Why Singapore needs the sharing economy

Singapore has declared its plans to be a sustainable city. In the Sustainable Singapore Blueprint 2015, a policy document which maps out the country’s sustainable development strategies, the city-state has set out a collective vision that includes being a “car-lite”, zero waste nation by 2030.

It has also set reduction targets for its greenhouse gas emissions by 2030. Under Singapore’s pledge to the United Nations Framework Convention on Climate Change, it will cut its emissions intensity—that is, the greenhouse gases needed to produce every dollar of national income—by 36 per cent compared to 2005 levels.

Experts say that one largely untapped strategy for Singapore with huge potential is the sharing economy, where people use websites and mobile applications, or apps, to rent, lend, and swap goods and services with one another rather than buying them from shops or commercial companies.

April Rinne, a United States-based sharing economy consultant and World Economic Forum Young Global Leader, says that by encouraging people to pool existing resources instead of buying new goods, “there is no question that the sharing economy can help a society be more sustainable”.

With its high population density, technology-savvy society, compact urban layout, and a strong government commitment to efficiency, Singapore is perfectly poised to become a sharing nation, adds Rinne, who was in Singapore last month to speak on the sharing economy.

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An evolving economy

People have swapped, loaned, and rented items informally for centuries, but the sharing economy—also known as collaborative consumption, peer economy, and access economy, among other names—has gained formal recognition only in recent years.

The term has come to include everything from services that help neighbours lend each other household items and websites that allow a tourist to stay at a stranger’s home while on vacation, to apps that summon a driver at the tap of a button.

United Kingdom-based business consultancy PwC notes in a 2015 study that peer-to-peer lending and crowdfunding, peer-to-peer accommodation, and car-sharing are among the fastest growing sharing economy sectors globally.

PwC predicts that these sectors—along with online staffing, and music and video streaming—by 2025 will present a global revenue opportunity of US$335 billion, up from US$15 billion in 2013.

These new operating models certainly promise bigger business opportunities and profits, but they are also a chance to change how society uses resources, note experts.

Eugene Tay, founder and former president of the Sharing Economy Association of Singapore (SEAS)—an organisation set up in 2014 to promote the industry’s growth—notes that “car sharing or carpooling reduces the need to own a car, while the sharing of accommodation or co-working spaces reduces the resources to build more spaces”.

Members of SEAS include local start-ups such as item-lending services Rent Tycoons and Leendy, accommodation sharing site PandaBed and car-sharing firms CarPal and iCarsclub. International home-sharing giant Airbnb is also a member.

Other local enterprises include Carousell, an app for selling second-hand goods, and carpooling services like the Tripda app and, an online community.

Fenni Wang, co-founder, Rent Tycoons, says that “renting helps to reduce the wastage caused by avoidable purchases—for example, if an item is only needed for a one-off or short-term use”.

While there are no statistics on how these local companies have helped drive Singapore’s sustainability goals, global firms like Airbnb and on-demand ride service Uber have calculated their environmental impact.

Airbnb, for example, in a 2014 study, found that home sharing helps reduce water and energy use, greenhouse gases and waste generated compared to traditional hotel stays.

In North America, Airbnb properties used 63 per cent less energy than hotels per guest night, enough to power 19,000 homes for a year. They also consumed 12 per cent less water than hotels, which resulted in savings of 270 Olympic-sized swimming pools in 2013.

Staying in other people’s homes—most of which already have recycling facilities in place, and tend not to offer guests single-use toiletries like hotels do—also reduced waste, found Airbnb.

Car sharing or carpooling reduces the need to own a car, while the sharing of accommodation or co-working spaces reduces the resources to build more spaces.

Eugene Tay, founder and former president, Sharing Economy Association of Singapore.

Uber, meanwhile, says its vision is to have “many fewer cars on the road”. In addition to its basic service, called UberX, where people can use the app to call a driver in a few minutes, the company is also rolling out UberPool, which integrates carpooling into Uber’s standard business model.

First announced in August 2014 and launched in New York City in December that year. UberPool groups users travelling on similar routes and allows them to share a single ride—and the fare.

Not only does this allow passengers to save money, it can also reduce the number of cars on the road, says the San Francisco-headquartered company, which was founded in 2009 and now operates in almost 400 cities worldwide.

According to the company, for every fully utilised UberPool car, eight cars could be rendered unnecessary. This means that in a city like New York, UberPool could eventually result in 1 million fewer cars on the road.

