts Institute of Technology, estimated that efficient operation of each shared car could take 9–13 private cars off the road.2 With the development of technology, unmanned cars will be connected with car-sharing platforms in the future, which will further carry out reasonable and scientific route planning for car-sharing resources and improve the operation efficiency of car-sharing.

2

“SPECIAL INTERVIEW WITH CARLO RATTI ON SENSEABLE CITY LAB MIT” (https:// www.carloratti.com/wp-content/uploads/2015/07/20150420_WorldArchitecture.pdf).

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Urban parking lots/garages form a large but unattractive urban fabric within urban areas, with frontage parking spaces encroaching on pedestrian space and carriageways, adversely affecting both pedestrians and drivers. The use of shared vehicles can reduce private car ownership and the need for parking lots. It can help city planners to design new uses for parking areas, such as parks or social housing and mixed-use areas. The elimination of some frontage parking spaces will also help reduce urban road space resources, allowing for more diverse development and intensive urban land use. Car sharing makes the urban transportation greener and more environmentally friendly. Taking the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen as an example. According to a survey, each shared car in these areas consumes an average of 700 L of gasoline per year. Currently, car sharing platforms mainly offer small-engine gas-electric hybrid and new energy vehicles, whose energy consumption is 38% lower than the average level of the industry.3 In addition, car-sharing charges less than taxis and hitch rides of the same distance. With the improvement of environmental awareness, more and more people will choose smart ride-sharing which is more environmentally friendly and economical. Car sharing makes urban transportation more efficient. Through the data integration platform, full traffic data of junctions can be deduced and a smart transportation system can be established, which can improve the efficiency of urban management. American scholars Vazifeh, Santi and Resta et al. (2018) calculated more than 150 million taxi trips in New York City, and found that if passengers accept waiting time of 5 min, more than 60% of the trips can be realized by sharing, which can alleviate traffic congestion and save more than 20% of travel time. When self-driving car market penetration reaches 10%, traffic flow can be reduced by 15%. When it reaches 90%, road congestion can be reduced by 60%, equivalent to approximately 2.7 billion hours of travel time. It can be seen that car-sharing can optimize urban spatial layout, reduce urban traffic congestion and urban travel costs. 2. Conflict with public resources Since people only have the right to use shared car but do not own them, it is difficult to clarify the responsibility if a driver runs into trouble after using a shared car. For example, in case of an accident involving a private car and a shared car, the driver of the latter may run away. This will make accident claims impossible, since the driver does not own the car with abandoning the car and running away a convenient option, and the sharing platform which is not directly responsible may also refuse any part in it. As a result, the owner of the private car will find it difficult to protect their own rights and interests. Due to the lack of public understanding of car-sharing and the non-standard service of many car-sharing platforms not in accordance with the industry specifications, many car-sharing rental points are now experiencing long-term parking of shared 3

An Analysis Report on Car-sharing in China’s First-tier Cities, jointly published by Research Institute of Ministry of Transport and TOGO Car-sharing Platform Enterprise.

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cars and idle charging facilities, resulting in the waste of car-sharing resources. The parking of “zombie” shared cars not only affects the full use of urban space resources but also crowds out and waste the otherwise limited parking resources. In addition, most of the shared cars are new energy vehicles or plug-in hybrid vehicles, whose extensive use may also greatly increase power pressure on cities, resulting in power supply shortage.

7.1.3 Defects of Self-governance of the Car-Sharing Platform If safety and credit issues are not guaranteed, car-sharing cannot achieve scale development and efficient long-term operation. From the perspective of safety, the maintenance of many shared cars is not in place, resulting in problems such as breaking down, flat tire, etc., which will not only reduce users’ trust in the platform, but also bring great security risks to users. In addition, when there is a problem, the follow-up service of the platform is not timely and unable to meet the service standards of ordinary 4S car stores, causing doubts among users about the car-sharing platform. These are the problems that are difficult to overcome in the self-governance of car-sharing platforms. For example, Global Car Sharing Rental Co., the operator of EVCARD car sharing service, once failed to accurately verify the identity of a driver who had registered under a false name using another driver’s license. The driver was driving without a license and eventually caused a car accident. If platform enterprises cannot accurately verify the identity of drivers, it is easy to leave behind hidden dangers for road safety. Although the platform has stated that “the registrant’s information must be true and effective, and the account is not to be lent out. Any consequences caused shall be borne by the users themselves,” this has a limited supervisory effect on the drivers, and there still exist some major security flaws. From the perspective of credit, the basis of sharing lies in mutual trust. When the public’s trust in the platform begins to collapse, a tide of deposit refund is inevitable. Once there is a lack of credit, the amount of deposit refund will be increased rapidly, resulting in the rapid break of the capital chain of platform enterprises and the verge of bankruptcy, and then the platform accelerates into a vicious circle of complete loss of credit. Since 2017, there have been several car-sharing platforms, such as TOGO, Instant travel and Utrip, which have been blacklisted because of complaints about the difficulty in deposit refunding. The loss of users’ trust in car-sharing platforms is not only directly affected by some negative news and platform outage, but also caused by poor experience in daily use. According to a survey, 66.67% of users believed that they could not find a free shared car during peak hours when they really needed it. 53.33% of users thought that there was a great shortage of parking spaces and charging points, and it was not convenient to use shared cars for traveling long distances; 46.67% of users reported there were problems with car-sharing apps; 41.67% of users complained that the interior of cars were messy, dirty, and smelly;

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40% of users pointed out that the fee/deposit was too high for the use of shared cars.4 It can be seen that users’ satisfaction with the current car-sharing is not high and the experience is not good, thus reducing their intention to use and trust shared cars.

7.1.4 Car Seat Sharing There is also a hitch ride model of car-seat sharing in the market, which is closer to that of traditional taxis. In terms of sharing mode, it is easier to use a hitch rid than rent a car, but there are still no industry specifications for this model. In recent years, there have been quite a few cases of dishonesty on domestic and foreign hitch ride platforms, so that they are gradually fading out of public view. However, it is undeniable that it is a typical model of sharing economy. The following is a brief analysis of the self-governance issues of this model. 1. Cost advantage of the hitch ride model With the gradual deepening of urbanization, people’s living space is increasingly shifting to the periphery of the city, accompanied by a mounting demand for daily travel by car. Hitch rides have cost advantages for both owners and customers. For the former, the idle rate of car seats is relatively high in daily commuting, but the seat rental income obtained can offset the variable costs of travel, such as road toll, gasoline fees, electricity fees, etc., and at the same time, it also has certain social functions. For the latter, a hitch ride offers a better type of cars, a more comfortable riding experience, and more importantly, a cheaper price than taxis. 2. System flaws in hitch ride (1) Hitch ride has changed the nature of private car operation. Private cars, originally owned by families, do not have the feature of business. Therefore, there is no legal basis for private cars to carry passengers for the purpose of profit. At present, most hitch cars fall into the gray area between legal and unlicensed taxis. (2) The operation of private cars constitutes an unfair competition to taxis. As commercial vehicles, taxis must comply with strict access standards, including the assessment of drivers, license requirement, driving age requirement, etc., as stipulated in the Taxi Driver Qualification Management Regulations issued by the Ministry of Transport of China. In contrast, hitch ride does not have a clear access threshold. Some platforms providing Internet private car services only have simple requirements for their own vehicles, which are too low compared with those for taxis. (3) Hitch ride safety calls for strong government regulation. In 2018, Didi Hitch went offline due to a safety accident. Though it announced its return in November 2019, with additional measures taken to restrict its operating 4

Gou et al. (2019).

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hours, it still could not completely remove the public’s doubts about hitch safety. How to check the credit and criminal records of car owners, and how to ensure the safety of both car owners and passengers are the biggest problems hitch ride operators face in their continuous operation. In addition, hitch ride is also prone to problems, like tax evasion, difficult tax regulation and a series of others. All this limits the orderly development of hitch business. Though hitch ride is currently at a low ebb in the industry, similar issues such as access and taxation also exist in car sharing. Both will be discussed in the following section.

