The rise of the

sharing economy
The Indian landscape
October 2015
Foreword
The sharing economy has been on an exponential growth curve over the last couple of years and has
been the subject of considerable interest to the stakeholders and policy-makers across the globe.
Technology is pivotal to the growing concept of sharing economy, to enable scale and enhance
economic impact. A number of sharing platforms have emerged which enable individuals to share
goods and services like cars, houses, household products and services. The proliferation of mobile
devices has heralded a digital revolution to serve as a catalyst of growth.
The appeal of the sharing economy lies in the fact that the sharing platforms create a win-win
situation for all the stakeholders. The benefits of the sharing economy are manifold - including
on-demand access to goods and services, efficient utilization of unused inventory of assets across
industries, leading to a multiplier effect such as increased employment, consumerism, digital literacy
and the rise of micro-entrepreneurship.
The concept of the sharing economy is still at a nascent stage in India. While sharing personal
products (such as ones own home or car) which the owner is using currently is still negligible when
compared to the West, the adoption of sharing platforms has been encouraging. This has been driven
by the emergence of aggregators in industries like personal transportation and hotel room bookings.
For the sharing economy to make further in-roads in India, the sharing platforms will have to address
a few key imperatives. This includes fostering trust between the individuals involved in a transaction.
A technology platform that provides a transparent pricing, verified listings and background checks,
and assured delivery of services will reinforce consumer faith in these platforms.
We believe that the sharing economy will open up a number of interesting possibilities across
different economic activities and change the future of work, production, and collaboration. The
sharing economy also represents a paradigm shift in the employment market and enables many
individuals to attain gainful employment through the rise of micro-entrepreneurship.
This report aims to understand the landscape of the sharing economy in India, the associated
benefits and challenges. This report also covers various stakeholders perspectives on the drivers and
challenges in adopting the concept. We hope you find this report useful.

Ravi Gururaj
Chairman, Nasscom
Product Council
Foreword
The concept of sharing is not entirely new as some of the earliest forms of human transactions
involved bartering of goods and services without any monetary exchange. The digital evolution
brought about by technology has taken this concept forward and created opportunities where
individuals can monetize their skills and suitably use underutilised resources.
The emergence of sharing platforms is changing the way traditional industries such as travel and
transportation, food & beverages, accommodation and services conduct business, and is forcing the
relevant stakeholders to re-evaluate their business models. The sharing economy has far reaching
implications; some prominent positive ones including increased convenience, improved resource
utilization, job creation, improved digital awareness and environmental benefits. The growth of the
sector is evident from the fact the global sharing economy is forecasted to grow at a CAGR of 139.4%
to reach US$115 billion by 2016 from US$3.5 billion in 2012.
In many countries, it is observed that shareable goods (such as vehicles, drills, lawn-movers)
account for 20-30% of household expenditure. If the sharing economy platforms are effectively used,
they would help improve the utilization of these underutilised shareable goods, thereby reducing the
overall spends.
In the Indian context, the appeal of the sharing economy as a concept lies in the fact that personal
asset ownership (such as cars) is comparatively lower. The sharing economy, by its very nature
emphasizes on the re-use of assets rather than absolute ownership, which helps individuals to
experience the benefits of these assets without really owning them. On the supply side, the sharing
economy is transforming the work force and is making the road to entrepreneurship more accessible
for many people.
In India, the biggest impact of the sharing economy has been felt in the personal transportation
space, where the emergence of these platforms has made it convenient for any individual to
commute from one point to another. The concept has also become very relevant to industries like
accommodation, food and grocery, household goods and healthcare. It is also likely to emerge as
a growth driver for other specialised and niche services like hyper local, medical appointments and
supplies, unorganised service sector expansion among others.
We believe this sector is poised to grow and the entire stakeholder community within the sharing
economy ecosystem including the society, government and regulators will witness the underlying
benefits this offers. The extent of success of the concept will also depend on how proactively the
requirements of the sharing economy are addressed from a regulatory and policy perspective.
The insights in this report are based on detailed and comprehensive interactions with various
stakeholders including sharing economy companies, consumers, suppliers, investors and lawyers
among others and we would like to thank each one for the time taken to share their perspective with
us that has made the analysis more meaningful.

Ranjan Biswas, Ankur Pahwa,

Partner and National Director, Partner,
Technology, Media, Telecom Technology, Media, Telecom
Ernst & Young LLP Ernst & Young LLP
Contents 01 The sharing economy
view from the top 05

02 Impact and benefits of the

sharing economy 12

03 Challenges and regulatory hurdles

for the sharing economy 23

04 Sharing economy and its role in key

initiatives of the Government of India 29

05 The opportunity ahead for

the sharing economy in India 31
The sharing economy
view from the top
T he shar ing eco no m y is a so cio - eco no m
ar o u nd t he shar ing o f hu m an and phy
inclu des t he shar ed cr eat io n, pr o du ct io n,
and co nsu m pt io n o f g o o ds and ser v ices b
organizations.
ic eco sy st em b u ilt
sical r eso u r ces. It
dist r ib u t io n, t r ade
to hospitality platforms such as Stayzilla, Stayology and OYO
R o o m s ( ho spit alit y ) . The u nit ing f act o r f o r t hese co m panies
and init iat iv es is t heir ab ilit y t o b r ing peo ple t o g et her , o f t en
y dif f er ent peo ple and through an online platform, to share or exchange underutilized
asset s w it ho u t lar g e t r ansact io n co st s.

S har ing eco no m y act iv it ies f all int o f o u r b r o ad cat eg o r ies: The shar ing eco no m y has spu r r ed m icr o - ent r epr eneu r s and
R ecir cu lat io n o f g o o ds f acilit at ed t he cr eat io n o f new m ar k et s and eco no m ic act iv it y
where none previously existed. Enterprising citizens can now
Increased utilization of durable assets g ener at e inco m e b y r ent ing asset s as v ar ied as f u r nit u r e,
E x chang e o f ser v ices cam ping eq u ipm ent and par k ing spo t s.

S har ing o f pr o du ct iv e asset s
S har ing b u sinesses eit her :
1 . O w n g o o ds o r pr o v ide ser v ices t hat t hey r ent t o
cu st o m er s, o f t en o n a sho r t - t er m b asis, o r
2 . C r eat e peer - t o - peer plat f o r m s co nnect ing pr o v ider s and
u ser s f o r t he ex chang e, pu r chase, o r r ent ing o f g o o ds and
ser v ices. 1
This can enco m pass ev er y t hing f r o m cr o w d- f u nding sit es t o o n-
dem and t echno lo g ies, su ch as U b er and O la ( t r anspo r t at io n) ,
The pr o lif er at io n o f dig it al plat f o r m s and m o b ile applicat io ns
in r ecent y ear s has b een t he pr im ar y dr iv er f o r t he m o m ent u m
in co llab o r at iv e co nsu m pt io n in r ecent y ear s. A lt ho u g h it is
a r elat iv ely new co ncept in India, it is pr ev alent acr o ss t he
g lo b e in t he f o r m o f peer - t o - peer r ide- shar ing ( B laB laC ar ) ,
acco m m o dat io n- shar ing and r ent ing ho u seho ld it em s. G lo b ally ,
t he shar ing eco no m y is est im at ed t o g r o w at a C A G R o f
1 3 9 . 4 % t o r each U S $ 1 1 5 b illio n b y 2 0 1 6 f r o m U S $ 3 . 5 b illio n
in 2 0 1 2 . 2

D iagram 1 : S egments of the sharing economy

P eo ple/ S k ills H ealt h L o g ist ics F inancial ser v ices

H o u seho ld g o o ds E du cat io n Tr anspo r t at io n A cco m o dat io n

1 R au ch. D aniel E . and D av id S chleicher . L ik e U b er , B u t f o r L o cal G o v er nm ent al P o licy : The F u t u r e o f L o cal R eg u lat io n o f t he S har ing E co no m y . G eo r g e M aso n L aw &
E co no m ics R esear ch P aper , N o . 1 5 - 0 1
2 S har e. D o n t O w n: The S har ing eco no m y t ak es o f f , F o r b es India w eb sit e, w w w . f o r b esindia. co m / ar t icle/ chg sb / shar e. - do n t - o w n- t he- shar ing - eco no m y - t ak es-
o f f / 3 9 2 4 1 / 0 , accessed 3 0 S ept em b er 2 0 1 5 ;

6 The r ise o f t he shar ing eco no m y

This shar ing eco no m y co u pled w it h new t echno lo g ies dr iv es
substantial economic, social and environmental benefits
b y cu t t ing do w n co st s, co nser v ing r eso u r ces and r edu cing
env ir o nm ent al im pact .
The shar ing eco no m y ser v ices in m o st sect o r s in India ar e in it s
init ial st ag es. N o net heless, t he ado pt io n o f plat f o r m s has b een
enco u r ag ing , led b y t he w illing ness o f co nsu m er s t o t r y new
t hing s and t he ease o f g o ing cashless t hr o u g h sm ar t pho nes.
The sharing economy as a concept first became popular in
India w it h o n- dem and t r anspo r t at io n plat f o r m s. The t r end is
no w b eing f o llo w ed b y o t her sect o r s inclu ding ho spit alit y and
f o o d & b ev er ag e.

