Recently, Gobee.Bike has become the centre of media attention. The company was widely touted as a part of “the sharing economy”. Gobee.bike parks their bicycles at public bicycle racks and allows users to unlock these bicycles by scanning a QR code on the bike, charging HK$5 per half an hour. Users can end their rental and leave the bicycle at the location they themselves desire. Regrettably, poor planning has led to a series of setbacks: users experienced unauthorized deduction of deposit from their credit cards, user information was unencrypted and was at risk of exposure, and a number of bicycles had their parts stolen, damaged, or even dumped into the riverbed. Even though most of these problems have been resolved, the turn of events has raised the curiosity of the press.

Gobee.Bike’s business model falls beyond the scope of the sharing economy. Alex Stephany, founder of JustPark, defined in his book, The Business of Sharing – Making it in the New Sharing Economy, (2015: 9-10, 20), “The sharing economy is the value in taking underutilized assets and making them accessible online to a community, leading to a reduced need for ownership of those assets.

Gobee.Bike does not provide its users with bikes that were originally idle; instead, the company completely owns the bikes. Considering the arguable novelty of its mode of operation, Gobee.Bike may be considered as smart bike rental at best. Unlike Uber, Uber’s car fleet comes from its users; the company is not the owner of the cars in service. By unleashing the value of underutilized capital (cars) and labour (drivers) that would have gone to waste, Uber is adding value to society through its sharing economy business model.

Car2Go and Turo are two car rental companies in North America that illustrate what constitutes as the sharing economy with their differences: Car2Go owns a massive fleet of Smart and Mercedes-Benz for their users to rent through their cellphone; its economic value is not derived from users sharing their own resources. Turo invites users to list their own cars for other users to rent by matching car owners and tenants as well as the insurance company that covers the rental period. Turo is enabling better use of cars that would have been sitting around most of the time. This makes Turo fall within the definition of sharing economy.

For a city as densely populated as Hong Kong, housing estate-based communal car rental could be a financially sustainable business. For example, Carshare in Hong Kong invites users to list their car on their website and application whilst providing various vehicles for their users to rent at a number of specific estates. From this we can see how communal and sharing models of business are not mutually exclusive; yet to slap the “sharing economy” label onto any business that involves any element of renting is misleading all too often.

A paradox appears when we look into the experience of sharing economy startups like Turo, Uber and AirBnB: There will always be users who take advantage of the convenience provided by sharing economy platforms, such as professional landlords who turn their property into illegal hotels and hostels, Turo users who buy cars to rent out, or Uber drivers who buy electric cars with resale value guarantee in order to make greater profit from Uber-driving. These actions stand contrary to the spirit of sharing economy, yet the startups have little incentive to restrain them as companies profit from commission regardless of the nature of each transaction.

Critics of Uber accuse the company of charging exorbitant commission, saying profit is too thin for full-time drivers to make a living after factoring in all the relevant costs. However, if we accept that the main purpose of a sharing economy is to utilize labour and capital that would have been idle, then Uber’s arguably exploitative financial incentives are justifiable. After all, the sharing economy is not about replacing old industries with smart technology, but enabling usage of manpower and capital through the smart use of technology.

The sharing economy’s main appeal is the utilization of idle capital, generating more value without consuming additional resources. Without a solid understanding of the purpose of the sharing economy, we can easily go astray when we draw up public policies for this latest economic trend. If the government wishes to reap the benefits of this new market without letting it run amok in defiance of existing regulations, perhaps it can draw up new policies to regulate the new market, such as setting maximum hours for Uber drivers or requiring AirBnB’s landlord to be with the tenant during the rental. That way a level playing field can be maintained for all stakeholders without hindering the great potential of the sharing economy.