Nearly everyone has heard of the concept of a sharing economy and ride-sharing by now. From Uber to Didi Chuxing to Lyft there are hundreds of companies that have taken a shot at the new business opportunity. Countries are discussing legalizing this new field, just recently China made a milestone move as the world’s largest online car-hailing market by legalizing ride-sharing services. However, this on-demand business model has proven to be transforming more than just the transportation field and its benefits go far beyond boosting brands goodwill through a more sustainable transportation method. So what is the small nation of Estonia doing to be considered a pioneer in this new business field? And who really benefits from ride-sharing?
CURRENT MARKET SITUATION
Many countries around the globe have taken a rather hostile stand against sharing economy services. France, Madrid, Jakarta, Brazil have all witnessed violent protests against Uber – one of Silicon Valley’s most successful and dominant start-ups that challenges traditional industries and disrupts their business. Governments have pushed back heavily against Airbnb – only this year Berlin banned tourists from renting out apartments via the platform to protect affordable housing, while the current New York City law only allows a permanent resident to sublet their property for less than thirty days.
With a rather recent emergence as a credible economic field, sharing economy services are no stranger to controversies. Supporters claim ride-sharing services to be easy to use, good quality and safe, while opponents argue that government-backed compliance measures are in place for a reason and these illegal services undermine hardworking law-abiding taxi drivers. Concurrently with countries still trying to make sense of this, Estonia decided to embrace the new model by taking progressive steps towards becoming the first country to even consider legalizing ride-sharing.
The sharing economy revolution is really led by public demand. The rise of the app economy has happened incredibly quickly. Today, well over 60% of all Internet traffic now comes from mobile, and half of that is driven by apps. Estonians have proven to be open to new technology, with more than 70% of all phones sold in Estonia being smartphones. The impact of this smartphone-based sharing economy revolution is being felt in almost every industry around the world: from communications and commerce, to banking, entertainment and transportation.
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