Sharing cities: The magic of indirect reciprocity

The sharing economy is entering the mainstream, with corporates like BMW getting on board. But how far can sharing cities boost local economies and communities, asks David Boyle?

One of the peculiar findings of the UK census in 2001 was that half the UK population lived within half an hour of where they were born, and that this proportion was rising fast.

This caused some scratching of heads, but the reason is pretty clear.  House prices are now so high that both partners have to be in full-time work to afford a mortgage.  That means they need to live near their parents or in-laws to provide childcare during the day.

The implications of this are quite far-reaching.  For one thing, it isn’t exactly globalisation. For another, when house prices are ruinous and when the economy is faltering – both of which conditions may now be semi-permanent – we really need each other.

The Labour government tried to clamp down on informal childcare, even by grandparents. But in practice, babysitting is what makes the world go round.

It is mutualism in a sense, and it used to thrive in the poorest communities.  The tragedy is that the poorest communities, after decades of regeneration, often lack the trust and social capital to make it possible any more.

That is why interest is rising in how new technologies can be used to extend these kind of networks into other areas. Like time banks or crowdfunding or couchsurfing or food sharing, and whatever other innovative sharing idea human ingenuity can imagine –  like Sorted (errands), Bla Bla Car (long journeys), even Borrow My Doggie.

It doesn’t actually require technology. Babysitting circles pre-date computers, let alone the internet, but being able to do things online certainly helps – for some reason, it seems to provide the basics for trust to be possible.

Nor is sharing a very new idea. The very first detailed description of life in London, by William FitzStephen in the 1180s, describes a public cookshop by the Thames at Walbrook where people came to share the cooking of their meals.

The Sharing City
But the so-called ‘sharing economy’ is taking American cash-strapped cities by storm, led by cheerleader Gavin Newsom, a former mayor of San Francisco, and author of Citizenville, about how the digital economy is reinventing government.

His successor Ed Lee has just set up a Sharing Economy Working Group, charged with having ‘a comprehensive look at the economic benefits, innovative companies and emerging policy issues around the growing sharing economy’.

The San Francisco area has already given birth to Airbnb, which lets people earn money by renting out their rooms to travellers, Taskrabbit for local errands, Getaround and RelayRides for local car-sharing.

The web magazine Shareable held a summit on sharing in the city in 2011, and has worked closely with local officials to extend the idea to sharing parking spaces, workspaces, urban agriculture and tools.

What is fascinating about the sharing economy is that it borrows from some of the free market enthusiasm of Silicon Valley and knits it together with some of the basic values of mutualism, and there appear to be economic benefits for the cities that encourage it too.

San Francisco estimates that Airbnb brought $56m into the city via the hosts renting out rooms, and supported local businesses to the tune of $43m. Compared with tax breaks, subsidies or wholesale regeneration, it is extraordinarily cheap.

It is also based on the assumption that we use our resources extremely badly.  There are empty rooms and parking spaces everywhere.  We use our power drills on average less than one day a year, and our mowers only maybe seven times a season.

We have a great deal of perfectly good junk which can be sold on, traditionally through car boot sales, or online through Freegle, the UK version of Freecycle.

If you add in the capacity to do a bit extra for neighbours – and the fact that 15 million tons of food gets thrown away in the UK every year – then you get an innovation like Casserole Club.  This encourages people to cook an extra portion of the main meal, and emerged in Reigate and Banstead thanks to the digital consultancy FutureGov.

Or FareShare, which used food that would otherwise be thrown away to produce 10m extra meals last year.

These ideas are also on the political agenda in southern Europe, where dwindling funds are forcing local government to think about how they can help local people share more effectively.

In Spain, as in so many other places, the sharing economy has emerged partly out of the counterculture born of protest, but partly from more practical ideas like Libroscompartidos.com, which shares school textbooks.

Spanish cities have also been backing the time bank phenomenon, which has emerged independently from similar ideas in the UK and USA.  There are now nearly 400 time banks in Spain, and a similar number in Italy, which are finding ways to share skills and time in communities, just as they are in the UK.

One of the main organisations involved is the Barcelona-based NGO Salut y Familia, which now has 16 time bank offices across Barcelona and has been spreading their expertise to Portugal and Chile.  It is also involved in using their growing network to train people in basic skills and to help them get jobs.

The Italian time banks have recently spread to Bulgaria and Greece.  The UK-based consultancy Spice is busily spreading similar systems in partnership with a range of public sector partners, from the City of London Corporation to the Welsh government.

In France, the economist Philippe Aigrain has become the inspiration for the sharing economy, part of a phenomenon known as economie solidaire. Ouishare is also one of fastest growing business websites in the country, and 60% of the population now use second hand markets and 37% use group purchasing.

The private sector has also recognised some of the possibilities: BMW’s DriveNow offers carshares in cities.

How much is the sharing economy worth? 
One estimate puts the value of the exchanges worldwide at about £310bn, but actually it is impossible to know – especially whether this is new money, or whether it is simply moving the old money round a bit, like Airbnb.