7.2 Collaboration Between Self-governance of the Car-Sharing Platforms and Government Governance 7.2.1 Collaborative Governance Between the Government and Car-Sharing Platform Enterprises 1. Access problem of the car-sharing platform The government has begun to give more attention to car-sharing platforms, reflected especially through its regulation of rental vehicle management. On the one hand, the government has made it clear that registration should be made with the public security organs in accordance with relevant laws and regulations and technical standards, and the vehicles should pass the safety technical inspection and environmental protection inspection. The compulsory traffic accident liability insurance and the third-party insurance and other related insurances should be purchased according to the nature of registration. All these are regulations of access for car-sharing platforms. On the other hand, car rental operators should have the facilities and equipment necessary for identity inspection, check the original valid documents provided by the lessees, record the relevant information in the vehicle rental contract, and specify and check the identity documents and driving license information of all drivers. These are the access regulations of the rental personnel and platforms. From the perspective of operation, the government clearly encourages car rental enterprises and insurance companies to develop insurance products according to the characteristics and risks of car rental business, to improve the ability of car rental operators to resist risks and protect the legitimate rights and interests of the lessees. Car rental operators themselves should strengthen the management of the daily use of rental vehicles, establish their technical files, conduct regular testing and maintenance, and ensure the good performance, safe condition, and clean and tidy appearance of rental vehicles. At the same time, rental vehicles should be available

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only to the lessees whose identity has been verified. Those who remain unidentified or refuse to have identity verification should be denied car rental service. All these are access regulations of shared cars from the perspective of safety. 2. Taxation of car-sharing platforms In the early days, Didi Hitch was criticized by the industry for its inability to guarantee safety and unfair competition it had created for the traditional taxi industry. For the latter criticism, car-sharing was boycotted by taxi drivers in many places around the world. Compared with taxis, whose operation requires a rigorously certified business license and payment of taxes, hitch and car-sharing industries do not have strict access requirement and tax laws to go by. Therefore, the operation cost of car-sharing is much lower than that of traditional taxis when the same business income is obtained. The Ministry of Finance and the State Administration of Taxation of China issued the Supplementary Notice on Certain Tax Policies Concerning the Scope of Taxable Services for the Transport Industry and Some Modern Service Industries in the Pilot Tax Reform of Replacing Business Tax with Value Added Tax, which clarified the provisions on taxi companies charging taxi drivers administrative fees. If a taxi belongs to a taxi company, VAT shall be levied under the category of “land transport service”. In the current tax standard, car sharing platforms belong to the category of small and micro bus operators, who only charge leasing fees but do not provide driving services. What they offer are classified as “tangible and movable business leasing services”. Therefore, according to the Circular on Comprehensively Promoting the Pilot Project of Replacing Business Tax with Value Added Tax (No. 36 of Finance and Taxation [2016]), the levy rate of small-scale taxpayers is 3%. To achieve effective collection and management, this part of the personal income tax is collected with tax withholding and remitting as the main method and taxpayers’ personally filing returns as a supplement. Car sharing featuring tax withholding and remitting, and self-declaration is marred by many inadequacies, as compared with taxis. First, tax boundaries are not clear enough. Many drivers of shared cars are part-time, and it is difficult to ascertain which specific items of personal income tax the drivers’ income belongs to. It is also unclear whether the services provided should be taxed under the VAT of transportation industry or that of modern service industry. Secondly, since car sharing cars relies on the Internet trading which is paperless, inconveniences are created for tax regulation. As the main tax voucher, invoice is almost rarely seen in the high-efficiency car-sharing industry, which makes it more difficult for regulators to supervise tax collection, with the mobile phone order confirmation service as the only reference. For example, a car owner may ask their passenger who has boarded the car to cancel the order and collect money offline to avoid taxes. Thirdly, it is difficult to determine the subject of tax payment. At present, private car drivers accessing the car-sharing platform only need simple registration to provide services and gain profits instead of doing so at the tax bureau. Therefore, it has not clearly specified whether the tax subject is the car-sharing platform or its drivers. Finally, current technological loopholes also make it possible to avoid taxes.

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Therefore, to maintain the industry order and ensure fair competition, the government needs not only to raise the entry threshold of car-sharing, but also to levy taxes on the income of car-sharing reasonably and according to laws and regulations, so as to maintain the smooth operation of the industry.

7.2.2 Collaborative Governance of Car Sharing by the Government, Platforms and Society In addition to the government and the platform itself, the participation, supervision and feedback of the public are also important forces conducive to the coordinated and sustainable development of car sharing. From the perspective of coordination of urban public resources, local transport departments can cooperate with urban and rural housing construction (planning) departments. They then examine comprehensively urban economic development, traffic structure, car ownership, parking resources, and other practical conditions to decide on the reasonable position of car sharing in comprehensive urban transportation system. Such positioning should be in line with the guiding principle of giving priority to the development strategy of public transportation and take into account the characteristics of non-intensive travel of shared cars. Through research, we can establish a vehicle delivery mechanism that is compatible with public travel demand, urban road resources, parking resources, etc., to establish a multi-level and differentiated urban transport system that can develop in a coordinated manner with urban public transport, taxi and other travel modes. From the perspective of technological application, car-sharing operators should have strong online service capabilities. First, the renter identification system needs to be implemented through more accurate technical means. Secondly, through big data analysis, the intelligent organization and allocation of vehicles can be strengthened, and the vehicle layout dynamically optimized to achieve the balance between vehicle supply and demand at different times and in different regions. Finally, the platform can rely on technological promotion and application of “electronic fence” to strengthen parking management by setting up virtual parking areas and guiding users to park in an orderly manner. At the same time, intelligent technology can provide in-car entertainment facilities, office and other services to improve consumers’ travel satisfaction. From the perspective of platform operation, car-sharing operators should have offline operation service capability. First of all, the safety condition of the vehicle can be ensured through routine inspection and vehicle self-inspection by the operation personnel. Secondly, a mechanism and process can be established and improved for vehicle scheduling, maintenance, rescue, recovery. Thirdly, payment and settlement services that are secure and compliant with laws and regulations can be adopted to ensure the security of users’ deposits and funds, as well as the security of users’ personal information. Finally, through the effective connection between online and offline services, intelligent technology can be fully utilized to realize automatic car location, parking management, automatic parking, automatic charging and other

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functions, to realize automatic vehicle scheduling, and improve the efficiency of operation and management. In addition, the platform can also synthesize vehicle operation data and other information such as consumer usage characteristics, charging, traffic and other information, to give full play to the advantages of big data, improve travel services, and launch customized travel service schemes. Social co-governance, on the one hand, requires the community to encourage the public parking lots in urban commercial centers, government affairs centers, large residential areas, transportation hubs and other crowded areas to provide convenience for the parking of short-term rental vehicles. On the other hand, measures such as preferential parking fees on urban roads can be adopted to promote rental vehicles to park in urban parking berths designated in accordance with the law, to improve the use efficiency of on-road parking berths and ease of use of rental vehicles without increasing urban road congestion and affecting the parking of other public vehicles. To sum up, through the continuous improvement of the internal system of the platform itself, the government’s maintenance of fair competition from the perspective of safety, and the constant feedback and supervision of the public, more effective multi-dimensional collaborative governance of the car-sharing platform can be achieved.

7.3 Self-governance of Urban Bike-Sharing Platforms Bike-sharing is committed to providing convenience for citizens’ short-distance travel. While advocating the concept of green environmental protection, it reflects a strong ability of public service. However, the bike-sharing platform itself is not a government department that fully provides public products, so the governance of the platform is special, which should consider both the economic benefits of enterprises and social services. Since 2016 and 2017, the excessive capital influx into bike sharing, enterprises’ preemptive claim of the market and other problems have caused the excessive release of shared bikes, crowding out many public transportation resources. Instead of realizing the concept of green environmental protection, it has caused new resource waste. In this regard, how to position the bike-sharing platform enterprises, how to regulate the government and how to govern the society are crucial to the sustainable development of the industry.

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7.3.1 Contents of Self-governance of Urban Bike-Sharing Platforms 1. Expected revenue of the bike-sharing platform As a new thing in the Internet economy, bike sharing together with car sharing and accommodation sharing discussed above relies for profit on the new Internet technology, mobile phone smart terminal, and a resource integration of the demand for traditional short distance travel and supply. For both Hello Bike and Meituan Bike, which are still in operation, and Mobike and ofo, which were very popular in 2016 and 2017, there are three obvious sources of profit. First, profitting from the rental of the bikes themselves, which is the most direct way for bike-sharing platforms to make money. In their early days, Mobike and ofo mainly charged bi-directional fees based on time or kilometers. Currently, most of the shared bikes still in operation are charged based on time. The fees of some shared bikes in 2019 are shown in Table 7.6. Table 7.6 Price list of some shared bikes and public bikes (November 2019) Brand

Daily price

Package price

Vehicle management fee

Meituan Bike

1 yuan for 15 min, 0.5 yuan for every 15 min after that

30 yuan/month, unlimited number of rides, free for the first 2 h of each ride

5 yuan per ride

Ofo

Official website

1 yuan per hour

20 yuan/month, the first 20 times a day free, the first 2 h of each time free

20 yuan per ride

Wuhan

Starting price: 0.5 yuan, the time fee: 0.5 yuan/min, the mileage fee: 0.5 yuan/km, 2 yuan within an hour capped

20 yuan/month, free for the first 20 times a day, free for the first 2 h of each ride

None

Shanghai

1 yuan per 0.5 h and 20 yuan 79 yuan for every 8–15 yuan per per day 15 days, twice a day, ride free for the first 30 min of each ride

Jiangsu

1 yuan per 0.5 h and 5 yuan per day capped

79 yuan for every 15 days, twice a day, and free for the first 30 min of each ride

8–15 yuan per ride

Henan

0.49 per 0.5 h, 5 yuan day capped

5 yuan/week

1–5 yuan per ride

Youon

Beijing public bike

Free within one hour, 1 yuan None per hour after 1 h, 10 yuan per day capped

Unknown

(continued)

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Table 7.6 (continued) Brand

Daily price

Package price

Hangzhou public bike

Free within one hour, 1 yuan None for 1–2 h, 2 yuan for 2–3 h, 3 yuan per hour above 3 h

Vehicle management fee Unknown

Note The vehicle management fee means that if a user illegally parks a shared bike in a no-parking zone5 for more than 2 h, the platform will directly deduct a fee from the user’s balance as a penalty. If the balance is insufficient, it will be deducted into a negative value, and get reactivated when there is a recharge