Chan Park, Southeast Asia general manager, Uber, tells Climate Challenge that UberPool is likely to be launched in Singapore sometime this year.

Today, over 30 per cent of all Uber trips in Singapore start and end within 100 metres of a train station, Park shares. This likely means that “people are using UberX to complement their public transport use and bridge the first and last mile of their journey,” he says.

The first and last mile of a journey refers to the distance between a person’s home or office and the nearest public transport node, such as a train station. If commuters find it too inconvenient to bridge this distance—for example, if the walk is too long, or connecting bus services are too infrequent—they may find it more convenient to stick to using a car.

The government is already stepping up efforts to bridge this last-mile gap through measures such as improving bus services in residential neighbourhoods and providing ample bicycle parking at train stations for commuters.

To make it easier and more convenient for people to use bicycles to cover the distance between their homes and train stations, the Land Transport Authority (LTA) in July 2014 announced a study into how a public bicycle-sharing scheme could be introduced in the city-state.

Famous examples of bike-share programmes, where the public can simply rent a bicycle from one location and drop it off at another, include London’s Santander Cycles and YouBike, a public scheme in Taiwan’s capital city, Taipei.

The government is also exploring how shared autonomous vehicles—that is, self-driving cars—can overcome the last-mile challenge in another study, announced by LTA last June. These new vehicles could provide residents with a convenient last-mile solution, and encourage people to shift away from private car ownership, notes LTA.

Uncovering new opportunities

These reductions in new purchases, waste, and emissions are just the tip of the iceberg when it comes to how the sharing economy can help shape a more sustainable Singapore, say Tay and Rinne. But there are even more ways for the city-state to become a truly sharing nation.

Tay, for example, notes that most sharing businesses today operate on a peer-to-peer model, or in the business-to-consumer space.

“Businesses with underutilised equipment, vehicles, spaces and assets can share with other companies,” he says. If the government does the same, Singapore’s civil service could be “the first sharing government in the world”, he adds.

One government which has received much praise for its sharing economy initiatives is South Korea’s capital city, Seoul, says Rinne. In 2012, it launched the Sharing City Seoul initiative to promote collaborative consumption and resource sharing.

To use valuable assets like land more efficiently, the city’s leadership has opened up almost 800 government buildings for the public to hold meetings and events when they are idle.

Guided by a vision to make private car ownership obsolete by 2030, Seoul has also invested heavily in public bicycle sharing services and aims to have 1,200 car-sharing hubs in the city by 2030, up from 292 in 2013.

Similar public sector leadership could make a big difference in Singapore, says Rinne.

On its part, the Singapore government has already taken several steps recently to facilitate the growth of the sharing economy while at the same time addressing some common concerns regarding the industry such as safety, privacy, and proper taxation.

For example, given the popularity of home-sharing companies like Airbnb, the Urban Redevelopment Authority (URA) is re-assessing a law which states that it is illegal for a person to rent out their home on a short-term basis.

The agency last January embarked on a public feedback exercise to decide whether private residential properties in Singapore should be allowed to be used for stays shorter than six months. At the end of the feedback exercise, URA said that it is reviewing the matter and will announce details when ready.

Meanwhile, LTA has also taken steps to encourage people to carpool, a practice which results in more efficient car use and fewer vehicles on the road.

Until recently, drivers could not accept any compensation for offering others a ride, which discouraged them from going out of their way to offer strangers a ride.

But this changed last May when LTA passed laws allowing drivers to receive payment from passengers as long as it did not exceed trip expenses such as fuel and road tolls.

Virtually every city in the world is tackling the same uncertainties and regulatory challenges that Singapore is working on, says Rinne. When these issues have been addressed and sharing is the ‘new normal’, it could transform daily life for Singaporeans, she adds.

In an ideal scenario, every resident will tap on sharing services to make life more convenient and save money, and the government will use these platforms to better deliver public services, streamline its own operations, and fulfil the nation’s sustainability goals.

“This is not an unachievable utopia,” she says. “It is a bold ambition which is 100 per cent doable, and I am more confident that Singapore will get it right than other places”

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Sustainability in Drinks – Walking the Walk on Water

The recent problems that the Coca-Cola Co has encountered in India, and the launch by Diageo of its new Water Blueprint, underline once again just how central water stewardship is to the sustainability strategies of major beverage companies.

Water stewardship has become a critical element for all companies as they bid to make their businesses more sustainable and address the impact of climate change, but for beverage companies it arguably has an even greater significance as it is both a primary ingredient as well as a vital resource in the manufacturing process. Moreover, the unique relationship beverage companies have with water also affects how other stakeholders view them and their approach to water-related issues.