Co-operatives UK recently published a report about some of the possibilities, concluding that we actually share less compared with a generation ago, with more homes occupied by single people and there are more cars on the road with single drivers.

But they also found a huge willingness to share.  Half the population say they would like to share time and resources locally.  A third say they would share their garden to grow vegetables and flowers.

The findings are different across the country. People from the north west are the best sharers; Londoners are the worst.

Other research suggests that UK adults already save about £99 a year, and make another £335 a year, by selling old goods, sharing rides and swapping childcare.  It suggests that the UK sharing market is already worth £22bn.

This was an estimate by the pollsters Opinium and Marke2ing, for The People Who Share, the London-based cheerleaders for the sharing economy.  They also say that 33m Britons are sharing already and another 14m are thinking about it.

Those who are sharing consciously are saving about £400 a year, and there is the chance to save up to £3,000 a year by using a share car service like Zipcar.

Can sharing change communities? 
Which brings us to the way this might change communities.  UK local authorities have not grabbed the sharing economy agenda as some of their continental or American counterparts have.

Some local authorities, like Lewisham and Islington, have got involved in time banks.  Hertfordshire have started their own with the help of crowdsourcing experts sliversoftime.com.

But it is energy pooling that really seems to be exciting local authorities, urged on partly by the enthusiasm for the idea by Climate Change Secretary Ed Davey.

The Local Government Association has been writing a legal template for more local authorities to help facilitate this, but already more than 100,000 households have signed up to collective switching schemes run by their council, and they are saving £10m between them.

There are now more than 65 councils running schemes along these lines, with local authorities acting as negotiator, starting with South Lakeland Council, which signed up a year ago with iChoosr, which pioneered collective purchasing in Belgium and Holland.

‘Deep down we all know that we probably aren’t getting the best deal on our energy bills but who has the time to shop around and go through all the hassle of switching supplier?’ said Peter Fleming, chair of the LGA’s Improvement Board. ‘The beauty of these schemes is that we do that all for you at no cost to the individual customer.’

Normally, this kind of sharing scheme might appeal first to the more confident or the better-off.  When local authorities get involved, it can spread much more widely.

‘By harnessing the collective purchasing power of our residents, we can help make it easy for them and prevent thousands more people from slipping into to fuel poverty,’ said Peter Fleming.

The sharing economy doesn’t please everyone. A New York judge has just decided that someone renting out his apartment on Airbnb was violating the state’s occupancy code.

The regulated small hotel sector in Amsterdam is also up in arms.  Sweden and Finland are due to start taxing time banks in the autumn.

Certainly there would be problems if sharing drove out legitimate small business, and there would be no great benefit for local authorities either.  But the struggle to open up spare local capacity will have local economic benefits if it helps households get by.

It isn’t clear how much the sharing economy can save local authorities in avoidable costs, and the tendency will be to put money in the hands of families with existing space or assets.

On the other hand, there does seem to be scope to help people avoid crisis by keeping them fed, or visiting them when they come out of hospital – a key time bank activity – or avoiding fuel poverty by cutting energy bills.

It isn’t exactly reciprocity, because often you are paying back to someone new – what the intellectuals call ‘indirect reciprocity’ – and it is often made possible by IT.

But here is the twist. Crowdfunding experts say that most funders remain local, just as they always did.  Time banks maximise local time.  The Casserole Club links up neighbours.

If the internet was supposed to make old-fashioned geography a thing of the past, then the ‘sharing economy’ seems to have turbo-charged localism all over again.

This may be why San Francisco and New York are among 15 American cities which have now signed a resolution to maximise their use of the sharing economy, together with an agreement – ominous this one – to agree standardised measures to work out the impact.

The sharing economy UK-style

By far the most effort by local government has gone into cutting energy costs by joint buying, and they are offering annual savings of between £60 and £200 per household.  These are the main success stories:

• Cornwall Together, a joint project between Cornwall County Council, the NHS, Community Energy Plus and the Eden Project and which is planned to cover the whole of Cornwall.

• The Big London Energy Switch Project covers 21 London boroughs and is targeted at vulnerable consumers, such as the elderly, the disabled and those on benefits.

• Norwich’s ‘Big Switch and Save’ project is open to all households within the city boundaries – just under 60,000, and 1,768 households have signed up so far.

• Oldham Council’s ‘Energy Co-operative’ has been so successful that all 14 local authorities that make up Greater Manchester have joined forces to offer 1.2 million homes the opportunity to join a joint collective switching scheme, offering fees from the new suppliers to fund community projects.

• Peterborough’s ‘Ready to Switch’ scheme now involves 12  local authorities and covers around 1.5m households, who are signing up at the rate of 800 a day – other councils in the partnership include Blackpool, Northumberland and Wiltshire.

• Surrey’s ‘Switch and Save’ was launched in December and is offering residents savings of up £250.