You’ve probably heard: This is the age of the sharing economy.
But, what exactly is the sharing economy?
It's a collaborative consumption where owners rent out something they are not using, such
as a car, house or bicycle to a stranger using these peer-to-peer services.
What companies like Airbnb and Uber do... is they connect buyer and provider through
smart technology, they represent a core part of the sharing economy business model.
At the same time, these new companies present regulatory challenges for governments, which
are struggling to keep up.
Kwon Jang-ho, takes a look at this environment in Korea, in the last of our three part series
on the Fourth Industrial Revolution.
Here's something that wouldn't have been possible just a few years ago.
"I have this handwritten Korean note.
The handwriting is pretty bad, but I'll take a picture of it and upload it onto this app,
where hopefully I will get a translation back from someone."
Flitto is a peer-to-peer, crowdsourced translation app that finds other multilingual users around
the world who are willing to translate, instead of expensive professional services or inaccurate
machine translations.
"Within about thirty seconds, I've received an accurate translation, even with my bad
handwriting."
It's the advancements in smartphone technology and the mobile internet that have made this
new service possible, and it's this combination of technological developments, dubbed disruptive
technology, that is changing traditional industries and business models.
Crowdsourced and sharing economy businesses were said to be worth 15-billion dollars in
2014, but that's expected to grow to 335-billion dollars by 2025, in addition to making up
half of the traditional rental market.
"Another name for the sharing-economy is the 'on-demand' economy.
In other words, it only works if the right service can be connected with the right person,
right away.
And so if you need a car right away, or a room to stay in, that's become easy to find
with the advent of smart technologies."
Speaking of needing a car, in Korea car-sharing is an industry that has really taken off in
the last few years.
With the tap of a few buttons, anyone can find and book a car nearby without waiting,
hire it in ten-minute chunks, and drop it back off where they found it, or even leave
it at a different location.
It's cheaper, faster and more convenient than traditional car rental services and more practical
for those who cannot afford or do not want to own a car.
But the growth of these new industries has not been welcomed by all quarters.
Uber and Airbnb, two pioneers of the global shared economy trend, have run into trouble
with governments and traditional industries all over the world, including Korea.
Airbnb was locked in legal disputes with the Korean government concerning tax and safety
issues, and Uber's main service was forced out of Korea in 2015 after pressure from the
government, taxi unions and negative public opinion.
Uber accused the government of being out of touch and said it risked getting left behind
the global trend.
Socar, one of Korea's biggest car-sharing companies, has also experienced legal teething
problems in the beginning.
Although it's still working with government to continue ironing out those legal issues,
they said it's as necessary for the industry to push the government as it is for them to
be accommodating.
"It's obviously difficult to anticipate what legal regulations will be needed in the future,
so it's up to the businesses to step up and challenge the existing laws that have not
kept up with new services, and then find a way to work with the government."
The Korean government is also now working with both Airbnb and Uber to try and find
mutually beneficial solutions.
Although the government has shown a willingness to support these new businesses, with the
country facing an economic slowdown, there is pressure to protect traditional industries.
"At the moment, protecting existing businesses is a priority for the government, and so growth
will be difficult.
It will take time for the sharing economy to really take hold, and it will require the
legal systems to become more accommodating."
Hopefully it won't be too late for Korea by then, but if more companies like Flitto and
SoCar continue to find success, the pressure will be on to put the requiste changes in
place.
Kwon Jang-Ho, Arirang News.