In Table 7.6, the time charge of Hello Bike and Meituan Bike is limited to 15 min, which shows that it mainly caters to the short-distance and short-time travel demand. In addition to this payment, bike-sharing platforms also offer monthly or weekly package prices based on users’ habits. A comparison of shared bikes and the public bikes in Beijing and Hangzhou shows that the public bikes provided by the government are more of public welfare service than shared bikes. For example, the public bikes in both places are free of charge within one hour, but the charge after an hour is higher than the average fee for shared bikes. In addition, it is worth noting that since 2019, most of the bike-sharing platforms have added vehicle management fee or dispatch fee system to properly punish users for illegal parking, strengthen the regulations on the parking of shared bikes, and reduce users’ behavior of parking their bikes outside the service area or within the no-parking zone. in this regard, different management methods have been adopted. Take Hangzhou for an example. Most public bikes here are returned to piles, with few cases of improper parking and riding, because if users do not enter a drop-off point or electronic fence, they will not be able to return the bikes successfully and thus be charged continuously. Second, obtaining financing income from deposits or investments. In the early stage, most of the deposits would be used to further expand the scale of the platform enterprises or for reinvestment, thus bringing higher profits. However, due to the particularity of the deposits, once there is a breach of trust on the part of enterprises, their users will apply for the refund of their deposits on a large scale, which will directly force the enterprises’ capital chain to break, rendering them unable to return the deposits. This will aggravate the credit decline, resulting in a vicious circle and the direct collapse of a large number of enterprises. This is consistent with the logic 5

No-parking zone refers to the no-parking zone which is set within the operation area of a bikesharing platform out of its operational needs in order to standardize bike management and cooperate with the management of relevant government departments. Users can see the scope and specific address of the no-parking zone from the map in the platform software, and the platform will send a reminder once they enter the no-parking zone. Meituan, for example, allows users one waiver of the no-parking penalty and a refund of the bike management fee if they take the bike out of the no-parking zone within two hours. A service area is designated by Hello Bike and a user will be charged a vehicle dispatch fee of 2–50 yuan if they ride out of the area. The actual deduction will be made according to the distance out of the service area one has ridden.

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underlining the tide of deposit withdrawal of shared cars. As a result, the model of profiting through deposit is gradually under the strict policy control. Third, profiting from other parts of the platform, such as advertising. The number of shared bikes is huge, which has formed certain image effect and scale effect in cities. Therefore, some platforms print advertisements of partners or investors on the bikes, to earn advertising fees or bring indirect benefits to the partners. There are also two potential sources of profit. First, the value of public welfare. The emergence of shared bikes can greatly relieve the pressure of short-distance transportation, solve the problem of the “last kilometer” of urban transportation, and form a supplement with buses. At the same time, it is beneficial to the environment without air pollution and noise pollution. Therefore, from the perspective of externality, it has a positive output of public welfare value to the society. This positive externality has increased environmentalist praise for shared bikes, but has yet to bring tangible benefits to the platform. Second, data value. When using shared bikes, users need to register and to be bound with a payment software such as a bank card or Alipay. At the same time, common places will be entered to form a habitual personal cycling path. Such information will be invisibly mastered by the sharing platform. The larger the user scale, the more valuable the data and information will be. The in-depth mining of such information and data will bring continuous profits to the platform and help enterprises adjust their strategies. For example, the platform can increase or decrease the number or density of bikes by analyzing users’ riding habits. 2. Expected cost of the bike-sharing platform At present, most bike-sharing platforms have their own brands, such as Meituan, Hello, etc., so the cost of bikes has become the main cost source for most sharing platforms besides technology. In 2016, Mobike officially disclosed that the cost of a bike was 1,000 yuan. According to the average operating price of a bike in Table 7.6, it can be seen that at the average price of 1 yuan per hour, each bike needs to be ridden for 1,000 h for the recovery of the cost. At three hours per ride every day, it will take nearly a year to recoup the cost of a single bike, not including depreciation and malicious damage. In order to expand the market share, the platform has continuously increased the number of bikes in tens of millions in a single city, which poses a great test to the capital turnover of the platform. By further comparing the cost composition of Meituan Bike, ofo and Hello Bike (Table 7.7), it can be found that Hello bikes have higher cost efficiency and lower overall cost if their quality is equal to that of Meituan bikes. As the latest one among the three bike companies, Hello Bike fully understands the supply chain, production technology and process, and has stronger bargaining power when negotiating with manufacturers. For example, it has chosen the chains made in Japan, whose price is slightly higher than those made in Kunshan, China, but it has a low rate of extension and damage and is rust-resistant, thus reducing the cost of operation later on. Ofo has the lowest cost among the three bike-sharing companies, but too low a bike cost will

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Table 7.7 Cost of some shared bikesa Unit: yuan

Brand

Frame

Tire

Axis of rotation / Chain

Smart lock

Solar panel

Embedded chip

GPS module

SIM card

Total cost

Meituan Bike

350

45

160

320

45

45

20

5

990

ofo

200

15

10

225

0

45

0

5

500

Hallo Bike

310

30

15

320

45

55

20

5

800

a Data source http://baijiahao.baidu.com/s?id=1597959675351869650&wfr=spider&for=pc.

reduce the quality of the bike, bring risks to future maintenance, and cause greater losses. According to Penguin Intelligence, the probability of ofo users and Meituan bike users reporting vehicle faults is 39.3% and 26.2% respectively. At the same time, in compliance with the Bike Sharing Service Specifications, shared bikes must be scrapped after three consecutive years of use, with an average loss of at least 33.3% in one year. In addition to the cost of bikes, the initial expected cost of the platform also includes technology investment, mobile software development, etc., which is like the cost input of other sharing platforms. Later investment mainly goes to platform operation, the wear and tear of bikes and other aspects. Since the depreciation of bikes is closely related to their quality, ofo has bikes with lower cost and their wear rate is the highest. The larger the overall scale of the bikes, the more bikes will be damaged, and the higher the maintenance cost will be in the later period of operation. This results in ofo being far less cost-efficient than other bike sharing platforms. Compared with public bikes, dockless return points of shared bikes do not require corresponding fixed equipment, so the initial cost is lower than that of public bikes. However, to avoid illegal and indiscriminate parking, some bike-sharing platforms have started to use electronic fences and other methods to regulate users’ parking behaviors. 3. Internal specifications of bike-sharing platforms From the user side, the bike-sharing platform provides a more flexible and more convenient model of car rental and return, especially for office workers who rely on public transportation in big cities to reduce the time of short-distance travel from their destinations to the subway station/bus hub. Therefore, the layout density and location of shared bikes in the urban space are critical. Due to the obvious mobility of the parking of shared bikes, in September 2018, representatives of several bike-sharing enterprises jointly issued the Letter of Commitment on the Parking of Bike Sharing Industry Specifications, to carry out the internal regulations on the parking of bikes. The main contents of the letter of commitment include: (1) Abide by the city management laws and regulations, actively cooperate with the government supervision, and accept social supervision;

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(2) Place bikes in a reasonable and orderly manner to match urban space carrying capacity, parking facility resources, and public travel needs; (3) Fulfill the responsibility for bike parking management, and be equipped with offline operation and maintenance force commensurate with the bike launching scale; (4) Clean up illegally parked bikes in a timely manner and keep shared bikes clean; (5) Repair damaged bikes in a timely manner, recover regularly idle and scrapped bikes; (6) Actively develop new technologies to improve the accuracy of bike parking positioning; (7) Build a credit management system to guide users to park their bikes properly; (8) Serve the travel needs of the public and promote the joint construction, governance and sharing of urban appearance, environment and order. In addition to regulating parking behaviors, many bike-sharing platforms have begun to warn users in advance about their safety and guide them to ride safely. For example, the application of ofo has eight safety behaviors highlighted on its home page, including: 1. No one under 12 years old is allowed to ride on the road; Don’t ride your bike through the crosswalk; 3. Freehand cycling is prohibited; 4. Don’t ride your bike on a highway/elevated road; 5. Don’t run red lights; 6. Don’t ride with headphones on; 7. Don’t go backward; 8. Do not occupy a motorway, etc. In addition to the safety warning and parking commitment, the current internal specifications of shared bikes are still relatively weak, and the bike-sharing platform mainly offers new cars of any brand, and the utilization of idle resources is far from enough. It should try returning to the original intention of docking idle bike resources to reduce the operation cost. The use efficiency of many private bikes and mopeds is similar to that of private cars, which is generally low. Most of them are used for morning and evening commuting, about 10 times per week. Therefore, if they are connected to the sharing platform, the use efficiency of existing bike resources can be effectively improved. 4. Advantages of the supply system of the bike sharing platform The first supply advantage of bike sharing is that it relies on Internet technology and market acumen, making it more flexible than the government service of public bikes. Figure 7.4 through a comparison between shared bikes and public bikes shows that shared bikes are released in larger quantities, less restricted, whose return is more flexible and timesaving. However, shared bikes are more prone to be damaged and over-released to occupy the market share. The second supply advantage of bike sharing is its connection with related industries, which helps to drive the coordinated development of the upstream and downstream of the industrial chain. Industries related to bike sharing include bike manufacturing, logistics distribution industry, operation and maintenance service industry, smart lock and other accessory manufacturing, electronic fence intelligent hardware industry and resource recycling industry. The mass release of bikes has greatly increased the demand for related industries, and also led to the increase of employment in related industries. The third supply advantage of bike sharing is its increase of the efficiency of resource utilization. A report by China Zhongjinpuhua Industrial Research Institute

