Available via license: CC BY 4.0
Content may be subject to copyright.
COMMENT
The sharing economy promotes
sustainable societies
Zhifu Mi 1&D’Maris Coffman 1
A simultaneous improvement in both ecological and economic efficiency is
necessary to achieve the Sustainable Development Goals (SDGs). The new
sharing economy has potential to promote the needed shifts in collective con-
sumption behaviour, but better governance models are urgently required.
The sharing economy is an emerging economic model usually defined as a peer-to-peer based
sharing of access to goods and services, which are facilitated by a community-based online
platform. It focuses on the sharing of underutilised assets in ways which improve efficiency,
sustainability and community1. In economic theory, these platforms are essentially ‘club goods’
(a sub-type of public goods which are excludable but non-rivalrous), which have been char-
acterised as an elegant Coasian solution, which reduces transaction costs to nearly zero whilst
deterring free-riding2,3. The sharing model has been developing quickly in many service sectors,
especially in transportation and hospitality.
While the sharing economy provides a potential pathway to sustainable societies, conflicts
between business profits and social wellbeing can potentially arise. Service providers aim to
maximize corporate profits to shareholders and value to paying customers, while governments
aim to optimize wellbeing for all citizens4. There is a concern that some companies may use the
‘sharing economy’as a marketing gimmick to disguise profit-motivation and exploitation under
the pretence of making the society a better place. Governments on the other hand might be
considered overly optimistic regarding the role such emerging business models can play in
resolving a wealth of urban issues even in the absence of financial incentives or new regulations4.
We suggest instead that such conflicts are resolvable through cooperation between sharing
enterprises and governments. Public authorities should provide both economic and none-
conomic incentives to private operators who have passed a complete Life Cycle Assessment
(LCA) which estimates environmental impacts associated with all the stages of the shared
product’s life (or over a firm or project’s lifecycle), while sharing service providers should take
environmental protection and improvement of societal wellbeing as a Corporate Social
Responsibility (CSR) rather than a marketing ploy.
The sharing economy has positive environmental impacts, through a reduction in the total
resources required and it helps reduce pollutants, emissions and carbon footprints. In the
transportation sector, vehicle sharing behaviour can have a positive environmental impact by
decreasing the number of kilometers travelled. Such sharing activities can also stimulate long-
lived changes in consumer behaviour by shifting personal transportation choices from ownership
to demand-fulfilment. Similarly, bicycle sharing schemes can reduce the use of motorised
vehicles that usually consume petroleum products and generate emissions. In Shanghai, bicycle
sharing reduced carbon dioxide (CO
2
) and nitrogen oxide (NO
X
) emissions by 25,000 tonnes
and 64 tonnes in 2016, respectively5.
https://doi.org/10.1038/s41467-019-09260-4 OPEN
1The Bartlett School of Construction and Project Management, University College London, London WC1E 7HB, UK. Correspondence and requests for
materials should be addressed to Z.M. (email: z.mi@ucl.ac.uk) or to D.C. (email: d.coffman@ucl.ac.uk)
NATURE COMMUNICATIONS | (2019) 10:1214 | https://doi.org/10.1038/s41467-019-09260-4 | www.nature.com/naturecommunications 1
1234567890():,;
The sharing of commodities and services can also provide health
benefits6. The implementation of bike sharing programmes lead to
greater propensities to cycle among individuals who live in regions
where bike sharing services are available. Over ten thousand pre-
mature deaths are predicted to be avoided per year if all European
cities reach a target of a quarter (25%) of all trips made by cycling7.
However, despite these clear benefits, some studies have cast
doubts on the sharing economy’s environmental effectiveness and
intrinsic sustainability8,9. Fishman et al.10 suggested that bike
sharing can actually increase the overall motor vehicle usage if
inventory management is not optimised or when the effects of
bike re-distribution and maintenance are taken into considera-
tion. The phenomenon can be readily observed from the reckless
use of dockless bike-sharing in China11. In order to snatch market
share, sharing companies have placed excessive dockless cycles in
many Chinese cities.
In light of such ‘side-effects’the sharing economy will only
prove sustainable through the mutual cooperation amongst
public authorities, enterprises and consumers (Fig. 1)12. Firstly,
governments have a role to play in identifying the sharing models
that are most pro-social from a LCA perspective and supporting
service providers through both economic (e.g. lower taxes and
subsidies) and noneconomic incentives (e.g. communication
campaigns and labelling). In following such an approach, both
environmental and health benefits can be converted into eco-
nomic incentives for enterprises. In addition, governments need
to monitor emerging sharing models to mitigate against excessive
provision of sharing services, which has happened in many fields
as companies competed for market share.