D iagram 2 : S haring economy ecosystem

D emand sid e S u ppl y sid e

S har ing eco no m y pr o v ider s

( ag g r eg at o r s, m ar k et places,
t echno lo g y pr o v ider s)

C onsu mers A ggregators/ mark etpl aces S u ppl iers

Q u ick m ar k et penet r at io n and
R ising m o b ile ado pt io n Better resource utilization
hig her r ev enu es
D riv ers H ig h int er net penet r at io n
H ig h speed int er net av ailab ilit y E x panded co nsu m er r each
G r o w t h in dig it al plat f o r m s and f ast er g o - t o - m ar k et
Current inefficiencies in services
O n- dem and ser v ices
Incr eased b u siness du e t o
C o nv enience w ider m ar k et r each
Increased efficiencies
L o w er pr ices D ig it al lit er acy
B r and cr eat io n
Benefits S har ed ex per iences S o cial m o b ilit y
B et t er su pplier pr ices
Personalized/customized S k ill dev elo pm ent
L o w er capit al int ensit y
pr o du ct / ser v ice
B r and cr eat io n
C ho ice o f m u lt iple o pt io ns
S t r eam lining o per at io ns
Insu r ance and secu r it y o f
R eg u lat o r y co nsider at io ns asset s
Tr u st and saf et y st andar ds
C hal l enges M anag em ent o f u nco nv ent io nal Inf r ast r u ct u r al challeng es
C o nsist ent ser v ice
w o r k f o r ce
ex per ience C o nsist ent and q u alit y
D eliv er ing co nsist ent ser v ice ser v ice ex per ience
q u alit y

The Indian landscape 7

 H av ing a g o o d spr ead o f su pply r eady , ensu r ing ser v ice r eliab ilit y , b u ilding t ech
plat f o r m s/ pr o cesses t hat enhance t r u st w it h t he st ak eho lder s ar e so m e o f t he cr it ical
capab ilit ies t hat o n- dem and ser v ice ag g r eg at o r s sho u ld po ssess t o su cceed in t he
m ar k et .

Nandan Reddy,
Co-founder, Swiggy

C o nsu m er s, o n- dem and t echno lo g y plat f o r m s and su pplier s
ar e cr it ical elem ent s o f t he shar ing eco no m y eco sy st em ,
and their effective interaction leads to increased efficiency
aimed at achieving better utilization of resources for all the
co ncer ned st ak eho lder s as illu st r at ed b elo w .
Consumers: F r o m t he dem and side, co nsu m er s see
numerous benefits such as on-demand services at lower
pr ices, co nv inience and v ar iet y o f o pt io ns.
Incr eased dem and f o r g o o ds and ser v ices enab le su pplier s
su ch as ho t els and r est au r ant s t o t ap new cu st o m er g r o u ps
w ho can access t heir plat f o r m s v ia t he int er net t hat w er e
o t her w ise inaccessib le.
In o r der t o cr eat e t r u st am o ng co nsu m er s, plat f o r m s m u st
ensu r e t heir sy st em s allo w f o r co nsist ent ex per ience t o
co nsu m er s and su pplier s t o g r o w t heir b u sinesses.

On-demand technology providers and suppliers: Ther e

are increased benifits such as better utilization of
inf r ast r u ct u r e, easier access t o w ider cu st o m er b ase and
incr eased b u siness o ppo r t u nit ies f o r m icr o - ent r epr eneu r s.

D em o g r aphics and sm ar t pho ne penet r at io n ar e k ey dr iv er s t hat ar e acceler at ing t he

ado pt io n and u sag e o f t he shar ing eco no m y at t his po int . India, in t he co m ing y ear
w ill b e t he w o r ld s seco nd lar g est sm ar t pho ne and m o b ile int er net m ar k et pu shing t he
U S t o t he t hir d place. In t er m s o f dem o g r aphics, o v er 5 0 % o f t he po pu lat io n is u nder
t he ag e o f 2 5 and o v er 6 5 % u nder t he ag e o f 3 0 . B o t h t hese dr iv er s, in co nj u nct io n,
w o u ld m ean m o r e and m o r e Indians w o u ld cho o se no t t o b u y a car and inst ead lo o k at
t r anspo r t at io n as a ser v ice at t he t ap o f a b u t t o n r at her t han a pr o du ct sit t ing in t heir
g ar ag e.

Arvind Singhatiya,
Vice-President, Corporate affairs, Ola Cabs

8 The r ise o f t he shar ing eco no m y

1.1 Landscape of the
sharing economy
W hile new sect o r s lik e healt h car e, g r o cer ies, handy m an
ser v ices, co m m er cial t r u ck s ag g r eg at io n et c hav e m em b er s
j o ining t he shar ing eco no m y , t he hig hest ado pt io n r at es ar e
seen in t hese t hr ee indu st r ies: t r anspo r t at io n, ho spit alit y and
f o o d & b ev er ag es
Transportation
The m o st pr o m inent ex am ples in t he t r anspo r t at io n sect o r
ar e o n- dem and t echno lo g y ag g r eg at o r s su ch as U b er and O la.
These services allow consumers to connect with a verified
near b y dr iv er u ser s w illing t o dr iv e t hem t o t heir dest inat io n
f o r r at es set b y t he ser v ice.
The shar ing eco no m y m ay also chang e o t her aspect s o f t he
t r anspo r t at io n m ar k et . E m er g ing car - po o ling plat f o r m s hav e
em er g ed as an alt er nat e t o b o t h car o w ner ship and car r ent als,
by offering convenience and flexibility.
S im ilar ly t his co ncept is b eing applied t o int er / int r a- cit y
logistics and movement of goods, thereby, organizing a highly
f r ag m ent ed t r anspo r t at io n sect o r and ensu r ing cu st o m er s
enj o y a sw if t , sim ple and sm ar t er o n- dem and ser v ice. O w ner s/
dr iv er s o f t r adit io nal asset s su ch as t r u ck s and t em po s dr iv er s
no w enj o y incr eased, m o r e pr edict ab le and su st ainab le
ear ning s.
Hospitality (peer to peer
accommodation)
N ew b u siness m o dels ar e allo w ing t r av eller s t o f o r g o
t r adit io nal ho t els in f av o u r o f r ent ing new o pt io ns lik e spar e
rooms and homes. Airbnb, Stayzilla and OYO rooms are among
so m e o f t he plat f o r m s f o r acco m m o dat io n cu r r ent ly pr esent in
India.
Food and beverage (F&B)
The F & B b u siness is t ak ing adv ant ag e o f o n- dem and
t echno lo g y plat f o r m s b y cem ent ing t he g ap b et w een
r est au r ant - g o er s and f acilit at ing acceler at ed deliv er y .
These b u sinesses ar e m ak ing f o o d deliv er y and pay m ent m o r e
efficient. Success in these models is anchored on its user-
friendly interface, comprehensive and verified listings, updated
inf o r m at io n and analy t ics t o m o r e ef f ect iv ely m at ch su pply
w it h dem and. C o m panies act iv e in t his sect o r inclu de S w ig g y ,
F o o d P anda, Tiny O w l and Z o m at o .
C o m par ed t o t r adit io nal m ar k et s , t he o n- dem and shar ing
eco no m y , f acilit at ed b y t echno lo g y plat f o r m s, o f f er s t he
f o llo w ing u niq u e at t r ib u t es:
M ore su stainab l e u se of id l e and u nd er- u til iz ed
resou rces
D e- central iz ed ex change, l ead ing to cost red u ctions
A l ternativ e pricing mod el s su ch as d ynamic pricing
A s m o r e Indians b eg in t o em b r ace
ser v ices o f f er ed b y t he shar ing
eco no m y , w e see t he sect o r g r o w ing
b y leaps and b o u nds in t he nex t f ew
years. Trust must be achieved as a first
st ep b u t m o r e and m o r e Indians ar e
em b r acing ser v ices su ch as r ide- shar ing
b ecau se t he t echno lo g y has m ade it
m o r e r eliab le, af f o r dab le and saf e. W e
w ill see m o r e play er s ent er t he Indian
market just by virtue of its sheer size
and po t ent ial.
Bhavik Rathod,
General Manager Bangalore, Uber India
The Indian landscape 9
1.2 Economics of the A s eco no m ies g r o w , so do t he nu m b er o f po t ent ially , m u t u ally
beneficial trades. The problem is that we cannot access all

sharing economy
o f t hem . W hen t r ansact io n co st s ar e t o o hig h, m any o f t hese
exchanges are rendered unprofitable and will not take place.