7.3 Self-governance of Urban Bike-Sharing Platforms

Public bikes Government-provided, monotypic Return of bikes pile-based, parking orderly Limited in number, higher in price Planning area clear

157

Shared bikes Enterprise-provided, polytypic Return of bikes non-pile-based, parking chaotic Excessive in number, lower in price Planning area unclear

Fig. 7.4 Comparison between shared bikes and public bikes

estimated that in 2017, the average daily order of shared bikes in China was 5,000, each bike was ridden more than 3 times per day, and users cycled about 5 billion kilometers in total, reducing carbon emissions by 800,000 tons. The efficiency of “shared bike + ground bus” mode was 18.6% higher than that of “walking + ground bus” mode, and the efficiency of “shared bike + subway” mode is 17.9% higher than that of the private car mode. Compared with the “walking + subway” mode, the “shared bike + subway” mode increases the efficiency by 15.8%.6 Therefore, shared bikes have effectively improved the convenience and time efficiency of residents’ travel. 5. Credible commitment and mutual supervision of bike-sharing platforms From the user side, the bike-sharing platform is weak in recognizing user credit. The user registration requirements of most platforms are only mobile phone number verification and binding with a payment method. Users of some platforms that required no deposit need to connect with Alipay credit account and have a credit score of more than 600. Compared with the requirements of around 100-yuan deposit and ID registration system associated with public bikes, the credit standard for users of shared bikes is relatively low. This is also the main reason for why some shared bikes are greatly damaged, lost and even maliciously destroyed. The newly designated noparking zones for shared bikes have strengthened the commitment of users to park bikes properly, which is conducive to the standardized operation of shared bikes and coordination with city management. From the perspective of the platform itself, credible commitment means that the bike information disclosed on the platform has corresponding quality standards and authenticity guarantee. The reason why ofo yellow bikes get the most complaints from users is that they cannot find bikes according to where they are positioned. This is related to the quality of the bikes provided by the ofo platform and the platform’s poor performance in later operation and maintenance, which easily costs itself users’ trust in the platform.

6

Data Source: http://www.sohu.com/a/195207906_662385.

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Bike-sharing platforms’ supervision of users mainly includes such aspects as paying rent on time and parking vehicles according to regulations. However, it is difficult for the platforms to report users’ trust-breaking behaviors to the corresponding credit department to be placed on record. Users’ supervision is reflected through their feedback on the quality problems of the bikes through the mobile terminal, so that bikes with quality problems can be immediately fed back to the platform through the app, which is conducive to the timely maintenance or recycling of the bikes. For example, Meituan Bike sets a tool button in the mobile app, which users can click to report bike faults separately by categories, such as lock, brake, chain, foot, QR code, handlebars, wheel damage, etc. Hello bike users can also report problems such as private locks on their bikes.

7.3.2 Coordination and Conflict Between Shared Bikes and Urban Public Resources The emergence of shared bikes has impacted urban public transport in many ways, positively, e.g., coordinating public resources to improve travel efficiency, and negatively, e.g., crowding out public resources and disrupting traffic order. 1. Coordination with public resources Bike sharing can ease urban traffic congestion and improve travel efficiency. With the emergence of shared bikes, more and more people choose to use them, which effectively solves the problems caused by traffic jams and saves people’s time greatly. Shared bikes are distributed in every nook and cranny of the city, and much easier to locate as compared with buses and public bikes, reflecting the convenience of shared bikes for short-distance travel. Before the advent of shared bikes, people usually walked or took a taxi to get from the bus station to the destination. Now shared bikes are offered as another travel tool, which is conducive to easing congestion in morning and evening peak hours, increasing residents’ travel choices, and improving their travel efficiency. Bike sharing demonstrates the characteristics of green travel: low-carbon, environmentally friendly, convenient, and comfortable. The real effect of environmental protection can be measured in terms of the same cycling distance. Walking will increase the travel time and reduce efficiency, while taking a taxi will increase carbon emissions and be less environmentally friendly. Therefore, environmental protection in terms of energy saving and emission reduction is the core advantage of bike sharing, making it a driving force for the green development of urban economy. 2. Conflict with public resources In the past two years, many bike-sharing enterprises have rapidly expanded their travel business to occupy the market. This has led to the over-saturation of shared

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bikes in some cities, a victim of their own advantage of convenience. Shared bikes can be seen on sidewalks, roadsides and public leisure lawns, and mountains of discarded bikes can also be seen in the garbage collection stations of many cities. Random parking and quality damage caused by bad user behaviors have seriously affected the order of public transport and the appearance of the city, but also brought huge cost consumption for the normal operation of bike-sharing enterprises. From the perspective of urban spatial layout, shared bikes are few and far between and with a high damage rate in suburban areas, many of which are beyond the reach of public transport services. For example, rows of shared bikes can be seen around metro stations in such central areas as Xuhui District, Huangpu District of Shanghai, while there are so few shared bikes in suburban areas like Baoshan District and Jiading District of the city that people usually find it difficult to find shared bikes near a metro station and have to walk or take a taxi to reach their destinations. These areas afford a poor user experience of shared bikes. In addition, many cities do not set aside lanes for bikes which is very friendly to users of shared bikes. Due to the limited space of public roads, sometimes shared bike riders have to move alongside private cars and other vehicles. With their safety not guaranteed, they may give up the use of shared bikes. With residential areas and public places now declared off-limits to shared bikes, signs like “No parking for shared bikes!” have been erected near some metro stations, residential buildings, bus stops and office buildings in the city. Many users also complain about the difficulty in finding a parking spot. At present, there is a shortage of parking spots near public transport stations, making transit parking difficult. Bike sharing seems to be gradually deviating from the original intention of facilitating users’ travel, and parking and the use of shared bikes are getting increasingly difficult.

7.3.3 Defects of Self-governance of Bike-Sharing Platforms The main defects of bike-sharing platform self-governance are shown through the following two aspects. (1) Indiscriminate parking of shared bikes brings external problems to urban traffic, such as public space crowded out due to disorderly release of bikes and its effect on city appearance. (2) Insufficient investment of resources by operating enterprises in operation scheduling, maintenance and recovery of bikes, promotion of civilized car use and other aspects, because of their preoccupation with taking market share. In the governance process of shared bikes, enterprises should bear the main responsibility. However, bike sharing involves such problems as urban slow lane planning, parking space setting, management of riders’ uncivilized behavior, the solution to the governance problem of shared bikes cannot be separated from the joint management and governance of the government, enterprises, society, and the general public. At present, the safety guarantee measures of the transportation planning department for

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cycling are not perfect enough, and the inadequate social credit information makes it is hard to punish users for maliciously destroying shared bikes.

7.4 Collaboration Between the Self-governance Bike-Sharing Platforms and Government Governance 7.4.1 Collaborative Governance Between the Government and Bike-Sharing Platform Enterprises 1. Coordination between access regulation and internal industry specifications Beijing clearly requires that the operation platform of bike-sharing enterprises should have the function of big data analysis, able to monitor in real time vehicle running status, and report relevant data to the government platform of supervision and service. In the future, the Beijing Municipal Government will gradually acquire strong technical support, and improve the grid and road inspection mechanisms, so that online and offline supervision will exert enough pressure on bike-sharing enterprises for them to change their operating model. Based upon urban characteristics, public travel demand and the positioning of the development of Internet bike rental, other cities have also been conducting research on how to establish a bike delivery mechanism, commensurate with urban space carrying capacity, parking facility resources, public travel demand. This mechanism serves to guide Internet bike rental operators to release their bikes in a reasonable and orderly way to ensure the healthy, orderly development of the industry and its safe and stable operation. 2. Coordination between externalities and industry efficiency From the negative externalities caused by indiscriminate parking of shared bikes to urban traffic environment, cities can develop bike parking areas suitable for local characteristics, set technical guidelines, and standardize the designation of bike parking spots. Areas and sections unsuitable for parking may be subject to no-stop management. In important urban commercial areas, public transport stations, transport hubs, residential areas, the areas around tourist attractions and other places, supporting parking spots for shared bikes shall be designated and bikes should be parked properly. In addition, to facilitate the use of shared bikes by residents, reasonable and standardized parking spots should be added in residential areas and public facilities, and electronic fences should be set up to reduce the impact of bikes on the internal environment of residential areas and public facilities. When the available parking area is insufficient, the construction of double-deck parking facilities can be considered.

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3. Coordination between urban public travel system and bike-sharing platforms As a supplement to the urban public transport system, bike sharing can help the government optimize the layout of bus stops and shared bike parking spots by integrating the usage data of shared bikes and public transport, to reduce residents’ unnecessary commuting time. For example, of the small districts served by bus stops on the same line, there are communities with fewer commuters and less use of shared bikes, and communities with more commuters and more use of shared bikes. The big data analysis of bike-sharing platforms can help the government in its later planning move the bus stations to the communities with a large number of commuters. In bad weather, residents will reduce the use of shared bikes, and increase the demand for taxi and public transport. Therefore, in this condition, the interval between the departure of public transport should be shortened appropriately, and the line of the “last kilometer” can be carefully designed. Customized buses, carpooling and other services can be provided for routes with such needs, as an alternative green travel mode when shared bikes cannot be used, and a complement to peak-time use of shared bikes.