Secondly, sharing enterprises must set the sustainability of
sharing models as an objective rather than its use as a marketing
tool. They should commit to continuous development of shared
goods so that they can meet the standards set by the government
regarding LCA and can obtain or maintain eligibility for incen-
tives. The aim of LCA is to compare the full range of environ-
mental impacts of the shared products and services, and this
information is useful to improve efficiency and support policy.
The tax system on sharing activities should to be improved, as tax
evasion is very common in sharing economy. Governments
should make it a priority to use the tax collected from sharing
activities to promote sustainability, by providing incentives to
sharing enterprises and sustainability advocates to consumers.
Thirdly, as well as governments and enterprises, consumers—
owners and users of shared products—play a critical role in the
sustainability of sharing economy, as they are the most essential
participants in the sharing economy. Enterprises need to provide
sustainable information and options to consumers, and govern-
ments need to encourage consumers to select more sustainable
goods and services. Successful strategies for incentivising enter-
prises and nudging consumers will depend on cultural contexts,
but can include tax breaks to firms to encourage compliance and
partnerships with health, life and auto insurance companies to
encourage participation in appropriate bike or ride sharing
schemes by offering premium reductions for behaviour that
improves health, for example, or reduces congestion (and thus
risk of collision). Consumers need to enhance their environ-
mental awareness and make sustainability a key factor in selecting
sharing service providers and in voting for politicians who are
Renting fees
User
Owner
Government Life cycle assessments
Ta x
Sustainability identification
Service fees
Sustainable options
Sustainable options
Offer of shared goods
Sustainability advocates
Sustainability advocates
Vote
Vote
Economic/ noneconomic incentives Enterprise
Shared goods
Fig. 1 Framework for sustainable model of sharing economy. The framework involves four participants, including governments, enterprises, owners and
users. Governments identify the most pro-social sharing models and support service providers through both economic and noneconomic incentives.
Enterprises estimate the environmental impacts of sharing activities from life-cycle perspectives and provide sustainable information and options to
consumers. Owners and users of shared products make sustainability a key factor in selecting sharing service providers
COMMENT NATURE COMMUNICATIONS | https://doi.org/10.1038/s41467-019-09260-4
2NATURE COMMUNICATIONS | (2019) 10:1214 | https://doi.org/10.1038/s41467-019-09260-4 | www.nature.com/naturecommunications
prepared to demand corporate social responsibility from the
sharing economy.
Sharing enterprises also need to develop relationships with the
local authorities and follow the related regulations in order to
achieve long-term viability. Here what is needed is more explicit
acknowledgement by local and national governments of the
importance of the sharing economy for achieving SDGs; the
challenge is to better align the interests of both new and old
businesses, local governments, and the national economy.
Unfortunately, what too often happens is that these new sharing
platforms, with their rhetoric of disruption, position themselves
as orthogonal both to the state and the market (old businesses) in
sweeping away inefficient business models and upending old
regulatory regimes. Policymakers have to respond by partnering
with pro-social solutions, offering them local government support
in exchange for their assistance in mitigating the costs associated
with structural change.
Over the long-term, to ensure the viability and resilience of
sharing firms, their capital structures should be considered
carefully. Early community ride-sharing services, when they
proved successful, often had to be sold to car rental companies to
maintain growth at scale. Most of the current players are privately
held, and will soon be taken public, possibly with outsized
valuations. If the ‘Unicorn Bubble’bursts and these initial public
offerings (IPOs) fail, a shakeout is inevitable, with some firms
emerging as Amazons and Ebays. In the very short-term, state
actors may be well-advised to wait until clear winners emerge, as
excessive leverage can end up harming stakeholders as well as
shareholders13. Alternatively, state actors might use concessions
and public procurement systems as a means of identifying those
firms that are best aligned with specific sustainability goals or who
score highest in the LCA measures.
At the same time, while sharing service providers play a crucial
economic role in coordinating and reducing transaction costs to
both customers and suppliers who are independent economic
agents voluntarily participating in a transaction, current plat-
forms tend to tilt consumer communication towards the interests
of customers without adequate regard for the interests of equally
vulnerable service suppliers. The role of supply chains in sharing
firms is largely under-researched, primarily because the sharing
economy presupposes a peer-to-peer model that does not always
exist in practice. Most bike sharing firms own the fleets of bicycles
(rather than allowing individuals to share their own bicycles
during idle hours), and as firms scale-up operations, their busi-
ness models change, e.g. platforms, like Ebay, originally designed
to facilitate sale of used goods, now primarily markets new
merchandise, some of which was even manufactured expressly to
be sold on Ebay. In order to assess the carbon footprints of
sharing economy firms accurately, their supply chains must be
examined in detail.