R ecent ly , inno v at iv e o n- dem and t echno lo g ies hav e

significantly reduced transaction costs of exchange of goods
1.2.2 Dynamic pricing
and ser v ices. They hav e do ne t his b y m ak ing k no w ledg e
inex pensiv e and u b iq u it o u s. C o m b ining t his w it h inno v at iv e
software platforms, it has significantly extended the ability to W it h less co st ly and ex panded inf o r m at io n,
co o r dinat e eco no m ic ex chang es. w e can lev er ag e m ar k et m echanism s and
m at ch dy nam ic su pply and dem and m o r e
1.2.1 Transaction costs accu r at ely .
The r edu cing t r ansact io n co st s ar ising f r o m new t echno lo g ies
hav e had a deep im pact o n t he w ay indiv idu als u nder t ak e
eco no m ic ex chang e. M ar k et s co o r dinat e k no w ledg e t o m at ch su pply and dem and.
The shar ing eco no m y is ab le t o im plem ent sev er al no v el
Tr ansact io n co st eco no m ics f o cu s o n m ak ing t he t r ansact io n m o dels f o r t his pu r po se. This sect io n t o u ches o n a pr o m inent
r at her t han co m m o dit ies, w hich ar e t he b asic u nit o f analy sis ex am ple leading t r anspo r t ag g r eg at o r s dy nam ic o r su r g e
and by assessing governance structures, of which firms and pr icing m o del. This is o nly o ne o f t he m any ex am ples em er g ing
m ar k et s ar e t he leading alt er nat iv e, in t er m s o f t heir capacit ies in shar ing eco no m y plat f o r m s.
to economize on transaction costs. A workable concept of
t r ansact io n co st s can b e split int o t hr ee m ain par t s: O n- dem and t echno lo g y t r anspo r t at io n pr o v ider s m ay char g e
peak - t im e v ar iab le f ar es in o r der t o ensu r e t hat peo ple g et
S ear ch and inf o r m at io n co st s
ar o u nd r eliab ly . P r ice v ar iat io ns u nder t he dy nam ic pr icing
B ar g aining and decisio n co st s model are determined by an algorithm, which analyzes multiple
G o v er nance and enf o r cem ent co st s factors to equalize demand and supply to arrive at a rate that
incentivizes driver users to provide services at a time where no
o t her ser v ice pr o v ider is w illing t o do so .
The im po r t ance o f t r ansact io n co st s is b est D y nam ic pr icing is no t dependent o n t he t im e o f t he day , b u t
illu st r at ed t hr o u g h an ex am ple. Y o u m ay b e r at her o n t he co ndit io ns at t he po int o f o r ig in. The o b j ect iv e
w illing t o pay so m eo ne IN R 1 0 0 t o w alk do w n of dynamic pricing is to maximize supply and ensure service
t he st r eet and pu r chase a co f f ee. Ther e pr o v ider s ar e av ailab le t o addr ess ser v ice r eq u est s and hence,
m ay also b e ano t her indiv idu al w ho is w illing
t o u nder t ak e t he t ask f o r IN R 5 0 . Ther e is
clearly potential for a mutually beneficial
t r ade her e. The r easo n w hy t his m ay no t
o ccu r is t r ansact io n co st s it is lik ely t o t ak e
t im e, and po t ent ially m o ney , t o disco v er
w ho t he o t her indiv idu al is, b ar g ain a pr ice
w it h t hem ( so m ew her e b et w een IN R 5 0 and
IN R 1 0 0 ) , and enf o r ce t he ag r eem ent . In
t his scenar io , t r ansact io n co st s eat u p
the profitability of exchange, preventing
mutually beneficial trade from taking place.

10 The r ise o f t he shar ing eco no m y

appr o pr iat ely m eet co nsu m er dem ands. D y nam ic pr icing is
applied on a location-specific basis depending on the supply-
dem and r at io at a par t icu lar po int in t im e. The m o m ent t hat The shar ing eco no m y has b r o u g ht
the supply and demand ratio equalizes and steadies, dynamic in efficiency and service quality that
pr icing ends and t he b ase m o del o f pr icing r esu m es. M o r e
co nsu m er s hav e no t b een ex per iencing
often than not, consumers are always notified of an increase
in pr ice and ar e f u lly inf o r m ed o f t he q u ant u m o f su ch dy nam ic
ear lier . B ef o r e t he em er g ence o f
chang e. ser v ice ag g r eg at o r s, cu st o m er s u sed
t o g et char g ed do u b le f o r a r ide. That
D y nam ic pr icing m o dels ar e no t lim it ed t o t he t y pe dev elo ped
b y t he t r anspo r t ag g r eg at o r s. Tr adit io nally , t he air line and
has no w chang ed t o pay ing as per
ho t el indu st r ies hav e u sed su pply and dem and m et r ics t o r aise utilization after the emergence of
and lo w er pr ices acco r ding ly . E v er r ecall pay ing hig her pr ices ag g r eg at o r s and t he t echno lo g y - b ased
o n ho liday w eek ends o r w hen space b eco m es lim it ed? plat f o r m s, w hich also enab le t he dr iv er
A no t her r ecent ex am ple is A ir b nb . E ar ly in t heir dev elo pm ent , u ser s t o g et t he nex t co nsu m er f r o m
o ne o f t he leading g lo b al acco m m o dat io n ag g r eg at o r s near the end point of the first ride.
disco v er ed t hat list ing a space w as a r elat iv ely easy pr o cess
until the potential hosts had to pick a price. It set out to fix this
pr o b lem t hr o u g h a ser ies o f alg o r it hm s. The co m pany no w
Aprameya RadhaKrishna,
pr o v ides pr ice r eco m m endat io ns t o ho st s o n a m o del b ased
Former co-founder, TaxiForSure
o n lo cat io n, lik eness and an idea t hat it descr ib e as r ecency .
These pr ice r eco m m endat io ns also inclu de t em per at u r e as a
pr o x y f o r seaso nal pat t er ns o f b o o k ing b ehav io r .

S o lu t io ns t o m ar k et - b ased issu es o f dy nam ic pr icing ar e

cu r r ent ly b eing t est ed in shar ing eco no m y plat f o r m s acr o ss
t he w o r ld. These m o dels ar e all po ssib le du e t o u b iq u it o u s and
necessar y k no w ledg e.

The Indian landscape 11

Impact and benefits of the
shar ing eco no m y

12 The r ise o f t he shar ing eco no m y

T he sharing economy provides several benefits across all the
eco sy st em st ak eho lder s, inclu ding t he co nsu m er , seller /
ent r epr eneu r and t he plat f o r m .
disruptive businesses. Better resource utilization, social
mobility through new jobs, flexibility to operate at ones
co nv enience and sk ill dev elo pm ent ar e so m e o f t he im po r t ant
benefits that come to the fore during discussions with
The shar ing eco no m y has b o o st ed t he ent r epr eneu r ial
st ak eho lder s in t he shar ing eco no m y .
spir it and t he plat f o r m s ar e co nv er t ing inno v at iv e ideas int o

J o b cr eat io n
S o cial m o b ilit y
R eso u r ce u t iliz at io n

Impact of the
sharing economy
on society S k ill dev elo pm ent

D ig it al lit er acy

E nv ir o nm ent and C o nv enience

inf r ast r u ct u r e

Tr anspar ency and

acco u nt ab ilit y

The Indian landscape 13

2.1 Resource utilization
Efficient utilization of resources may be attributed to a better
m at ching o f t he dem and/ su pply g ap in a par t icu lar seg m ent .
The co nsu m er is t he piv o t w hich t he shar ing eco no m y r ev o lv es
ar o u nd. W it h t he w o r ld b eco m ing m o r e m o b ile, t he co nsu m er
ex pect s all t he inf o r m at io n and ser v ices at t he t ap o f a b u t t o n.
O n- dem and inf o r m at io n and ser v ices m at ch t he client s needs
quickly, efficiently and conveniently through online platforms.
R ev enu e is lo st if capacit y is u nu sed in t he ser v ices sect o r .
O n- dem and t echno lo g y plat f o r m s help t o t r ansf o r m t he
w ay su pplier s r each po t ent ial cu st o m er s b y hav ing t heir
su pply accu r at ely m apped t o t he r ig ht dem and. This, in t u r n,
increases resource utilization and reduces the possibility of
u nso ld inv ent o r y . F o r inst ance, r ide- shar ing ser v ices enab le
better utilization of cars leading to reduced number of cars
on the road, and hotel rooms are better utilized leading to a
decr eased r eq u ir em ent f o r new co nst r u ct io n.