7.4.2 Collaborative Governance of Shared Bikes by the Government, Platforms, and Society The resources connected to shared bikes include every user, enterprise and the government as well as the investors behind them. In addition to the need for collaborative governance between enterprises and the government, there should be more ways of information docking among various stakeholders to avoid the situation of enterprises only releasing bikes and users only riding bikes, regardless of the impact on the overall social interests. If users carry people or overweight items for their own convenience when using shared bikes, this adverse behavior will pose a great threat to the safety of the whole society. Therefore, for the effective management of shared bikes, it is imperative that the government, enterprises, industry and users should be all involved in the joint governance. The co-governance of society, enterprises and the government can be realized through the establishment of the positive and negative list in the parking management of shared bikes. The negative list mainly defines certain areas. For example, it needs to cover safe passages, fire passages, blind tracks, etc. These places are designated as noparking areas for bikes, which are now shown on some bike platforms. The positive list designates specific areas for parking non-motor vehicles at some large subway station exits and commercial centers where people and vehicles are concentrated, and even parking areas for shared bikes. Residents can report in real time bikes that are not parked according to regulations, which serves to further regulate bad parking behaviors. Alipay’s Sesame Credit is now an alternative strategy for most bike-sharing platforms to free deposits. Hello Bike, Meituan Bike, and public bikes in Beijing and Hangzhou have both launched deposit-free rides for users with a Sesame Credit score

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of 600 or above. This is a typical case of co-governance of the user credit system by the platform and public enterprises. The credit system no longer relies solely on the strong regulation of government departments or on moral constraints but is supplemented by Internet enterprises with relevant financial background. On the one hand, it can help the platform reduce the loss caused by trust-breaching; on the other hand, it can help with the government governance. Therefore, the government should work with enterprises to formulate relevant policies and regulations and establish intelligent and refined management platforms. For example, electronic fences should be set up, parking guidance marking system should be added, real-time monitoring of users’ parking behavior should be conducted, and daily big data should be made full use of. At the same time, an education of residents should be conducted to solve the problem of trust breach from the grassroots and provide a basis for the standardized management of shared bikes.

References GOU Yu勾钰, QIN Yaqin秦雅琴 & ZHANG Tao章涛. “Characteristics of residents’ travel behavior under the influence of car-sharing: A case study of Chenggong University Town in Kunming City”. Logistics Science and Technology, 2019 (7): 103–106, 110. Vazifeh, M.M., Santi, P., & Resta, G, et al. Addressing the minimum fleet problem in on- demand urban mobility. Nature, 2018, 557 (7706): 534–538.

Chapter 8

The Mechanism of Multi-dimensional Collaborative Governance of Urban Sharing Platforms

Urban governance involves political, economic, social and municipal activities. Regarding the new business form of sharing economy platforms, city managers can neither simply restrain it, nor take a laissez-faire attitude towards it. Instead, they need to continuously improve the system design of urban governance from the aspects of industrial development, social environment, urban planning and so on, so as to promote the formation of a joint force between supply side, demand side, management department and society for unraveling the chaos and dilemma facing sharing economy. According to the research in the first seven chapters, the current international regulation of sharing economy is mainly based on two reasons. First, problems such as tax avoidance and excessively low threshold have impacted traditional industries, which is mainly reflected in unfair competition. Second, the conflict between sharing economy and urban spatial structure has brought negative externalities. In response to these two major problems, the current control measures adopted by the government are mostly relatively straightforward, such as direct restrictions on entry and issuing bans. Many Chinese cities have also introduced relevant policies, such as stopping the launch of shared bikes and off-line hitch-riding services. Although such direct intervention in the market can quickly solve the existing conflicts, it also interferes with the normal development of the sharing economy industry and reduces its economic efficiency. Therefore, from the perspective of inclusive regulation, this chapter intends to summarize the governance characteristics mentioned above, examine the collaborative governance of platform enterprises, government and society, and propose a preliminary mechanism of multi-dimensional collaborative governance.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_8

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8.1 The Premise of Multi-dimensional Collaborative Governance of Urban Sharing Platforms Chapters 6 and 7 have studied the issues of multi-dimensional collaborative governance encountered by urban house sharing platforms and urban ride-sharing platforms respectively, finding the commonalities in governance methods in different industries. This section integrates the overall characteristics of urban sharing platform industries, and summarizes the advantages and defects of self-governance in these industries, to prove the necessity for the multi-dimensional collaborative governance of urban sharing platforms.

8.1.1 Universal Characteristics of Self-governance of Urban Sharing Platforms Whether it is shared accommodation, shared office or shared travel, there are generally some advantages that other industries do not have in the process of selfgovernance, but also some defects as a result of the immature development of the industry. Figure 8.1 summarizes the self-governance characteristics of urban sharing platforms according to Ostrom’s framework of self-governance, including the nesting of sharing platforms and urban boundaries, the effective docking and disclosure of diversified information of idle resources, the key role of technology, and the feedback evaluation mechanism as the guarantee of self-governance. These four characteristics together constitute the supply system advantage of the self-governance of the sharing platform, which affords the platform a cost efficiency advantage different from other industries.

8.1.2 Common Defects of Self-governance of Urban Sharing Platforms It can also be seen from the above analysis that the self-governance mechanism displayed in the operation process of the sharing platform has its own institutional advantages, and compared with other industries, it effectively solves the problems of high transaction costs and insufficient information in resource allocation. However, since the development of the sharing platform is still in the initial stage, the implementation of the principle of self-governance is not in place, and the peripheral role of the society and the government is not perfect, the current self-governance of urban sharing platform has the following defects.

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Nesting of platform boundaries and urban boundaries

Core technology and data as the key to realizing low cost and high efficiency

Self-governance characteristics of urban sharing platforms

Effective connection of the platforms with the supply and demand information of urban idle resources

Mechanism of feedback and evaluation as the gurantee of self-governance

Fig. 8.1 Self-governance characteristics of urban sharing platform

1. The industry’s voluntary entry threshold is weak. From the perspective of self-governance, the internal specifications of the industry are the most preliminary entry threshold, which is usually used to reduce the competition between potential enterprises and incumbent enterprises, and is also the main condition for incumbent enterprises to form first-mover advantage. At present, the access to shared platforms is generally low, so it is very easy for potential enterprises to enter the industry and cause excessive competition when they see business opportunities. For example, in 2017, the sudden collective appearance and excessive investment of bike-sharing enterprises not only intensified industry competition and reduced industry profits, but also brought chaos to the urban environment, such as disorderly parking, crowding out traffic and affecting pedestrians. From the perspective of fair competition, although too low access is morel likely to stimulate the vitality of the market, it is unfair to the traditional industries that provide similar services. The access threshold for hitch riding, for instance, is quite different from that for taxis; the same is true of homestays and hotels. Therefore, in both aspects of unfair competition and urban resource allocation, more perfect access standards need to be set up to regulate the sharing industry. Research shows that not all products are suitable for sharing. The conditions for sharing include: (1) Low depreciation rate; (2) High turnover rate. A low depreciation rate means that the variable cost of a single use is lower and the value of resources is better. The higher the turnover rate, the greater the market demand for the product;

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the higher the frequency of the use of the resource per unit time, the higher the turnover rate, the easier it is for the platform to obtain profits. Therefore, the access industry standards to be established within the sharing platform should contain the following two aspects. (1) The range of depreciation rate suitable for sharing should be given according to the characteristics of different industries. The upper limit of depreciation rate in a certain range actually raises the demand for the special features and quality of shared products. For example, the better the quality of shared bikes, the lower the depreciation rate; the less wear and tear, the better customer experience, and the lower transaction cost. (2) The turnover rate of products in a certain environment and time period should be evaluated. Stipulating the lowest limit of turnover in a certain range can actually help enterprises evaluate the profit recovery period of the product. The higher the turnover rate, the shorter the time for the enterprise to recover the cost, the easier it is to break the break-even point, and the easier it is to sustain the development of the enterprise. At present, shared power banks are profitable products in the sharing industry. Jiedian, Xiaodian and Diandian, the top three enterprises in the industry, all achieved profits in 2018. The reason is that customers have a high demand for mobile phone charging, especially where there is a high demand for mobile phones such as traveling and business trips. The configuration of shared charging banks has a large market space, and since they can be charged and discharged many times, the depreciation rate of a single use is low. 2. Tax evasion is instinctive for start-up enterprises Since the benefits of the sharing economy are very dispersed and the payback period is long, many sharing platforms will take advantage of senior organizational forms and choose cities with tax incentives to register their enterprises in order to reduce tax costs. This is the main reason why many sharing platforms and products are under attack from traditional industries. Offshore tax avoidance is nothing new, and pharmaceutical companies such as Pfizer and Merck and technology companies such as Google and Apple are all engaged in offshore tax avoidance to reduce the amount of tax to be paid to the US Federal Government. Similarly, depending on its business nature and organizational structure, Airbnb opened a branch office in Ireland and avoided 35% tax in the United States and 12.5% income tax in Ireland by transferring profits through affiliated transactions. Under an Irish law, if a multinational company files valuable intellectual property in the country, it can use royalties paid from its Irish subsidiary to shift profits to a tax haven. So the vast majority of Airbnb’s profits are generated not in the country where the service is offered, but in Ireland. This approach is impossible and unfair to such traditional hotels as Marriott, Sheraton. Because in terms of market size, Airbnb has connected more short-term rentals than most hotels

