March 19, 2015
The popularity of sharing economy enterprises has exploded because they are delivering services in ways that work well for consumers, offering them convenience and competitive pricing.
Most of the public debate surrounding services like TaskRabbit, Uber or AirBnB has been about how governments should react to the arrival of these new ways of doing business and the questions they raise about fair competition, regulation and innovation.
But, what if governments were to take a bold step and borrow the best ideas from these new platforms to reconceptualize the delivery of public services? All governments struggling to meet growing demands with scarce resources should take note of how sharing economy services have enjoyed rapid consumer adoption with relatively little capital investment or staffing expenditures (Uber has fewer than 2,000 employees and a market valuation of $40B).
Some of the distinctive features of sharing economy companies — like using data to tailor services more effectively; maximizing the value of under-utilized assets; and transforming marketplaces by enabling peer-to-peer transactions at massive scale with low transaction costs — could be instructive for governments striving to deliver better public services.
1. Collecting and really using data. One of the most important things sharing economy firms do well is actively use data — whether to drive profits (e.g., surge-pricing for rides at certain times of day) or increase the quality of services (e.g., reputational ratings that provide real-time information on who’s a trustworthy peer). Some promising public sector initiatives (e.g., time-of-use energy pricing or predictive analysis to improve health inspections of restaurants) apply data-driven approaches, but many other programs and services lack sufficient information to assess their effectiveness. As they re-think core public services, all governments should be asking themselves: how can data be used to improve the delivery of this service?
2. Maximizing the value of assets. Many sharing economy enterprises are based on maximizing the value of assets that sometimes sit unused, whether it’s a car, an apartment or someone’s skills, and making them available to others. Do all municipalities need their own road-paving equipment? Can under-utilized schools be turned into community hubs that house multiple services? Technology now makes it much easier to implement these ideas by seamlessly linking available assets with potential users who need them, all in real-time with minimal effort.
More fundamentally, governments should think about their human capital assets and assess whether there are ways staff — for example policy experts or lawyers — can be shared to smooth out the inevitable fluctuations in workflow between different departments. One could imagine a government version of Taskrabbit that places specialists on short assignments, supporting the receiving ministry’s needs while building the organization’s collaborative capacity as well as the individual’s skills. Governments could also develop technology platforms to simplify bureaucrat-to-bureaucrat interactions for inter-ministerial projects and reduce the complexity of navigating organizations of thousands of people, many of whom would likely collaborate more effectively if they knew who to connect with about what information.
Many sharing economy enterprises are based on maximizing the value of assets that sometimes sit unused, whether it’s a car, an apartment or someone’s skills, and making them available to others.
3. More efficient marketplaces. By connecting large numbers of people who are interested in transacting services, and removing much of the friction of those transactions through technological innovation, sharing economy enterprises have successfully created very efficient marketplaces. Governments are in the business of regulating markets, and should harness technology to improve the functioning of those markets.
Some potentially fruitful areas for experimentation include settlement and employment services that connect skills-training agencies with newcomers and job-seekers, business support programs that provide information or funding and various social support services such as affordable housing. Technological solutions that remove layers of bureaucracy and process to more directly connect clients with services are underway in some jurisdictions, and platforms modeled on sharing enterprises could expedite that progress.
Procurement budgets could also be targeted more efficiently if suppliers and departmental purchasers had access to a more transparent, easy to navigate marketplace that reduced the reams of documentation required by both parties for relatively straightforward transactions.
These are just a few of the potential ways that governments can explore the use of technological applications to drive better service delivery, value-for-money and innovation. Governments should consider adopting some of the sharing economy’s key features as part of their own operating code.
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Mar 19, 2015