The sharing economy is booming, people are finding solutions to problems and use technology to assist in organizing the tasks. The Swedish bank Nordea predicts more market shares for this part of the economy, which they think will lead to solutions for users of app-based assistance in the form of better insurances specific to the internet sharing economy. It is looking like a bright future for both entrepreneurs and consumers! What is the largest obstacle for growth in this sector? Stiff, old Swedish state regulations.
Some of these regulations reared their ugly head recently when the popular Swedish application Tiptapp was banned in Stockholm. Users of the app could gather all the garbage they had at home (but couldn’t remove themselves) and post an ad with a reward for picking it up for any takers. The app acted as a middle-man for garbage collection and delivery – Something only the state is allowed to do or delegate out, through their litter monopoly.
There is a select amount of companies in each commune that have the Governmental blessing and approval to handle transportation of trash, making it illegal for anyone else to do it – For whatever reason or any size.
When Johan Norberg did some research on the state-approved entrepreneur’s prices for picking up a single bag of waste it was the perfect illustration on why monopoly is fundamentally bad economics: The price was in the range of $440-$680 compared to the around $20 via TipApp. Private parties through the app were of course more flexible on the pickup time as you can directly negotiate with someone for it, but with the larger companies, you had to fit their schedule resulting in up to a work weeks worth of time before they come to pick it up.
Awaiting the final verdict from the courts and a possible appeal process, the people behind TipTapp are hopeful they will win – But isn’t letting this little bump in the road stop them, they have already expanded the project to London. The city of Stockholm seems to understand that the application has merit though and want to build a similar application themselves.
A very wrong way to go, in my opinion. Stockholm doesn’t need to reinvent something that already exists for taxpayer money when there is an existing program already working! If the city council could focus on changing the regulations in place, no extra costs would come out of it. I don’t trust the state to do anything competent with IT projects after so many have failed. One of the brightest examples to give is the $11 million homepage that Public Employment Services tried to build that resulted in nothing but the need to reboot the project. I would trust the people behind TipTapp over those guys every day of the week.
While sharing-economy industry leaders like Uber and Airbnb have their own unique struggles with the Swedish government regulations, let’s hope that sanity prevails and we can see the new tech in full bloom for more freedom.
Want to become a supporter of Utopium? Consider donating a small sum through Ko-Fi! ❤