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combined, but pays far less tax on its revenue than traditional hotels. The difference in tax costs constitutes the second type of unfair competition between sharing platform enterprises and traditional hotels or hostels. 3. The credit investigation system in the industry is not mandatory. The use of Internet intelligent terminal greatly improves the convenience, but also raises higher requirements for the credit of both the supply side and the demand side. Consumers expect the shared products to have relatively stable quality, without hidden safety or other risks. The supplier also hopes that consumers can use the shared products with the same care as they do with their own purchased product, without malicious damage, forced occupation or intentional increase of the depreciation rate of the product. Although the platform has tried to guide users to conduct trustworthy behaviors, once the users break the trust, the cost or price to pay is very small, and the platform finds it difficult to track or punish users who have done things like malicious destruction of the tires of shared bikes and QR code. In the absence of external legal force, even if the platform can track the account of dishonest users, it can take very limited measures, such as canceling for a period of time or even for life the users’ qualification to use shared bikes. This is far from enough to deter users, because the information is disconnected, they can even register again with another mobile phone number. At present, the real-name system is a major method for many sharing platforms to increase user credit protection. However, after they are disabled on one platform, users can quickly switch to other similar platforms with a very low conversion cost to continue to use relevant services. Therefore, the sharing platform should build a credit alliance to share users’ credit information, so as to reduce the risk and loss caused by trust-breaking behaviors. In fact, the platform’s credit records of users can serve as a good supplement to the social credit system. If the platform reports to the government’s social credit system the account information of trust-breaking users with conclusive evidence, the government will record the trust-breaking behavior after verification, or establish a corresponding blacklist to restrict the future use of trust-breaking users. It will increase the cost of trust-breaking and reduce the occurrence of trust-breaking behaviors.

8.2 Collaboration Between Self-governance of Urban Sharing Platforms and Government Governance The sharing platform is an independent resource system. At present, there are many problems in the self-governance within the system, such as access, taxation, credit investigation, etc., which requires the government to play a corresponding role and realize multi-dimensional collaborative governance of the platform.

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8.2.1 Building an Access Mechanism for the Sharing Economy Industry Based on Fair Competition and Security In addition to the technical barriers of the sharing industry and the access threshold like the advantages of incumbent enterprises, the government needs to comprehensively consider the excessive competition, resource occupation and the impact on traditional industries caused by too low threshold. Therefore, from the perspective of realizing fair competition and industry security, a layer of external access barrier should be set up for the sharing platform, specifically including the following two aspects. 1. Piloting urban space resource utilization permit trading This is the access established with a view to avoiding excessive occupation of urban resources by sharing platforms, and rationally planning urban space. The urban space resource utilization permit trading is similar to that for carbon emissions. Taking the release of shared bikes as an example. The government can control the total number of bikes by issuing the release right license of the initial bikes, allowing the license plates to be traded through the designated platforms, and judging the changes in market demand by the trading price of the license plates, so as to reduce the risk of over-release or under-release. Suppose there are two bicycle enterprises, Enterprise A and Enterprise B. Under the initial quota setting, each enterprise’s annual bicycle quantity limit is 1 million, which both enterprises strictly abide by. However, due to the increasing market share of Enterprise B, the release volume soon reached 1 million, while the market share of Enterprise A is declining, so it only needs to maintain a release volume of 500,000 vehicles. At this time, Enterprise B proposed to Enterprise A to purchase its urban space resource utilization license of 500,000 vehicles. If city authorities allow this transaction, a license to use a new scarce resource of urban space is created. The essence of the urban space resource utilization license is the free transfer of the release volume, which is regulated by the market and whose price is controlled by supply and demand. The competitively advantaged enterprise is willing to pay a higher price for the license, while the inferior enterprise will naturally sell its excess license. According to Coase’s law, in a market where licenses are freely traded, regardless of how the initial licenses are allocated, the final market allocation will be efficient as long as transaction costs are zero. This initial bicycle license can actually be called the urban space resource utilization license. The license transaction can be completed through open bidding, which effectively prevents the existing oligopoly from monopolizing the market and ensures the entry of subsequent innovative enterprises, which is conducive to the competition in the shared platform market. At the same time, urban managers can better carry out urban space road appearance cleaning services, orderly use of street functions maintenance services and effective use of shared bikes management services through the income of paid use of permits, so as to improve the level of urban management. The benefits

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brought by shared bikes can therefore be optimized among different subjects such as the government, enterprises and consumers. 2. Promulgating supplementary regulations on laws and regulations applicable to the sharing economy This is the access established with a view to increasing the safety of shared behaviors. The groups of organizations participating in the sharing economy have always been in the gray zone between enterprises and individuals, and between public and individuals. In this model, both service providers and participants may become vulnerable groups, whose security is an issue of great concern. For the supply side, practitioners involved in the provision of shared services cannot enjoy the same rights protection provided by the Labor Law as professional workers in traditional industries. Workers in the sharing economy generally have a large labor choice space and high freedom, and do not need to be attached to enterprise employers. Therefore, the practitioner and the platform form a labor relationship with no compulsory binding force. Although it is very flexible, the instability of the service increases the risk for the platform, and enterprises also avoid the responsibility of labor protection, which increases the risk of employment protection for workers. For the industry that relies on the crowdsourcing model of the Internet, the current laws are obviously not applicable. Therefore, supplementary laws and regulations are issued to regulate and restrict the enterprises and practitioners of the sharing platform, so as to improve the stability and security of the service quality. For the demand side, ensuring security during the use of shared products is the primary issue for the government to consider. The security risks involved in sharing include personal security and information security. Personal safety risks are mainly safety problems that occur when shared cars are being taken or shared rooms being rented. As the need for personal safety is the most basic demand of the transaction, it calls for the mandatory regulations of the government. For example, a joint public security system is needed to check the criminal record of hitch ride drivers. The main reason for ensuring information security is that participating in the sharing behavior may easily cause the leakage of personal information. Both parties in the sharing behavior are in an open state on the Internet platform, and everyone can exchange information resources on the platform. The platform contains a large amount of user information, and improper protection of information will bring great security risks. A State Information Center survey of 174,000 users on the Ant Financial platform found that nearly 70% of users had experienced personal information leakage caused through the use of sharing economy products and services. If the risk of information leakage is high, it will directly affect the public’s participation in the sharing economy. At present, regulators lack a punishment mechanism for information leakage on sharing economy platforms, which makes it difficult for users to protect their rights. Therefore, the government needs to force sharing platforms to increase information security and technological input from the periphery, so as to maintain security of users’ information and transaction.

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8.2.2 Adjusting Taxes According to Local Conditions City and state officials around the world are trying to figure out how to levy taxes on sharing platforms. Strikes in traditional industries brought about by the tax imbalance put the government under great pressure, so how to set tax rate and collect taxes remains a problem. For example, in response to the conflict between traditional accommodation and homestays caused by tax injustice, many places in the United States have issued a ban on Airbnb short-term rentals. Although the conflict between industries has been alleviated, many Airbnb hosts are unwilling to accept this, which reduces the vitality of homestay participation. If sharing economy platforms cannot be made to pay taxes in a relatively fair way, inequality will become more and more obvious and social conflicts will become more and more prominent. 1. Taxation on sharing platforms First, the government needs to integrate the sharing platform enterprises into the tax scope of ordinary enterprises for unified management. Secondly, according to the scale of income obtained by sharing platforms, they can be compared and matched with traditional industries to determine a reasonable tax rate. Thirdly, according to whether sharing platforms can bring positive externalities (such as energy saving and emission reduction), the size of positive externalities is measured and a certain percentage of tax exemptions are set up. Finally, the government can levy adjustment taxes on the sharing economy according to the “territorial principle”, so as to encourage sharing platforms to keep the profit sectors within their geographical scope and contribute to the local fiscal revenue. For example, after bike-sharing was introduced, congestion in Beijing, Guangzhou and Shenzhen had decreased by 7. 4%, 4. 1% and 6.8%, respectively, according to the research data released by the Research Institute of the Ministry of Transport in September 2017. In addition, in terms of energy conservation and emission reduction, bike-sharing can reduce gasoline consumption by 5–10%.1 For such platforms with positive environmental externalities, partial tax relief policies can be implemented to encourage business and public participation. 2. Taxation on individual participants’ profits In the traditional trading model, the sale of goods or services by individuals is only an accidental phenomenon, while the emergence of sharing economy intermediary platforms makes the role of individuals in social production and life more complicated. An individual can be either a consumer or a provider of shared goods or services. Under sharing economy, individuals also have the demand for invoice deduction. In the traditional transaction model, entity organizations are taken as the object of taxation, and VAT and other transfer tax systems such as “tax control by invoice” are adopted, which are difficult to adapt to the change in the form of transaction subjects. 1

Source: http://news.163.com17/0923/17/CV1KGTUA000187VE.html.

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If the tax authorities issue invoices on behalf of individuals, it will bring a huge scale of collection costs, but also have a negative impact on transaction efficiency. This means that when imposing indirect taxes, the government needs to establish a tax legal framework suitable for individual collection, and solve the problem of turnover tax management when individuals provide goods or services (Yang et al. 2017).