On-demand transportation platforms are connecting travellers to drivers in a more efficient manner
leading to better utilization of vehicles.

For instance, a leading on-demand transportation platform in India highlighted that drivers affiliated
t o it s net w o r k hav e r epo r t ed hig her nu m b er o f r ides per ho u r and r edu ced idle t im e b et w een t r ip.

H o t el- b o o k ing seg m ent is ano t her indu st r y w her e t he plat f o r m m o del has pick ed u p m o m ent u m
since 2 0 1 4 . The ho spit alit y plat f o r m s hav e cr eat ed a w in- w in pr o po sit io n as it allo w s t he sm aller
b u dg et ho t els t o incr ease t heir v isib ilit y and im pr o v e o ccu pancy lev els.

O n- dem and t echno lo g y plat f o r m s hav e helped t he r eal est at e indu st r y t o lo w er ho u sing inv ent o r ies
due to better utilization of under-construction and ready to move in homes in both the rental and
b u y er spaces.

O n- dem and t echno lo g y plat f o r m s hav e allo w ed t he r est au r ant indu st r y t o cem ent t he g ap
b et w een r est au r ant - g o er s and r est au r ant s b y f acilit at ing acceler at ed deliv er y . It s su ccess is
anchored on its user-friendly interface, comprehensive and verified listings, updated information
and analy t ics t o m o r e ef f ect iv ely m at ch su pply w it h dem and.

R est au r ant s also t ie u p m u lt iple lo g ist ics ser v ice plat f o r m s f o r t he last - m ile lo g ist ics ser v ices.
W it h t he incr easing nu m b er o f deliv er y o r der s f r o m ser v ice plat f o r m s, r est au r ant s ar e also
ex plo r ing o pt io ns t o r edu ce dine- in spaces as a m easu r e t o b r ing do w n t he o per at io nal co st s.

On-demand education technology platforms serve a not-for-profit objective by more efficiently

co nnect ing po t ent ial u ser s t o academ ic inst it u t es/ co m panies/ t eacher s t hat w ant t o shar e
inf o r m at io n and k no w ledg e. M assiv ely o pen o nline co u r ses ( M O O C s) b ecam e a new and po pu lar
co ncept and po t ent ially disr u pt iv e f o r ce in t he ar ea o f edu cat io n. S o o n af t er , v ar io u s w eb sit es
began offering content that utilized academic and informative resources more efficiently.

W it hin India, t his co ncept has seen a pu sh f r o m leading academ ic inst it u t io ns t hat ar e also w o r k ing
o n dev elo ping plat f o r m s cat er ing t o t he lar g er po pu lat io ns o f st u dent s.

14 The r ise o f t he shar ing eco no m y

 We feel the food order service aggregators bring four fold benefits. Due to the
inher ent nat u r e o f t heir m o del, t hey help in r eaching o u t t o co nsu m er s f ast er , i. e. g o -
t o - m ar k et is b et t er ; t hey help r edu ce capex r eq u ir em ent f o r ex pansio n- t hank s t o t heir
v ir t u al plat f o r m ; lesser hassles o f m anag ing deliv er y o per at io ns and r elat ed challeng es
and t heir t echno lo g y helps im pr o v e co nsu m er ex per ience and sat isf act io n lev els as
cu st o m er s g et m o r e v isib ilit y and co nt r o l o v er t heir o r der s.

Sumeet Yadav,
CEO, Nandos India

D iagram 3 : S napshot of a l ead ing gl ob al peer- to- peer accommod ation portal 3

> 1 ,5 0 0 ,0 0 0 > 4 0 ,0 0 0 ,0 0 0 > 5 0 0 ,0 0 0

W orl w id e l istings T otal gu ests S tays per night

> 2 0 ,0 0 0
> 7 0 %
$ $ A v erage annu al rent
O ccu pancy of rooms
earned b y a host

The sharing economys contribution to improved utilization o w ned car is per ceiv ed as a sy m b o l o f so cial st at u s. A s a r esu lt ,
b eco m es ev ident w hen o ne lo o k s at t he dat a o f o ne o f t he per so nal car o w ner ship is v er y lo w co m par ed t o t he o t her
w o r ld s leading peer - t o - peer acco m m o dat io n po r t al. W it hin a m aj o r co u nt r ies su ch as t he U S , t he U K and B R IC co u nt r ies.
sho r t span o f t im e, t he po r t al has g r o w n ex po nent ially and t he C ar o w ner ship is co ncent r at ed in m aj o r cit ies and is ex pensiv e
nu m b er o f list ing s o n t he po r t al has su r passed t hat o f so m e o f w hen o ne co nsider s f u el, m aint enance, t ax and par k ing
t he leading ho t el chains in t he w o r ld. ex penses.
The po r t al ser v es as a so u r ce o f addit io nal inco m e f o r ho st s
list ed o n it s plat f o r m . M o r e im po r t ant ly , t he o ccu pancy r at es
o f pr o per t ies list ed o n t he po r t al is m o r e t han 7 0 % , w hich is
hig her t han t hat o f leading g lo b al ho t el chains. The co m pany
has leveraged technology and prioritized search results for
ho st s t o help im pr o v e o ccu pancy lev els o f pr o per t ies list ed o n
it s po r t al. 4 In India, U b er is helping cr eat e
t ens o f t ho u sands o f new j o b s,
L ow personal asset ow nership d riv ing the sharing economy em po w er ing dr iv er s w it h hig her
The po pu lat io n and asset acq u isit io n pat t er ns in India ar e earnings potential and flexible work
v er y dif f er ent f r o m t hat in o t her co u nt r ies. The r easo ns f o r ho u r s, and pr o v iding m illio ns o f
asset acq u isit io n also v ar y in t he t w o eco no m ies. W hile car s co nsu m er s w it h a saf e, r eliab le and
ar e o w ned f o r m o r e u t ilit ar ian pu r po ses in t he U S , in India, an co nv enient m o de o f t r anspo r t .

Amit Jain,
3 W her e D o A ir b nb H o st s M ak e t he M o st M o ney ? , S m ar t asset w eb sit e, ht t ps: / /
President, Uber India
sm ar t asset . co m / m o r t g ag e/ w her e- do - air b nb - ho st s- m ak e- t he- m o st - m o ney ,
accessed 8 O ct o b er 2 0 1 5 ;
4 A ir b nb O ccu pancy R at es C at ching u p w it h H o t els, B ey o ndpr icing w eb sit e,
ht t ps: / / b lo g . b ey o ndpr icing . co m / sf - o ccu pancy - m at ches- ho t els, accessed 8
O ct o b er 2 0 1 5 ;

The Indian landscape 15

D iagram 4 : C ar ow nership in sel ect cou ntries5

000 inhabitants

2 0 1 0 8 0 7 5 1 1 2 1 6 1 2 6 4 4 1 2

2 0 1 5 9 3 0 6 0 2 3 8 8 2 2 1 1 8 7 7 2

S o u r ce: S k o lk o v o Inst it u t e o f E m er g ing M ar k et S t u dies

C o nsider ing lo w car o w ner ship r at es in India and t he f act t hat
em er g ing t r anspo r t at io n o n- dem and plat f o r m s in India o f f er
air co ndit io ned, hig h- q u alit y r ides f o r f ar es u nder IN R 1 5 /
km (US$0.23/km), utilizing the services of transportation
plat f o r m s t u r ns o u t t o b e m o r e eco no m ical. The shar ing
eco no m y enab les a b r o ad seg m ent o f t he po pu lat io n t o der iv e
benefits of travelling comfortably, without having to own cars.
Ther ef o r e, shar ing eco no m y , g iv es peo ple in India t he
opportunity to experience the benefits of these assets without
o w ning t hem , u pg r ading liv ing st andar ds b y u se o f shar ed
r eso u r ces and pr o v iding g o o ds and ser v ices t hat w o u ld b e
o t her w ise u naf f o r dab le.
A co m m o n m y t h asso ciat ed w it h t he shar ing eco no m y
w ill r eplace o w ner ship o f asset s. C o nsider ing t he lo w o
o f per so nal asset s in India, co nsu m er s w ill co nt inu e t o
new pr o du ct s. A s penet r at io n o f m o der n co nsu m er pr
incr eases w it h t he g r o w ing m iddle class, o w ner ship o f per so nal
asset s is also lik ely t o g r o w in India. H o w ev er , t he shar ing
economy will ensure improved utilization of those assets.
2.2 Job creation
The shar ing eco no m y has incr eased j o b o ppo r t u nit ies in India.
G iv en t he asset - lig ht nat u r e o f t he shar ing eco no m y , plat f o r m s
ar e ab le su pplier s t o t heir plat f o r m s m o r e q u ick ly t han
t r adit io nal indu st r ies. The em er g ence o f t he shar ing eco no m y
has m ade t he r o ad t o self - em plo y m ent easier and m o r e peo ple
ar e t u r ning ent r epr eneu r s. This t r anslat es t o incr eased inco m e
f o r st ak eho lder s in t he shar ing eco no m y .
is t hat it
w ner ship
b u y
o du ct s