From the perspective of achieving the UN’s SDGs, the sharing
economy’s benefits of increased economic efficiency and reduced
information asymmetries can scarcely be considered untoward
developments, but the need for better coordination of national
and local government and a direct engagement with the firms
themselves is key to addressing dislocations and negative
externalities. Regulatory parity and public safety must command
the attentions of state actors. Over time, the sharing economy will
also help foster structural change towards lower carbon econo-
mies, but the empirical evidence for these effects is, as yet, mixed,
and there is a great deal of room for optimisation strategies, just
as there is a pressing need for more research to inform evidence-
based policy-making.
Received: 29 November 2018 Accepted: 3 March 2019
References
1. Heinrichs, H. Sharing economy: a potential new pathway to sustainability.
GAIA 22, 228–231 (2013).
2. Lobel, O. Coase and the platform economy In Sharing Economy Handbook
2018 (eds. Davidson, N., Finck, M., Infranca, J.) (Cambridge University Press,
Cambridge, UK, 2018).
3. Dakhlia, S., Davila, A. & Cumbie, B. Trust, but verify: the role of ICTs in the
sharing economy. In: Information and Communication Technologies in
Organizations and Society (eds. Ricciardi, F., Harfouche, A.) (Springer
International Publishing, Cham, Switzerland, 2016).
4. Cohen, B. & Kietzmann, J. Ride on! Mobility business models for the sharing
economy. Organ. Environ. 27, 279–296 (2014).
5. Zhang, Y. & Mi, Z. Environmental benefits of bike sharing: a big data-based
analysis. Appl. Energy 220, 296–301 (2018).
6. Woodcock, J., Tainio, M., Cheshire, J., O’Brien, O. & Goodman, A. Health
effects of the London bicycle sharing system: health impact modelling study.
BMJ 348, g425 (2014).
7. Mueller, N. et al. Health impact assessment of cycling network expansions in
European cities. Prev. Med. 109,62–70 (2018).
8. Martin, C. J. The sharing economy: a pathway to sustainability or a
nightmarish form of neoliberal capitalism? Ecol. Econ. 121, 149–159 (2016).
9. Ricci, M. Bike sharing: a review of evidence on impacts and processes of
implementation and operation. Res. Transp. Bus. Manag. 15,28–38 (2015).
10. Fishman, E., Washington, S. & Haworth, N. Bike share’s impact on car use:
evidence from the United States, Great Britain, and Australia. Transp. Res.
Part D 31,13–20 (2014).
11. Zhang, Y., Lin, D. & Mi, Z. Electric fence planning for dockless bike-sharing
services. J. Clean Prod. 206, 383–393 (2019).
12. Demailly, D. & Novel, A.-S. The sharing economy: make it sustainable. Studies
3, 14 (2014).
13. Sabeti, H. The for-benefit enterprise. Harv. Bus. Rev. 89,98–104 (2011).
Additional information
Competing interests: The authors declare no competing interests.
Reprints and permission information is available online at http://npg.nature.com/
reprintsandpermissions/
Journal peer review information:Nature Communications thanks the anonymous
reviewer for their contribution to the peer review of this work.
Publisher’s note: Springer Nature remains neutral with regard to jurisdictional claims in
published maps and institutional affiliations.
Open Access This article is licensed under a Creative Commons
Attribution 4.0 International License, which permits use, sharing,
adaptation, distribution and reproduction in any medium or format, as long as you give
appropriate credit to the original author(s) and the source, provide a link to the Creative
Commons license, and indicate if changes were made. The images or other third party
material in this article are included in the article’s Creative Commons license, unless
indicated otherwise in a credit line to the material. If material is not included in the
article’s Creative Commons license and your intended use is not permitted by statutory
regulation or exceeds the permitted use, you will need to obtain permission directly from
the copyright holder. To view a copy of this license, visit http://creativecommons.org/
licenses/by/4.0/.
© The Author(s) 2019
NATURE COMMUNICATIONS | https://doi.org/10.1038/s41467-019-09260-4 COMMENT
NATURE COMMUNICATIONS | (2019) 10:1214 | https://doi.org/10.1038/s41467-019-09260-4 | www.nature.com/naturecommunications 3