8.2.3 Post-event Management: Punishment and Reward The purpose of government regulation on the sharing industry should be to maintain good industry order and protect participants. As individual behavior plays a major part in sharing economy, the risk of sharing behavior will continue to expand once any of the two sides of the transaction have broken trust. Therefore, the main task of the government is to build a sound enterprise credit investigation system and individual credit investigation system to protect the interests of the participants in sharing economy from being damaged equally. Considering that the self-governance of sharing platform lacks certain compulsory force, the government can use administrative intervention to make a ruling on individuals, enterprises or behaviors that break normal trading rules and punish them by coercive means. Meanwhile, individuals, enterprises or behaviors that promote the healthy and orderly development of the sharing industry will be rewarded. In 2013, China established a blacklist system for persons subject to enforcement for trust-breaking. In recent years, efforts have been intensified in implementing joint punishment, and restrictions have been placed on the issuance of bank credit, travel and accommodation for trust-breaking persons, which has exerted a social influence. The development of sharing economy makes it possible for the punishment mechanism for trust-breaking to play a larger role in order to strengthen the deterrent power of the mechanism and form a demonstration effect. If the platform can link individual trust-breaking behaviors in sharing economy activities with social credit investigation records, the high cost of trust-breaking will form external constraints on individual behaviors to some extent and regulate their conscious compliance with rules (Zhang 2017a, b). Further, in terms of regulatory intensity, the current international regulatory methods are too direct and tough, such as restricting access and issuing bans. Although such governance approaches can quickly solve existing conflicts, they also interfere with the normal development of the sharing economy industry and reduce economic efficiency. If the intensity of regulation is too low, the market will be out of order and the security risks will be serious, leading to low enthusiasm on the part of participants. If regulatory intensity is too high, effective competition will be restricted and effective supply will be reduced, resulting in insufficient vitality of the formal market and the frequent occurrence of black markets. Therefore, after finding out the access way, we should further find the optimal balance between regulatory intensity and market vitality, which is one of the future research directions of the author.

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8.3 Social Co-governance of Urban Sharing Platforms As the most extensive participants, the public can organically integrate with the government and platform self-governance from the aspects of improving the credit investigation system, community supporting facilities, timely feedback, etc., to realize multi-dimensional collaborative governance of urban sharing platforms.

8.3.1 Improvement and Communication of the Credit Investigation System Sharing economy is a kind of credit economy in essence. If there is no credit at both ends of the service, there will be no transaction. The construction of our credit system and related systems is still in the initial stage, but the emergence and rapid development of sharing economy raises higher requirements for the construction of credit system, and boost reversely the construction of our credit system. At present, the government has established a unified social credit code system for enterprises. The National Credit Information Sharing Platform2 set up by the Development and Reform Commission of China is connected to various departments of the country and all provinces, autonomous regions and municipalities. The Credit China website provides one-stop credit information inquiry for the society. The information has included the basic information of enterprises, administrative penalty information, administrative license information, red list and blacklist information, and financial institution business information, etc. For the sharing platform industry, how to maintain their own information is the key. China’s personal social credit system is not as complete as the corporate credit information system. China has just started to build the personal credit information database. However, due to its large volume and numerous industries, transactions and behaviors involved, it is very difficult to improve it quickly. Therefore, the participation of the public, community and sharing platform enterprises is needed. Because the construction of credit system needs strong technical support, we can closely combine the development trend of shared data credit investigation, make full use of the credit information data generated the sharing economy, make up for the shortage of a single source of information in the traditional credit investigation system, so as to improve credit information and better support the development and growth of new business forms such as sharing economy.

2

Relying on the construction of the national e-government external network, the National Credit Information Sharing Platform was initially completed and put into operation at the end of 2015, realizing the collection, sharing and application of credit information by various departments and local governments, providing effective support for joint punishment and incentive, and improving the level of cross-department and cross-region credit cooperative supervision and service.

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8.3.2 Improvement of Sharing Supporting Facilities The reason why the development of many sharing products is limited at present is the lack of supporting facilities, especially reflected in the problems of parking spaces for shared cars and charging points for electric cars. Some cities and regions in China are already experimenting with parking space sharing. According to a survey conducted by Chengdu’s Private Car Spot APP, which specializes in sharing parking spaces in the city, Chengdu has nearly 2 million fixed parking spaces and more than 800,000 registered parking spaces with real estate rights within the city. The vacancy rate of private car space in daytime is 50%, the vacancy time is 8 h, the value of the space is 2 yuan/h; the vacancy rate in nighttime is 15%, the vacancy time is 14 h, the value of the vacancy time is 1 yuan/h. All told, the vacancy value of Chengdu is 8 million yuan every day, which means $3 billion worth of resources are wasted every year.3 Therefore, if parking space sharing can be realized, the utilization rate of urban space can be significantly improved, and the problem of parking in the city can be solved. However, there are two main difficulties for parking spaces in the shared community. (1) The cooperation degree of the property management company is not high, private cars outside the community cannot enter, and the business cannot be carried out. The reason is that considering the privacy of the residential area, some property companies do not allow outside vehicles to enter, since the risk and responsibility for the property management is larger. (2) The property owners are not cooperative and offer no source of shared parking space. The primary reason lies in their concern about the safety of their community; with the entry of outside vehicles comes the potential security threat, which serves to put the owners off. Secondly, the identification of the responsibility for car scratching or damage remains a problem, whether the vehicle belongs to a property owner or someone outside the community. Finally, such problems as trust, parking overtime, and parking not according to the regulations remain to be solved. If the above contradictions cannot be solved, it is difficult to realize the sharing of private car parking spots. In this regard, some places have provided the sharing of parking spaces in office areas. For example, 76 parking spaces of Shenyang Municipal Construction Commission are open to residents of nearby communities for free from 19 to 7 the next day. The Municipla Government of Qionghai City, Hainan Province used public idle land to build shared parking lots. A ledger of available parking resources will be set up in Xicheng District, Beijing to plan new and shared parking spaces, and coordinate with the CPC organizations of work units in the district to promote the sharing of parking resources. In addition to parking spaces, for the many operators of new energy vehicle shortterm rentals, they are more concerned with the problem of charging. Shanghai is making new exploration in the promotion of new energy vehicles, and a number of enterprises have launched private charging pile sharing service, a kind for electric pile sharing developed from private charging piles. After the residents have applied for 3

Data Source: Chengdu Economic Daily, June 21, 2018.

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private piles, companies will change them into smart piles or install shared modules in the original piles available to others. They are not only cheaper than public charging piles outside, but also very convenient. With the increasing number of new energy vehicles, the public’s demand for charging piles is more intense, so it is obviously difficult for the government alone to invest. According to the relevant requirements, a new community must be equipped with public charging piles of no less than 10% of the parking space, change private piles into electric sharing piles, so that some private piles can improve their utilization rate. In this way, resources can be better used, investment greatly saved, and the imbalance adjusted between supply and demand, to cater to the public’s demand for shared electric piles. To turn private piles into shared electric piles, a perfect supporting service system is needed. If it is not clearly regulated, it could lead to the reoccurrence of previous problems facing bike-sharing. First of all, it may increase the management cost of the community. Some vehicles that are outside the community are parked and charged randomly, which will bring hidden dangers to the security of the community, create various frictions and conflicts and problems to the property management of the community. Secondly, installing charging piles proves to be easy for new residential areas but difficult for old ones, and the transformation of private piles into shared electronic piles is not a cure-all where parking spaces, power supply facilities or safety factors are concerned. Some car owners are reluctant to share their charging piles because of safety concerns, while others hope that there should be fixed shared piles in the community with no mandatory one-car one-pile requirement. How to guarantee the rights and interests of each citizen needs the coordination of relevant departments. Finally, in the shared electric pile service there is the issue of how to share the responsibility. Once there is a safety problem, there should be a clear definition of whether the responsibility should be borne by the enterprise promoting shared electric piles, or by the providers of electric piles, or by the users. The emergence of shared electric piles undoubtedly has a positive effect on straightening out the relationship between supply and demand and adjusting the use efficiency of charging piles. For the more scientific and rational development of shared electric piles, the relevant departments must further improve the related supporting system of shared electric piles to guarantee the rights and interests of all parties concerned. A contractual relationship should be established between enterprises, electric pile providers and users, according to which more electric vehicle owners can bring convenience not only to themselves, but to other owners as well.

8.3.3 Community Co-governance of Urban Sharing Platforms Community is the basic unit of the city, so community sharing trust is an important foundation for the promotion of urban sharing platforms. Community is the most convenient area to form offline sharing. Community members increase recognition,

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mutual trust, communication and interaction through sharing activities, and enhance the predictability of their interactional behaviors through self-discipline, platform norms and supervision. Therefore, when the city with the community as the unit meets the sharing economy, the interaction between all strata within the geographical scope of the community becomes closer and closer, and the individuals’ credit and credit basis in economic activities are given more and more attention, which will also help the individuals to maintain their image in the community interaction. Community sharing economy has gradually been widely accepted by urban communities. It not only incubates the new community business forms, new economic models and the infinite potential of community economic development, but also profoundly affects the social structure and social relations. Community sharing economy and community integration interact and promote each other at different levels, which is not only due to the overlapping, reorganization and transformation of space, resources and communities within the community, but also is the process and result of the upgrading of the community trust structure of the interestand relationship-driven community values, interpersonal trust and market trust, and mutual construction and win–win (Chen and He 2017).

