The Sharing Economy In Madrid

Winter Hill Advisers
Winter Hill Advisers

The “sharing economy” is alive and well in Madrid, although not everyone thinks it’s a good thing.

In his recent book “What’s Yours is Mine”, American writer Tom Slee argues that the most well-known examples of the so-called sharing economy are really just big multinational corporations pursuing monopoly power.   They’ve certainly been disruptive, and raised complex questions about competition, regulation and workers’ rights.  But we use them because they make our lives easier in some way; and most of the companies involved, far from being monopolies, are just gnawing at the edges of their markets.
That’s not the case for holiday rental platforms like Airbnb and Homeaway, which have made a big splash.   Residents and politicians blame them for a housing shortage and a sharp hike in rents, as they flood the city centres with partying tourists.  Hotels in Spain complain of being at a disadvantage.   In Barcelona both websites have been fined €600,000 for renting out “illegal” properties. The Madrid Town Hall is threatening to limit the number of days the properties can be let.
Uber hasn’t had an easy landing in Spain; taxi drivers grumble about an unlevel playing field and in December 2014 a Madrid court banned it from operating.   In March 2016 the company was back, this time using only drivers with a professional licence.  These permits are scarce – buying one on the secondary market can set you back €40,000 – so there’s a finite pool of potential Uber drivers (which may explain why I can’t get an airport trip for below the price of an official taxi).  The company seems keen on Madrid and has since launched Uber Eats, competing with Deliveroo and Just Eat to deliver restaurant food into our homes.  It also chose the city for the world launch of Uber One, an up-market (and ecological) taxi service using only Teslas.  Presumably at €80,000 each, Uber won’t expect its drivers to buy their own.

For longer trips, Madrilenians turn to French start-up BlaBlaCar, which matches travellers and drivers going in the same direction so they can split petrol and toll costs.   BlaBlaCar looks like a genuine ‘sharing’ business, and students love it, but that hasn’t stopped the Madrid Regional Government, applauded by the big intercity bus companies, from fining two drivers for ‘profiteering’, allegedly charging passengers more than their share of the costs.
Less controversial has been the short-term hire of electric cars – Car2Go, with 500 Smarts has now been joined by Emov’s 500 Citroens.  Customers locate available cars on an app and pay 19 cents a minute, working out cheaper than a taxi.  Madrid start-up Amovens allows you to hire someone else’s private car, or if you’re feeling brave, to rent yours to a complete stranger.
Away from cars and beds, Madrid’s own start-ups have a lot else to offer.  Clintu can find you someone to clean or iron by the hour, while Etece hooks you up with odd-jobbers.   Koiki will receive your online purchases and walk them round when you’re in, cutting down pollution from delivery vans.  Chefly will let you taste real home-made cooking (or sell your own apple crumble).   You can crowdfund your personal projects with einicia, and find investors to lend money to your business on peer-to-peer sites such as Comunitae or MytripleA.   Who knows, with their help you might just turn that sharing economy idea of yours into one of those monopoly-seeking multinationals which keep Tom Slee awake at night.


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By Roger Pike
WH Advisers – Helping International businesses understand Spain

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