The Next Big Thing

‘Sharing economy’ apps like Uber, carpooling services best suited to emerging economies, German start-ups find

PUBLISHED : Monday, 24 August, 2015, 7:00am
UPDATED : Monday, 24 August, 2015, 7:00am

As China wrestles with the finer points of the “sharing” or peer-to-peer economy, exemplified by the bumpy regulatory ride now facing car-hailing apps like Uber, start-up founders and venture capitalists are busy exploring other markets with fewer hurdles. 

Hamburg, a transport hub city in Germany, appears to be welcoming both, although not with completely open arms.

Like a number of Chinese cities, as well as Germany’s own Berlin and Frankfurt, it has imposed bans on Uber-like services but still allows such apps to continue operating amid something of a legal gray area. 

The city is home to over 200 start-ups. Of these, carpooling service WunderCar, popular with commuters who want to share rides, has been downloaded 200,000 times since it was founded last year, the company said.

“After we tested our app in Hamburg for a few months, we decided to focus on emerging markets such as Turkey and Hungary,” said founder and CEO Gunnar Froh, adding that many of its 3,000 registered drivers are based in Turkey. 

He said Hamburg served as perfect launch pad for the app but that it seems to work better in emerging economies where public transit is less convenient, rates of car ownership lower, and related legislation looser.

The app can operate in the German city because it offers rides for free at the moment, with passengers only contributing a “donation” if they deem it worthy. Of this, the company takes a 20 per cent commission.

After a court in Hamburg found car-hailing apps illegal last summer, further resistance from local taxi drivers has prompted local authorities to “urge” start-ups like Wunderkind not to charge customers for their services, according to the start-up.

Car-hailing apps are facing a stronger backlash in China.

Uber has had its offices in two major Chinese cities – Sichuan’s Chengdu and Guangzhou –raided in May and a handful of drivers were arrested in Hong Kong last week for lacking the correct permits as authorities move to resolve this regulatory grey area.

Chinese market leader Didi Kuadi, which claims to service over 200 million Chinese in 300 cities, is also now banned in a number of wealthy cities like Chengdu. 

WunderCar said it may set a fixed price in the future, and that its goal is to offer commuters greater choice and convenience. This echoes similar sentiments expressed by Uber. 

Also in Hamburg, entrepreneur Philipp Gloeckler founded in 2012 to help people rent out small pieces of equipment – a microwave, bookshelf or surfboard, perhaps - to profit from the fledgling sharing economy. 

After attracting some initial funding, his app was removed from Apple’s app store in March due to a paucity of users, he said. 

“The ‘rental economy’ may work with business models such as Uber and Airbnb, but it may not work in other cases,” he said. He is now consulting on IT projects.

Sina Gritzuhn, the founder of networking platform Hamburg Startups, has attracted 350 members in two years. 

Gritzuhn said interest in local start-ups is growing and more venture capital is coming to the city, but that it struggles due to its competition with Berlin, which has a bigger and more established start-up scene.

“Hamburg start-ups need to look for sustainable funding to feed their adventurous ideas,” she said.