The opportunity of an inclusive sharing economy in MENA

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It’s 9am. A commuter leaves home heading for her office in the local tech business hub. After 30 seconds a car has arrived to take her - perhaps with other passengers, perhaps not - to her destination. The fare is five times less than that of a taxi.

This is not Silicon Valley, it’s Beirut. And it’s not an AI-powered version of Uber, it’s a ‘service’ cab, a common shared taxi that has existed in Beirut for decades.

The sharing economy has long existed in different forms throughout MENA and today its tech-enabled cousin is taking off. But the approach adopted by first mover companies such as Careem still doesn’t fully take advantage of MENA potential.

Beep beep, toot toot. Services in Lebanon's Tripoli. (Image via Wikimedia Commons)

Models of sharing economy

‘Sharing economy’ is a loose term identifying a set of organizational models involving the act of sharing.

“It is not good or bad in itself, it depends on the purposes and on the model adopted,” explains Ehab Elia, developer and Cairo Ouishare coordinator.

Sharing services can be peer-to-peer (P2P), such as Yallaread in Tunisia, or a simple shared public resource such as Bike4all in Lebanon; they can be for-profit such as Uber or not-for-profit such as the traditional Ramadan free Iftar tables; there are cooperatives such as Stocky in Canada, or companies such as Deliveroo in the UK.

Whatever the model chosen, it should aim to include everyone because the value of the sharing economy is based on the network effect, or the number of people using it.

An ‘exclusive’ sharing economy

Some of the recent sharing initiatives in MENA have been successful, such as Avito in Morocco, but most of them are generally copycats of services from the US or Europe.

As a consequence the kind of services provided serves a limited section of the population which is mostly well-educated, wealthy, well-travelled, and it is ready to share with people from the same elite. The elitist element of sharing economy already present in the West, pointed out by a Pew research, is even more remarkable in MENA.

Many sharing economy industries in MENA limit their services to an elite niche, such as The Luxury Closet  in the UAE or Uber.

It is an inclusive sharing economy that will be the real game-changer.

An inclusive sharing economy for MENA

MENA may need a different model of sharing economics that responds to its own social and economic needs. An inclusive sharing economy could be the right one.

An inclusive sharing economy focuses on widely felt needs and provides widely accessible services, so that everyone has the incentive and the possibility of taking part in it.

Whatever model you choose you should aim to include everyone. (Image via Stockvault)

An example of inclusivity, even if it is not sharing economy, is Democrance, a fintech startup aimed at making insurance accessible to everyone in MENA.

“The sharing economy in general or P2P economy in particular initiatives are not new to the Arab World. Throughout history, people practiced sharing and collaboration in their day-to-day lifestyle as part of the culture and religious beliefs,” said Techstars regional manager Ahmad Sufian Bayram.

“Some traditional collaborative and sharing initiatives are still being adopted today such as Jamee’h, an old model of a non-interest crowd-lending, and free Iftar tables in Ramadan,” he added.

For example Nelly Baz, consultant and head of programs committee at the Internet Society - Lebanon, highlights the case of Lebanon where ”somehow people and communities managed to have generator sharing in different neighbourhood throughout the country”

The emergence of sharing economies

The Collaborative Economy from Altimeter identifies three drivers that lead to the sharing economy: social relations, economic conditions and technological tools.

They said that in the West, sharing economies emerged in societies that had become progressively more individualistic, and that a desire had grown for greater social ties and a sense of community. Moreover it emerged during an economic crisis which imposed economic efficiency, boosted by the availability of new technologies and services such as social networks, smartphones and secure online payments.

This is not the case in the Arab world; social ties are still very strong, economic struggles existed before the 2007 financial crisis and some technologies are not yet widely spread.

Going forward

Any sharing economy is based on networks of people. In order to make these networks wide and efficient two things are needed: technologies and trust.

Technological improvements would be things like higher smartphone penetration, fintech and blockchain enhancing connections between individuals. The trust then enables cooperation.

Confirmed by a Harvard research paper, in MENA there is a lack of trust between communities, which can be based on either geography or religion. This condition prevents individual initiatives from becoming organized which in turn can impede the sharing of experiences and knowledge, slowing the growth process.

Increased trust and new technologies will boost those inclusive sharing ideas emerging where we expect them the least, namely refugee camps and conflict areas.

“In conflict areas in the Arab World, people tend to share more resources as collaboration and sharing are not options; it's a fundamental thing for the people there to maximize the resources and creating greater opportunities,” said Bayram.

Feature image via Stockvault.

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