Tuesday, July 18, 2017

The sharing economy doesn't always work

Sharing jobs, sharing rides, sharing feelings, sharing sex partners, sharing space... Everything's about sharing, nowadays. Sometimes it works, and sometimes it doesn't, as Chinese entrepreneur Zhao Shuping found out recently... the hard way!

The South China Morning Post reported recently that Mr Zhao's share-an-umbrella start-up, called... wait for it... Sharing E Umbrella, lost some 300,000 umbrellas (virtually its entire supply) within weeks of its April launch.

The way it was supposed to work was that when a deluge threatened, a pluviophobe would pay a small deposit (= $2.79) to unlock a code in the umbrella's handle. Patrons were expected to return the umbrellas when the clouds parted and the sun shone again. That's not how it turned out. Call it human nature, but most of the people who picked up umbrellas, errr, kept them.

Mr Zhao Shuping began Sharing E Umbrella after noticing the global success of bike-sharing programs. And since people always seem to be without an umbrella when a rainstorm strikes, he figured a similar model could work, so long as people put the umbrellas back once the weather cleared up. But, as the founder told the SCMP, "Umbrellas are different from bicycles. Bikes can be parked anywhere, but with an umbrella you need railings or a fence to hang it on."

So, Mr Zhao found himself the CEO of a $1.5-million charity that mostly handed out free umbrellas to people in need, who simply kept the umbrellas for themselves. Sharing E Umbrella has no way to track where each umbrella went.

Chinese companies have run into challenges with the sharing models before. In June, Wukong Bicycles, a bike-sharing scheme, was forced to close down because 90% of its bikes went missing. Like Sharing E Umbrella, the company had no way to track the bikes' location. "The startup is closed now," said Wukong's founder, Lei Houyi. "I'll think of it as a charity project."

Unlike Mr Lei, Mr Zhao isn't about to give up. He plans to release an additional 30 million umbrellas by the end of the year. And he's working on figuring out a way to add a GPS into the umbrella rental process so he locate his umbrellas... come rain or shine.

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