D iagram 5 : J ob potential of the sharing economy6

1 ,5 0 0 1 mil l ion 5 0 ,0 0 0
N u m b er o f dr iv er s o n- J o b s t o b e g ener at ed b y t he N ew j o b s cr eat ed per m o nt h
b o ar ded daily b y an Indian g lo b al shar ing eco no m y b y b y a leading t ax i ag g r eg at o r
t ax i ag g r eg at o r 2 0 1 6 g lo b ally

5 India s passeng er v ehicle and t w o - w heeler m ar k et st eer t o w ar ds a do u b le dig it g r o w t h: R epo r t , The E co no m ic Tim es w eb sit e, w w w . eco no m ict im es. indiat im es.
com/articleshow/44989399.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, accessed 7 O ct o b er 2 0 1 5 ;
6 H o w S har ing E co no m y J o b s S t ack U p A g ainst Tr adit io nal O nes, Inc. w eb sit e, w w w . inc. co m / lau r a- m o nt ini/ inf o g r aphic/ t he- u nco llar ed- w o r k er - and- t he- f u t u r e- o f -
w o r k . ht m l, accessed 1 O ct o b er 2 0 1 5 ;

U b er Is Inv est ing $ 1 B To G r o w It s B u siness In India To 1 M R ides P er D ay , Techcr u nch w eb sit e, ht t p: / / t echcr u nch. co m / 2 0 1 5 / 0 7 / 3 1 / o ne- b illllllllllllio n/ # .
lf b v ps: m W y k , accessed 1 O ct o b er 2 0 1 5 ;

16 The r ise o f t he shar ing eco no m y

D iagram 6 : R ol e of sharing economy in promoting entrepreneu rship
7 ,5 0 0
shar ing plat f o r m s
g lo b ally
3 7 %
shar ing eco no m y
st ar t u ps ar e V C
f u nded
S o u r ce: C o m par e and shar e - 2 0 1 5 , C r o w d co m panies - 2 0 1 4
O n- dem and t echno lo g y plat f o r m s ar e cr eat ing a m assiv e
o ppo r t u nit y t o em plo y deliv er y asso ciat es, dat a co llect o r s and
sales ag ent s acr o ss dif f er ent g eo g r aphies w it hin India. These
r elat iv ely less- sk illed ar eas o f w o r k ar e cr eat ing em plo y m ent
o ppo r t u nit ies f o r m any Indians t o ear n t heir liv eliho o ds.
B y em po w er ing t he ho t el par t ner s
and enhancing t heir b u siness, w e hav e
cr eat ed j o b s indir ect ly . I b eliev e w e hav e
m ade a g r eat po sit iv e im pact w hich has
created employment in various fields
f r o m ho spit alit y t o ho t el m anag em ent .
Ritesh Agarwal,
Founder & CEO, OYO Rooms
$ 2 8 mil l ion
inv est ed in shar ing
eco no m y st ar t u ps daily
8 0 %
shar ing eco no m y
st ar t u ps see
cr o w df u nding as t he
b est w ay t o r aise
capit al
U b er in India has ent er ed int o a par t ner ship w it h
t he G o v er nm ent o f Telang ana w hich enab les j o b
cr eat io n.
The co m pany has also sig ned a m em o r andu m
o f u nder st anding ( M o U ) w it h t he G o v er nm ent
o f Tam il N adu w hich w ill lead t o t he cr eat io n o f
3 0 , 0 0 0 ent r epr eneu r ial o ppo r t u nit ies f o r dr iv er s,
inf r ast r u ct u r e dev elo pm ent and dev elo pm ent o f
pr o g r am s t o im pr o v e t echno lo g y .
A no t her Indian plat f o r m has sig ned a M o U w it h an
inv est ee co m pany o f N at io nal S k ill D ev elo pm ent
C o u ncil ( N S D C ) and A u t o m o t iv e S k ills D ev elo pm ent
C o u ncil f o r t r aining , sk ill dev elo pm ent and
em po w er m ent o f 5 0 , 0 0 0 w o m en dr iv er s o n it s
plat f o r m .
The co m pany has also ent er ed int o a par t ner ship
w it h The D ir ect o r at e G ener al R eset t lem ent
( D G R ) u nder t he M inist r y o f D ef ence t o ex t end
an o ppo r t u nit y f o r ex - ser v icem en t o t u r n
ent r epr eneu r s o n it s plat f o r m .
The Indian landscape 17
2.3 Social mobility
The shar ing eco no m y has t r ansf o r m ed t he em plo y m ent m ar k et
to the benefit of millions of workers. It is empowering a new
class of micro-entrepreneurs who are financially rewarded for
shar ing t heir ex per t ise, r eso u r ces and ser v ices. It has led t o a
hik e in inco m e lev els o f t he indiv idu als, especially t ho se in t he
lo w so cio - eco no m ic seg m ent .
O ne o f t he im po r t ant r easo ns t hat t hese plat f o r m s help in
cr eat ing j o b s is b y enco u r ag ing sect io ns o f t he po pu lat io n
w ho w o u ld o t her w ise no t hav e j o ined t he sect o r , t o b eco m e
a par t o f it . H o w ev er , no w w it h t hese plat f o r m s init iat ing
a par adig m shif t and o v er co m ing t he st r u ct u r al o b st acles
in t he indu st r y t hat pr ev ent ed o r pr eclu ded ent r y int o t he
sect o r , t he nu m b er o f peo ple o pt ing t o w o r k in t his sect o r has
incr eased dr ast ically . The pr ev alent w ag es in t his sect o r hav e
b een r epo r t ed t o b e co m par ab le t o t ho se paid t o w o r k ing in
pr o f essio nal indu st r ies in o t her sect o r s su ch as g o v er nm ent
em plo y ees and so f t w ar e pr o f essio nals.
In addit io n t o pr o v iding addit io nal inco m e t o peo ple, t he
sharing economy provides workers with more flexibility and
autonomy. Transportation platforms have offered flexibility to
dr iv er s t o o per at e acco r ding t o t heir o w n co nv enience. In t he
ho spit alit y seg m ent , shar ing net w o r k s hav e em er g ed, w hich
allo w peo ple t o r ent - o u t t heir ho u ses o r u nu sed r o o m s t o
g u est s and m ak e m o ney . F u r t her m o r e, t he shar ing eco no m y
provides individuals the flexibility to work with multiple
plat f o r m s and no t b e t ied t o o ne par t icu lar plat f o r m . This
o pens u p addit io nal o ppo r t u nit ies f o r t he par t icipant s in t he
shar ing eco no m y .
In India, o n- dem and t r anspo r t at io n plat f o r m s
ar e pr o v iding dr iv er s m o r e lu cr at iv e
alt er nat iv es t o f u ll- t im e salar ies. The lau nch
o f au t o - r ick shaw plat f o r m s has also helped t o
im pr o v e t he b u siness o f au t o r ick shaw dr iv er s.
A t t he g lo b al lev el, a st u dy b y a leading ho m e-
shar ing po r t al f o u nd t hat m o r e t han 1 0 , 0 0 0 o f
it s ho st s ar e u sing t he r ent al inco m e t hey ear n
t o su ppo r t t hem selv es w hile lau nching a new
b u siness.
7 F o r t he pu r po ses o f t his r epo r t em plo y m ent m ay inclu de ent r epr eneu r s, and self em plo y m ent .
18 The r ise o f t he shar ing eco no m y
The addit io nal inco m e g ener at ed b y t he shar ing eco no m y
incr eases t he spending / pu r chasing po w er o f t he indiv idu als.
The shar ing eco no m y enab les indiv idu als t o t ak e
ent r epr eneu r ial r isk s t hey w o u ld no t o t her w ise co nsider and
m o v e u p t he so cial ladder . The ent r y o f plat f o r m s w ill b e a
social benefit by introducing members of the lower social
strata to the latest technology and also by familiarizing them
w it h E ng lish, w hich w o u ld incr ease t heir o v er all em plo y m ent 7
and so cial pr o spect s.
The ag g r eg at io n co m m u nit y is f o r m ing cr o ss- par t ner ships
w it h m any st ar t - u ps t o f u r t her add f u nct io nalit y and ancillar y
ser v ices t o t heir plat f o r m s. F o r inst ance, a r est au r ant plat f o r m
has t ied u p w it h a leading t r anspo r t at io n plat f o r m t o pr o v ide
seam less cab ser v ices t o it s dining plat f o r m . V er t ical ex pansio n
o f capab ilit ies w it hin lar g er plat f o r m s is pr o v iding b u dding
entrepreneurs a very real opportunity to add value and fill
po t ent ial g aps in ser v ices.
2.4 Skill development
The shar ing eco no m y , b y it s v er y nat u r e, allo w s peo ple
to better utilize their skills and talents. Technological
im pr o v em ent int r o du ced b y plat f o r m s has led t o t he
im pr o v em ent in t echno lo g y sk ills o f t he u nsk illed w o r k f o r ce.
O n- dem and t echno lo g y plat f o r m s hav e also led t o t he ado pt io n
and u se o f E ng lish b y t he u nsk illed w o r k f o r ce f o r ce. These
b u siness m o dels ar e inco r po r at ing init iat iv es t o t r ain t heir
w o r k f o r ce so t hat t hey can co m f o r t ab ly u se t he t echno lo g y t o
efficiently run their businesses.
In addition to boosting the technology skills of the unorganized
w o r k f o r ce, t he leading t r anspo r t at io n plat f o r m s ar e inv est ing
in im pr o v ing t he b ehav io r al sk ills o f dr iv er u ser s. F u r t her m o r e,
o ne o f t he o n- dem and t echno lo g y t r anspo r t at io n plat f o r m s
in India has par t ner ed w it h co aching inst it u t es t o help
t he childr en o f it s dr iv er u ser s t o per f o r m b et t er in b o ar d
ex am s. A s a r esu lt , t he plat f o r m s also co nt r ib u t es in t he sk ill
dev elo pm ent o f t he ser v ice- pr o v ider s and t heir dependent s,
w hich can lead t o a m u lt iplier ef f ect in sk ill dev elo pm ent . In t he
ho t el space, t he plat f o r m s pr o v ide ser v ice t r aining f o r ensu r ing
standardized quality to customers across its properties.
2.5 Convenience
C o nv enience is a m at er ial incent iv e f o r cu st o m er s t o ado pt
ser v ices pr o v ided in t he shar ing eco no m y . The shar ing
eco no m y is co nv enient f o r b o t h t he co nsu m er and t he ser v ice
pr o v ider . It pr o v ides co nsu m er s w it h co nv enient and co st -
efficient access to resources and to access various services
w it h a f ew t aps o n t heir sm ar t pho nes.
display t hat allo w s t r av eller s t o b e inf o r m ed o f any delay s t hat
m ay ar ise.
P eer - t o - peer acco m m o dat io n sit es enco u r ag e a t w o - w ay r at ing
m echanism , w her eb y r ent er s can r at e g u est s and g u est s can
rate renters. The most obvious benefit of two-way rating
m echanism s in t he shar ing eco no m y is cr eat ing an eco - sy st em
o f acco u nt ab ilit y and t r anspar ency b et w een par t ies. 8