Sustainability initiatives are aimed both at reducing impacts and mitigating risk, including reputational risk. Sustainability laggards attract bad publicity, and history shows that campaigners are particularly vigilant when it comes to the water policies of major beverage companies. The past month has provided ample illustration both of the

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risks and the importance of having policies in place to mitigate them.

Tensions over how the requirements of bottling plants compete with the water needs of local communities and agriculture have dogged Coca-Cola’s progress in India over the years, and the issue emerged again last month when the state government of Tamil Nadu withdrew its permission for the soft drinks giant to build a bottling plant in the town of Perundurai. Development of the plant had been opposed vehemently by local communities and environmentalists concerned over its impact on groundwater resources. Comments by the chair of the Perundurai Environment Protection Trust reflect the degree to which Coca-Cola is targeted by campaigners. VM Kandasamy was quoted as saying: “This is a great victory for the people of Perundurai. We put all our efforts to stop Coca-Cola and we have succeeded.”

It is a measure of the extent of the challenges water stewardship represents that Coca-Cola continues to face such pressure in spite of positioning water as one of the three primary pillars in its sustainability strategy, along with empowering women and well-being. Only last month, the companyannounced the expansion of The Coca-Cola Africa Foundation’s (TCCAF) Replenish Africa Initiative (RAIN), committing a further US$35m to Pan-African safe water access and sanitation programmes aimed at reaching an additional 4m people by 2020.

The problems Coca-Cola has encountered in India speak to the particular risks that beverage companies face in water-stressed areas, which are so often also located in the emerging markets of the developing world.

In its new Water Blueprint, launched last month, Diageo has sought to create a water strategy for the whole company, but a defining characteristic of that strategy is that it prioritises water-stressed areas. This is a crucial attribute for any water strategy to have as water is a local and regional resource. In contrast to carbon emissions, global figures on water usage and efficiency are of little significance. It is how companies respond to water risk in specific locales and regions which really matters.

The four core areas identified by Diageo in its new strategy underline the importance of taking account of regional variations in water availability and the particular challenges represented in developing countries. It is notable that Diageo CEO Ivan Menezes referred specifically to Diageo’s expanding footprint in emerging markets in his comments on the new strategy.

The programme aims to enhance the company’s water stewardship efforts in its sourcing of raw materials; within its own operations; within the communities in which it operates and through local and global advocacy for best practice in water stewardship at large. The general aims of reducing water use through a 50% improvement in water efficiency and to return 100% of waste water from its operations to the environment safely are not insignificant, but it is the specific aims related to water-stressed areas that are particularly notable.

Among other targets, Diageo has pledged to replenish water-stressed areas with the equivalent amount of water used in the final products produced in those areas, through projects such as reforestation, wetland recovery and improved farming techniques. The new strategy also reflects the importance of extending a responsible view of water back into the supply chain, where by far the largest proportion of any food or beverage product’s water footprint is to be found. As part of the Water Blueprint, Diageo will equip suppliers with tools to protect water resources in water stressed areas.

In addition, Diageo has said it will develop community projects through its existing Water of Life programme in water-stressed areas where it has production sites. It will also ensure appropriate access to safe water, sanitation and hygiene for all employees in the premises under its control.

Diageo’s new strategy was publicly endorsed by Barbara Frost, CEO of the water charity, WaterAid. Frost said WaterAid welcomes the Diageo Water Blueprint and would “encourage all businesses, governments and civil society to play their part in solving the water and sanitation crisis by making a solid commitment to managing water sources responsibly”.

Holding up Diageo as an example to others in this way reflects the important role the larger players have in leading the way on key sustainability issues. There may be those who bemoan the hegemonic way in which global giants like Diageo, Coca-Cola and PepsiCo bestride their sectors but, if they show the same assertiveness and resolve to lead from the front in sustainability, they can do much to deflect criticism and rebut the contention that there is something inherently unsustainable in the existence of multinational conglomerates.

Such sensitivities are arguably at their rawest when it comes to the relationship multinationals have with water security and the developing world, which makes programmes such as Diageo’s Water Blueprint all the more important.

The particular vigilance that water stewardship attracts from campaigners also ensures that companies risk enormous reputational damage if they fail to follow through on commitments. In all areas of sustainability, walking the walk, rather than just talking the talk, is vital and, given its crucial importance and capacity for attracting negative publicity, nowhere is this more true than in water stewardship.

Source: just-drinks

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