8.3.4 Reconstruction of Urban Public Space From the perspective of urban space, the sharing platform works both ways. On the positive side, the sharing economy model changes the traditional economic model by simplifying transaction levels and customizing services, which is finally reflected in the space and plays a role in promoting the utilization efficiency and quality of urban space. On the negative side, the spatial development right of sharing economy has not been clearly defined, and there is a lack of institutional guarantee in the allocation of urban space. In its independent development with the absence of relevant supporting regulatory measures, it is inevitable to invade the original urban public space, easy to lead to excessive supply of services, resulting in space crowding and other negative effects. Therefore, different from the fixed location and scale of traditional service facilities, the services provided by sharing economy no longer have to be concentrated in a specific facility space. With the person + communication terminal becoming the service output port, people can get the sharing service through mobile phone anytime and anywhere. Under sharing economy, the spatial organization scale of cities is more flexible, and even small and micro spaces can meet the needs. With the gradual establishment of decentralized shared space, the layout of urban space will be more refined. Fixed public service facilities and “flowing” multi-scale shared service scenes are intertwined, jointly improving the service quality of urban space. Sharing economy not only breaks through the original space usage habits in terms of scale, but also divides the space in terms of time, resulting in increased uncertainty of space. That is to say, in the future, it is difficult to describe the nature and use state of a space with a single scale and function, and mixed and multiple dynamic

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space characteristics are more prominent in the era of sharing. Obviously, the urban organization model based on functional blocks in traditional planning cannot adapt to this change, and a new spatial platform needs to be found to integrate the supply and demand sides and all kinds of shared spaces. In the future, based on the concept of sharing, it is necessary to reconstruct the organizational form and space use model of community, so as to make it become the basic organizational unit of the shared city and enhance its vitality (Nie et al. 2018; Chu and Mao 2016).

8.3.5 Establishment of Sharing Platforms of the Urban Agglomeration In the context of the rapid development of urban agglomerations in the world, the integration of urban agglomerations has become a general trend of regional integrated development, which has had a profound impact on the development of the world political and economic pattern, and has gradually risen to be the important content of national development strategy. With the further development of sharing economy, sharing platforms can become a new force to connect cities, and urban agglomeration has become a new frontier for the future development of sharing platform. The concrete interaction includes the following three aspects. First of all, the strategy of sharing platform within urban agglomeration can be consistent with the strategic objectives of each city for the realization of the incentive compatibility. Due to the different resource endowments among cities, the sharing platform can fully consider the differences in resource sources to achieve maximum resource complementarity and avoid duplication. Secondly, the current urban agglomeration is prone to resource waste due to information asymmetry. The sharing platform can be used as an effective channel of information transmission for the promotion of the maximum utilization of resources. Finally, the economic development level of various cities in the urban agglomeration is not consistent, so the sharing platform can be used as a link to realize the sharing and reasonable distribution of interests. The co-governance of sharing platform self-governance, government governance and social governance sorted out in this chapter is summarized in Fig. 8.2.

References

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Self-governance of

Industry alliance jointly setting up access standards Fully activating idle resource sharing Building a public information feedback platform

sharing platforms

Collaborative government governance

Co-governance of society

Access based on equity and security Taxation of platforms and individual beneficiaries Mandatory punishment of rule breakers

Supplementing social credit information Improvement of shared supporting facilities Promoting community sharing Reconstruction of urban public space

Fig. 8.2 The multiple-dimensional collaborative governance of city sharing platforms

References CHU Yan储妍, MAO Mingrui茅明睿. Symbiosis City -- Research and thinking on sharing economy and urban renewal//Planning 60 Years: Achievements and Challenges -- Proceedings of 2016 China Urban Planning Annual Conference (06 Urban Design and Detailed Planning). Beijing: China Urban Planning Society, 2016. CHEN Jing陈晶, HE Junfang何俊芳. Trend and mechanism of community sharing economy promoting community integration -- A case study of Beijing Community S sharing life. City Watch, 2017 (5): 100–109. NIE Jingxin聂晶鑫, LIU Helin刘合林, ZHANG Xianchu张衔春. Characteristics, spatial rules and planning strategies of sharing economy in the new era. Planners, 2018, 34 (5): 5–11. YANG Jinliang杨金亮, CHEN Yizhong陈义忠, KONG Weibin孔维斌. The impact of sharing economy on tax revenue and tax response. Tax Research, 2017 (5): 46–50. ZHANG Jie张杰. Credit Dilemma and Solutions in the development of sharing economy in China. Economic Review, 2017 (8): 75–80. ZHANG Ni张倪. Sharing model and the future of urban transportation. China Development Observation, 2017 (12): 52–55.

Chapter 9

Conclusion and Prospects

Since sharing economy is highly dependent on the density of population distribution of cities and the support of Internet technology, this book has studied, from the city level, the development model, current situation of sharing platform and its mechanism of influence on urban construction, and found many problems with its governance and contradictions between the platform and urban public service facilities, government supervision and other aspects. An exploration of the connotation and essence of the sharing economy shows that the sharing economy platform has the characteristics of self-governance, demonstrating obvious advantages in saving transaction costs and promoting the efficiency of bilateral market. However, there are defects in the governance of urban sharing platforms both at the industry level and the government level. In this regard, by further sorting out the international management experience of urban sharing economy platforms, we can see that there are contradictions between security and innovation, between old and new industrial organizations, and such problems as negative externalities, information asymmetry. At present, a regulation commonly adopted in the world involves direct restriction of access and other strong governance measures designed to reduce unfair competition and security risks, but such regulation is often at the expense of the improved economic efficiency brought about by sharing economy. Starting from Chap. 5, based on the CPRs theory proposed by Ostrom, this book has explored the principles and contents of self-governance of sharing economy platforms, built the main framework of self-governance of the platforms, and explored the possibility of achieving coordination with government regulation and community management. Further, an in-depth research of the platforms of sharing in accommodation, office, car and bike as typical industries reveals that self-governance of China’s sharing platforms generally has difficult problems such as easy entry threshold, tax evasion and lack of credit investigation. Therefore, the government needs to make up for the defects of self-governance of sharing platforms by maintaining fair competition, protecting transaction security and improving the credit investigation system.

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9_9

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At the same time, community, as the basic unit of the city, can also play a supplementary role through information feedback, perfection of the support system and other means. The sharing economy is developing rapidly around the world. While providing a more efficient way of allocating resources, it has also brought some new problems and contradictions. Both the supply side and the demand side, as well as sharing platform enterprises, all expect the government to play a better role in its management and guidance to reduce the ruthless competition in the industry, disorderly information release, product damage, public accidents, difficult refund of deposit and other problems. Sharing pursues the cultural concept of mutual help, requiring trust and interaction among people. It encourages the formation of a dynamic social behavior to constantly strengthen sharing, cooperation, socializing and loyalty between individuals. As the forms of sharing evolve, shared objects will become vehicles of trust between strangers.

Postscript

This book was based on my post-doctoral research work report completed during my two-year research in the Management Science and Engineering Post-doctoral Station of East China University of Science and Technology. In a large sense, the choice of this topic derived from my impulse to follow the trend of sharing economy, which reached a small peak in 2016–2017, followed by a rapid decline. Since I have always been concerned about resource conservation, environmental protection and other related issues, I took the impact of sharing economy on resources and environment as the starting point, and applied for the Postdoctoral Scholarship Project and the Humanities and Social Science Youth Project of the Ministry of Education of China. Fortunately, both of my applications were approved, which encouraged me to move on. In 2018, when I was about to leave East China University of Science and Technology to take a post at Donghua University, Professor Wu Baijun, vice president of East China University of Science and Technology and one of my mentors during my doctoral study, came to me, hoping that I could contribute with my post-doctoral report to a series of books on urban social governance chief-edited by him. Moved by the trust of my teacher, holding the idea that I could continue to learn from him, I eagerly accepted this task and began to write the first draft of the book. Self-governance theory is a classic theory of public economics. With the background of industrial economics, I was at a loss as to how to connect the CPRs theory with sharing economy. Then, Professor Wu kindly recommended to me some classic coursebooks, and helped me clarify the relationship between self-governance and the operating mechanism of sharing platform. All this served to bring into shape the core theoretical framework of the book. Completing this book was a journey of continuous learning, so I would like to thank Professor Wu, who helped charter my path with invaluable advice, as well as Professor Yang Shangguang, Professor Yu Lihong, Professor Wu Yuming, Professor Tang Youcai, Professor Pan Chunyang and so on. As I was adding the final touch to the book, I found that there were still many key problems to be solved, including an in-depth investigation of enterprises, data

© East China University of Science and Technology Press Co., Ltd. 2023 J. Li, Multi-dimensional Collaborative Governance of Urban Sharing Platforms, Public Economy and Urban Governance in China, https://doi.org/10.1007/978-981-99-3974-9

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capture, theoretical model construction, etc. Therefore, I applied for and am now hosting the National Natural Science Fund Project titled “Self-governance sharing platforms from the perspective of resource redistribution”. Based on the research results of the current book, this project will further explore the mechanism of impact of sharing platform self-governance on resource allocation.