The sharing economy is also flexible from the perspective of
a service provider. Service providers also have flexibility to
o per at e acco r ding t o t heir co nv enience. F o r inst ance, in t he
t r anspo r t at io n space, t he dr iv er can lo g in t o t he sy st em at any
t im e o f t he day . In t he ho t el space, t he plat f o r m s allo w u ser s
t o b o o k r o o m s o n t he g o w it ho u t w ait ing f o r a r eply f r o m a
ho st , and t hey can check in and o u t inst ant aneo u sly inst ead o f
w ait ing at a r eser v at io n desk . C o m m u nit y - b ased m ar k et places
allo w peo ple t o r ent / shar e g o o ds su ch as cam er as, co m pu t er s,
t ab let s and t r av elling g ear t hat o ne do es no t u se f r eq u ent ly .
The shar ing eco no m y b u siness also im pr o v es t r anspar ency
o f b u siness f o r t he t ax au t ho r it ies. S m all seller s o r ser v ice
pr o v ider s w ho m ay no t b e t r anspar ent ly pay ing t heir sales t ax
o r ser v ice t ax , need t o b e m o r e t r anspar ent , as t r ansact io ns
ar e easily t r aceab le t hr o u g h t he plat f o r m and t hu s help in m o r e
transparent tax filings by the small aggregated entities.

G o ing f o r w ar d, t he ab ilit y t o access r eso u r ces and ser v ices

at any t im e and f r o m any place w ill b e a m aj o r dr iv er t hat w ill
at t r act m o r e peo ple t o t he shar ing eco no m y . In addit io n t o
co nv enience, b u ilding t r u st is ano t her cr it ical aspect t hat t he
st ak eho lder s in t he shar ing eco no m y need t o addr ess t o ensu r e
it s w idespr ead ado pt io n. G lo b ally , a leading peer - t o - peer
acco m m o dat io n co m pany is w o r k ing w it h
2.6 Transparency of business and au t ho r it ies t o ensu r e t hat r eg u lat io ns ar e
accountability ho no u r ed and t hat it s ho st s ar e aw ar e o f leg al
o b lig at io ns and lo cal r eg u lat io ns.
Techno lo g y has f acilit at ed t r anspar ency and acco u nt ab ilit y
b y dev elo ping o pen- ended, u ser f r iendly plat f o r m s t hat The co m pany has f o r w ar ded t he det ails o f
pr o m o t e shar ing am o ng u ser s. F o r inst ance, leading r est au r ant it s ho st s t o t ax au t ho r it ies and in so m e cases
plat f o r m s hav e a b r o ad dat ab ase o f r est au r ant s t hat ar e has co llect ed lo cal acco m m o dat io n t ax es o n
assig ned m ass r at ing s b ased o n it s u ser s ex per iences. b ehalf o f t he r espect iv e m u nicipal au t ho r it ies.
S im ilar ly , o n- dem and t echno lo g ies hav e cr eat ed a m o r e This incr eases t he t r anspar ency and
t r anspar ent r eal- est at e m ar k et in an o t her w ise o paq u e acco u nt ab ilit y and r edu ces t he po ssib ilit y o f
indu st r y b y pr o m o t ing pr ice t r anspar ency am o ng b u y er s and u ndeclar ed r ent al inco m e.
seller s and also b y st r eam lining t he b r o k er ag e pr o cess w hich is
otherwise difficult to navigate.

Tr anspo r t at io n plat f o r m s hav e int r o du ced m o r e t r anspar ency

in pr icing and co nsu m er s ar e g iv en an est im at e o f t he t r ip
co st in adv ance. F u r t her m o r e, t hey hav e int r o du ced a r at ing
m echanism o n t heir apps w her eb y dr iv er u ser s and u ser s can
b o t h r at e each o t her . In addit io n, t hey hav e a pick - u p t im e

8 Trust and transparency in the new sharing economy, Irish Times website, w w w . ir isht im es. co m / b u siness/ t r u st - and- t r anspar ency - in- t he- new - shar ing -
eco no m y - 1 . 2 3 2 3 0 6 6 , accessed 2 O ct o b er 2 0 1 5 ;

The Indian landscape 19

2.7 Impact on environment and
infrastructure
A s t r anspo r t at io n plat f o r m s b eco m e m o r e po pu lar , peo ple
ar e b eco m ing less dependent o n t heir o w n v ehicles t o g et
ar o u nd, r edu cing t he t o t al nu m b er o f car s o n t he r o ad. This
creates greater efficiency and has a favorable impact on the
env ir o nm ent , as w ell as r edu cing w ear - and- t ear o n pu b lic
inf r ast r u ct u r e, leading t o su b st ant ial sav ing s f o r pu b lic co f f er s.
G lo b ally , car - shar ing ser v ices hav e co nt r ib u t ed t o r edu ct io n
in t r av el co st s and G H G em issio ns. The shar ing eco no m y
emphasizes on re-use of assets rather than absolute
o w ner ship. P eo ple can u se pr o du ct s/ ser v ices w hen t hey
need it , w it ho u t hav ing t o o w n it . F u r t her m o r e, as t her e ar e
f ew er v ehicles o n t he r o ad, t his leads t o a r edu ct io n in r o ad
m aint enance co st s f o r m u nicipal au t ho r it ies.
In India, t he passeng er car m ar k et has b een o n an u pw ar d
clim b o v er t he last decade. H o w ev er , t he r o ad leng t h ( in
av ailab le k m s) , par t icu lar ly in t he m et r o s and t ier - I cit ies
is no t g r o w ing co r r espo nding ly . A s a r esu lt , t he phy sical
inf r ast r u ct u r e is sev er ely co nst r ained, leading t o f r eq u ent and
long traffic jams during peak hours.

