Hong Kong should do more to foster development of sharing economy

Panellists at the South China Morning Post’s ‘Redefining Hong Kong Debate Series’ say the city is losing out on the opportunities from cultivating a strong sharing economy

PUBLISHED : Wednesday, 09 May, 2018, 6:37am
UPDATED : Wednesday, 09 May, 2018, 6:32am

Hong Kong is falling behind other Asian cities in developing its sharing economy amid the government’s lack of meaningful dialogue with major companies in this sector and the inadequate support for local start-ups.

That was the view raised by panellists on Tuesday at the latest edition of the “Redefining Hong Kong Debate Series” organised by the South China Morning Post.

“Because of government regulations being very outdated and the government bureaus being a bit too conservative, they cannot make the changes that are necessary,” said Charles Mok, the legislative councillor representing the information technology functional constituency in Hong Kong.

His comments reflect the challenge faced by the Hong Kong government.

Loosely defined as the renting out of products and services instead of ownership, the sharing economy started out with the idea of renting out personal cars that sit idle in garages or homes that are empty during long holidays – think Uber Technologies and Airbnb – but has since evolved into businesses providing to consumers who are content to pay for what they use.

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The emergence of those large online platforms have helped spread the sharing economy’s growth around the world, but also raised questions as to how the Hong Kong government should­ balance rising demand for such technology-driven services and ensuring public safety.

In a recent survey commissioned by the Sharing Economy Alliance, which was established last year to promote the sector, about 70 per cent of respondents in Hong Kong said the government was too protective of vested interests when it came to developing the sharing economy.

Ride-hailing giant Uber, which had experienced a clampdown on its services in Hong Kong, said there was an absence of direct communications with the Hong Kong government.

“Quite honestly, I don't think that we’ve experienced a dialogue … and that's unfortunate,” said Ann Lavin, the senior director of Asia-Pacific public policy and government relations at Uber. “Being able to talk and understand each other's point of view, and working together benefits everyone.”

The panellists compared the city’s attitude towards the sharing economy to China, where a robust collaborative economy has benefited many innovative start-ups.

China’s sharing economy is minting multibillion-dollar tech unicorns

In China, one in two of the country’s technology unicorns – private companies valued at more than US$1 billion – are in the sharing industry, according to a report by the State Information Center. The biggest of these 31 sharing unicorns, Didi Chuxing, defeated Uber in the country’s ride-hailing market.

The registration for a new company on the mainland only takes a few days, while the whole process would take weeks in Hong Kong, according to Charlie Chen, the head of China consumer research at Credit Suisse.

“It's basically impossible for small companies to start and develop in Hong Kong, which is not friendly to small businesses,” Chen said. 

He said environmental awareness is part of the spirit of the sharing economy, which Hong Kong citizens are aware of.

Yet it is the mainland, where there was lower environmental awareness, that has pushed the development of technology that was clean and convenient to consumers like bike-sharing, he said.

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Airbnb, the San Francisco-based online marketplace for short-term lodgings, said a strong sharing economy in Hong Kong would benefit the city’s people. 

“The economic activity here every year is about HK$2.6 billion, and Airbnb only takes three per cent of that,” said Mike Orgill, the director of public policy for Asia-Pacific at Airbnb. He said the rest directly goes into Hong Kong people’s pockets.

In light of developments in mainland China, the administration of Hong Kong chief executive Carrie Lam Cheng Yuet-ngor has struck a more welcoming tone on sharing economy businesses.

In her policy address last October, Lam said her administration would remove red tape to “foster the development of a new economy” and ditch “outdated provisions that impede the development of innovation and technology”.

Despite current challenges, Mok, the legislative councillor, said the future of sharing economy in Hong Kong will be led by small business owners. “When you think about sharing, why are we always thinking about Airbnb or other big companies?” Mok said. “Your mother's cooking is actually perfect for sharing.” 

“When the [appropriate] regulation is ready, there will be a lot of opportunities for companies, entrepreneurs, home businesses and so on,” he said.