D iagram 7 : Impact of car sharing 9

1 car sharing repl aces 9 - 1 3 v ehicl es

v ehicl e

=
0 .5 8 0 .8 4 R edu ct io n in g r een- ho u se g as ( G H G ) em issio ns per y ear f o r o ne
metric tons ho u seho ld
3 4 % -4 1 % R edu ct io n in G H G em issio ns per y ear f o r o ne ho u seho ld
R edu ct io n in v ehicle m iles t r av elled ( V M T) per y ear , co nsider ing
2 7 % -4 3 %
v ehicles so ld and pu r chases po st po ned

S o u r ce: M o b ilit y and t he shar ing eco no m y : im pact sy no psis; S pr ing 2 0 1 5 ; Tr anspo r t at io n S u st ainab ilit y R esear ch C ent er U niv er sit y o f C alif o r nia, B er k eley st u dy

9 M o b ilit y and t he shar ing eco no m y , B er k eley U niv er sit y , 2 0 1 5 , p. 2

20 The r ise o f t he shar ing eco no m y

 asso ciat es, sales ag ent s and r est au r ant m anag er s) asso ciat ed
w it h t he shar ing eco no m ies w ill need t o b e co m f o r t ab le w it h
t he u se o f sm ar t pho nes and t he int er net . In addit io n, t her e is a
pu sh f o r cu st o m er s t o st ar t b eco m ing t ech- sav v y b y u sing su ch
apps and nav ig at ing t hr o u g h em b edded f eat u r es su ch as u sing
m o b ile w allet s t o pay f o r ser v ices.

S o m e o f t he plat f o r m s pr o v ide a f r ee sm ar t pho ne t o it s dr iv er

O n- dem and t r anspo r t at io n plat f o r m s co nnect
u ser s f o r u sing t heir plat f o r m , w hich t hey also u se f o r o t her
r ider s t o t r av eller s and dr iv er s in a m o r e
per so nal act iv it ies inclu ding e- co m m er ce, m o b ile b ank ing ,
efficient manner leading to better utilization of
citizen services and bill payments, which also enable inclusion
v ehicles.
o f m o r e peo ple o n su ch dig it al plat f o r m s.
F o r inst ance, a per so n t r av eling f r o m D elhi t o
J aipu r can u se a lo ng dist ance r ide- shar ing
ser v ice t o lo o k f o r peo ple t r av elling o n t he sam e
r o u t e. The r ide- shar ing ser v ice co nnect s car D iagram 8 : S haring economy and its rol e in d igital l iteracy
o w ner s and co - t r av eller s and as a r esu lt , t he
f u el ex penses can b e shar ed b et w een m u lt iple
peo ple.

In addit io n, t he f u el co nsu m pt io n can b e S u pplier s ( dr iv er s, deliv er y asso ciat es,

r edu ced w hen m u lt iple peo ple shar e o ne car , et c. ) w it h f eat u r e pho nes
inst ead o f o pt ing t o t r av el separ at ely .

A s a r esu lt , t his leads t o r edu ced nu m b er o f

cars on the road, eases traffic congestion and
r edu ces f u el em issio ns.
S u pplier s w it h sm ar t pho nes

2.8 Digital literacy

The term Digital Literacy can be defined as the awareness,
at t it u de and ab ilit y o f indiv idu als and b u sinesses t o U se o f m aps t o S o cial m edia E - co m m er ce
appr o pr iat ely u se dig it al t o o ls and t echno lo g y t o ident it y , nav ig at e
access, interact, transact, manage, analyze and synthesize
dig it al r eso u r ces t o cr eat e o r co nst r u ct new k no w ledg e . The
shar ing eco no m y pr o m o t es dig it al lit er acy b y helping t o b u ild
a sk illed, t ech- sav v y w o r k f o r ce b y incr easing f am iliar it y w it h E - b ank ing M o b ile w allet s
smartphones, financial bank statements, technology and the
E ng lish lang u ag e.

C o m panies f acilit at ing t he shar ing eco no m y u se dig it al

plat f o r m s t o deliv er t heir pr o du ct s and ser v ices in a seam less
m anner . D u e t o t he r eq u ir em ent o f dig it al m edia su ch as
m o b ile dev ices, t he ser v ice pr o v ider s ( dr iv er u ser s, deliv er y

The Indian landscape 21

The shar ing eco no m y is also t r ansf o r m ing t he m anner in
w hich edu cat io n is co nsu m ed and deliv er ed. Inst it u t io ns
ar o u nd t he w o r ld dev elo p inf o r m at iv e m at er ial t hat , in t he
b r ick and m o r t ar eco no m y , w as f o cu sed o n j u st a su b set o f t he
population leading to its limited utilization. However, as online
plat f o r m s f o r shar ing b ecam e po pu lar , su ch m at er ial b ecam e
accessib le t o a m u ch b r o ader po pu lat io n t hr o u g h t he int er net .
Thus, knowledge sharing and information utilization picks up in
a b ig w ay .
C o m panies pr o v ide t echno lo g y plat f o r m s t hat allo w any o ne
t o set u p and r u n t heir o w n class. The shar ing eco no m y
enab les st u dent s t o w at ch v ideo t aped lect u r es and t ak e
quizzes online at their convenience. Education platforms or
k no w ledg e m ar k et places can pr o v ide a po w er f u l alt er nat iv e
t o t he t r adit io nal lear ning ex per ience and m ak es edu cat io nal
r eso u r ces m o r e af f o r dab le and r eadily av ailab le.
The shar ing eco no m y has a b ig r o le t o play in dig it al lit er acy .
F o r dig it al lit er acy t o play a k ey r o le in cr eat ing a su st ainab le
ent r epr eneu r ial shar ed ser v ice eco no m y , an at t em pt t o ado pt
the following initiatives will be a first step in powering the
dig it al eco no m y .
Change
in employment practices that enhance
access, par t icipat io n, m o b ilit y , co m pet it iv eness and
pr o du ct iv it y w hile m aint aining so cial pr o t ect io n and
w o r k er cer t aint y
Closing
the gender gap between male and female
em plo y m ent r at es
Increasing
fixed-term contracts and temporary
em plo y m ent
Develop
right skills for the digital economy to
r espo nd t o chang e
Create
a skills strategy at a country level
Support
shared service firms in training and
dev elo pm ent pr o g r am s t hr o u g h P P P m o dels
Engage
with international organizations to define
sk ills and pr o g r am s f o r su ccess in t he dig it al ag e
Ensure
coverage of new skills in primary, secondary
and t er t iar y edu cat io n r elev ant t o t he k no w ledg e
eco no m y
Defining
Key Performance Indicators (KPIs) for
m easu r ing t alent and sk ill ef f ect iv eness
22 The r ise o f t he shar ing eco no m y
A ct io n m u st b e t ak en t o ensu r e t hat peo ple ar e appr o pr iat ely
skilled and have the capability, flexibility and adaptability to
par t icipat e in t he w o r k f o r ce o f t o day and t he w o r k f o r ce o f t he
f u t u r e. S pecial co nsider at io n m u st b e g iv en t o act io ns t hat
m o t iv at e u nem plo y ed y o u t h and g r o u ps w it h lo w par t icipat io n
so t hat t he lar g er po pu lace o r w o r k f o r ce can b e g ainf u lly
eng ag ed.
India can cr eat e co ndit io ns f o r su ccessf u l and su st ained j o b
g r o w t h t hr o u g h ent r epr eneu r s and est ab lished b u sinesses b y
enab ling a f air and co m pet it iv e landscape su ppo r t iv e o f pr iv at e
sect o r g r o w t h; pr o v iding adeq u at e o r b et t er inf r ast r u ct u r e
t o su ppo r t new ent er pr ises and enco u r ag ing b r o ad- b ased
t o ler ance f o r f ailu r e.
R apidly chang ing t echno lo g y w ill co nt inu e t o im pact t he
nat u r e and t y pe o f sk ills r eq u ir ed in t he f u t u r e eco no m y .
S cience, Techno lo g y , E ng ineer ing and M at hem at ics ( S TE M )
o ccu pat io ns w ill need f o cu s in t he new eco no m y . B asic sk ill
needs w ill b r o aden and ev o lv e f r o m lit er acy and nu m er acy , t o
dig it al lit er acy , cr eat iv it y , pr o b lem so lv ing , cr it ical t hink ing and
r esilience. The env ir o nm ent is co nt inu o u sly chang ing and pr io r
experience and qualifications are no longer relevant or lasting.
L if elo ng lear ning , v o cat io nal sk ills and car eer r einv ent io n
b eco m es t he no r m . N o t all j o b s in t he new eco no m y w ill r eq u ir e
u niv er sit y edu cat io n appr ent iceships and o n t he j o b sk ills
w ill b eco m e m o r e cr it ical and dr iv e t he m iddle sk ills . This w ill
require sufficient technical and trade skills.
The incr easing r each o f dig it al and m o b ile t echno lo g ies w ill
co nt inu e t o enab le o ppo r t u nit ies f o r y o u ng ent r epr eneu r s t o
b e cr eat ed and g r o w n o u t side t r adit io nal m ar k et s, and t his in
t u r n w ill challeng e m at u r e b u sinesses t o r espo nd w it h sim ilar
ent r epr eneu r ial and inno v at iv e ef f o r t s. To b e su ccessf u l,
y o u ng ent r epr eneu r s r eq u ir e addit io nal, t ailo r ed su ppo r t in
areas such as access to finances, simpler regulatory norms,
t r aining and m ent o r ing and f o r u m s f o r co nnect ing w it h o t her
b u sinesses.
In conclusion, digital literacy will only flourish and be
su ccessf u l if t echno lo g y can cr eat e an incr eased im pact o n
so cio - eco no m ic pr o cesses t o nar r o w t he dig it al div ide and t he
r u r al- u r b an chasm in sk ills, dev elo pm ent , eco no m ic dispar it y ,
w o r k f o r ce m ig r at io n and ar b it r ag e.
C halleng es and r eg u lat o r y
hu r dles f o r t he shar ing
eco no m y

The Indian landscape 23

W hile the benefits provided by the sharing economy
ar e innu m er ab le, it s r apid g r o w t h also po ses co m plex
challeng es. W inning co nsu m er t r u st is an int eg r al elem ent
The inno v at iv e b u siness m o dels enab led b y t he shar ing
eco no m y ar e b lu r r ing t he lines b et w een per so nal act iv it ies
and pr o f essio nal ser v ices. This has co m plicat ed im plicat io ns
o f t he shar ing eco no m y , and is cr it ical f o r peer - t o - peer o n t ax at io n and r eg u lat o r y co m pliance. A s t hese b u siness
b u sinesses. A s t he shar ing eco no m y m ak es r apid inr o ads int o m o dels ev eo lv e, t her e w ill b e a need t o est ab lish r eg u lat o r y
o u r day - t o - day liv es, pr o t ect ing co nsu m er int er est s w ill b e f r am ew o r k s t hat addr ess t he o per at ing m o dalit ies o f t he eco -
o f par am o u nt im po r t ance. P eo ple ( co nsu m er s and ser v ice sy st em .
pr o v ider s) need t o t r u st b o t h t he plat f o r m t hey ar e u sing and
t he peo ple w it h w ho m t hey ar e co nnect ing .

C onsu mer- sid e B u siness- sid e

C o nsu m er t r u st and S ecu r it y and r isk R eg u lat o r y Tax co m pliance

saf et y m it ig at io n co nsider at io ns

C o nsist ency in ser v ice M anag em ent o f

q u alit y u nco nv ent io nal w o r k f o r ce

The challeng es f aced b y ser v ice pr o v ider s in a shar ing F o r t he shar ing eco no m y t o co nt inu e o n it s g r o w t h t r aj ect o r y ,
eco no m y ar e: businesses will have to find ways to foster trust. Authenticating
t he ident it y o f t he ser v ice pr o v ider is a g o o d m easu r e t o
3.1 Consumer-side b u ild a b asic lev el o f t r u st b et w een st r ang er s b u t t his is m o r e
challeng ing in a peer - t o - peer b u siness m o del as co m par ed t o
C onsu mer tru st and safety: Tr u st is a pr er eq u isit e f o r any
t he b u siness- t o - co nsu m er m o del. F o r ex am ple, no t ev er y o ne
f o r m o f shar ing , w het her it is t o u se ano t her s acco m m o dat io n
eng ag ed in t he shar ing eco no m y ser v ices has a passpo r t t o
or get into their car. It can be difficult to build trust with
upload, and they may not have a profile on leading social media
cu st o m er s v ia an o nline plat f o r m as t he t ech- sav v y co nsu m er s
sit es. In addit io n, lack o f t r anspar ent r eg u lat io ns m ay lead t o
o f t o day f o cu s m o r e o n af f o r dab ilit y and co nv enience t han
inst ances o f asy m m et r ic inf o r m at io n du r ing t r ansact io ns, i. e. ,
o n b u ilding lo y alt y w it h pr o v ider s o r so cial r elat io nships w it h
seller s m ig ht w it hho ld inf o r m at io n ab o u t pr o du ct s o r ser v ices
o t her co nsu m er s. M o r eo v er , lack o f acco u nt ab ilit y in co nsu m er
t hat w ill pr ev ent u ser s t o dist ing u ish b et w een g o o d and b ad
g r iev ances and it s r edr essal is a m aj o r b ar r ier in w inning
pu r chases. Ther ef o r e, t r anspar ency t hr o u g h r at ing s and
co nsu m er t r u st .

24 The r ise o f t he shar ing eco no m y

po sit iv e o nline r ev iew s play s a cr u cial r o le in g aining co nsu m er
t r u st and g ener at ing leads. According
to Aprameya Radha Krishna, former
co - f o u nder , Tax iF o r S u r e, E v er y st at e has it s o w n
S ecu rity and risk mitigation: The shar ing eco no m y m o del r eg u lat io n w hen it co m es r adio t ax is schem es and
is f aced w it h m u lt iple challeng es t hat r eq u ir e st r o ng r isk so m e st at es enf o r ce t r anspo r t at io n plat f o r m s t o
m it ig at io n st r at eg ies in place. co m ply w it h t he r adio t ax i schem es. S o m e o f t he
The pr o cess f o r so lv ing cu st o m er g r iev ances sho u ld b e w ell r adio t ax i r eg u lat io ns do no t m at ch w it h t he need
defined and responsibilities well established for the consumer, o f cu r r ent t im es su ch as hav ing pr int er s inside t he
o n t he r elev ent play er s in t he eco - sy st em r espo nsib le f o r t he cab , car r y ing y ello w t ax i b o ar d sig n o n t he t o p o f
q u alit y o f pr o du ct s and ser v ices. v ehicle.

C onsistency in serv ice q u al ity: The pr essu r e t o m aint ain For

instance, all drivers of radio taxis, black and
co nsist ent ser v ice q u alit y is hig h in a shar ing eco no m y y ello w t ax is and au t o s in M u m b ai hav e b een
m ar k et place as t he lev el o f cu st o m er ser v ice m ay v ar y issued a Public Services Vehicle Authorization
f r o m place t o place and su pplier t o su pplier . W it h t he b adg e. M aj o r it y o f t he dr iv er s u ser s, w o r k ing w it h
r apid im pr o v em ent in t echno lo g y , it m ay b e easy t o b u ild t r anspo r t at io n plat f o r m s do no t hav e t he b adg es,
a m ar k et place app, b u t it is no t easy t o pr o v ide co nsist ent which leads to non-compliance of state-specific
hig h- q u alit y ser v ices and scale it acr o ss m u lt iple lo cat io ns. law s.
The ser v ice pr o v ider s hav e t o k eep u p t o t he co nsu m er Another
state transport department has amended
ex pect at io ns o f a su per io r ex per ience at all t o u ch- po int s ev er y it s po licies t o pav e t he w ay f o r t r anspo r t at io n
sing le t im e. F o r ex am ple, a u niq u e ex per ience ho lds eq u al plat f o r m s t o o per at e. A cco r ding t o new r u les,
im po r t ance as ser v ice q u alit y in t er m s o f appeal o f t he shar ing apar t f r o m t he G P S - and G P R S - b ased t r ack ing
eco no m y in ho spit alit y . dev ices, a pr int er and a display panel sho w ing t he
pat h t r av er sed and t he t o t al dist ance co v er ed has
3.2 Business-side t o b e inst alled in t ax is. The co lo r o f t he r adio t ax i
R egu l atory consid erations: The t r adit io nal indu st r ies o per at e sho u ld b e w hit e, w it h a co lo r ed st r ip o n b o t h sides
under the influence of regulations placed by the GoI. However, o f t he t ax i, pr o m inent ly display ing t he nam e o f t he
w it h t he em er g ence o f t he shar ing eco no m y b u siness m o dels, licensee. Transportation platforms find it difficult
t her e m ay b e a need t o r e- ex am ine t he r eg u lat io ns ar o u nd t o co m ply w it h t his r eq u ir em ent as car s o n su ch a
them and sepcifically address the requirements of each net w o r k hav e m u lt iple o per at o r s and, t her ef o r e,
su b - seg m ent o f t he shar ed eco - sy st em . F o r ex am ple, w hile canno t car r y t he lab el o f o ne ser v ice pr o v ider alo ne.
r eg u lat io ns ar e in place f o r t r adit io nal t ax i o per at o r s, m o st
Indian states do not have specific regulations covering on-
dem and t r anspo r t at io n plat f o r m s. 1 0 W hile t he G o I has enact ed
g u idelines t hat lim it t he liab ilit y o f int er m ediar ies1 1 , m any
plat f o r m s f eel t hat g o v er nm ent s and r eg u lat o r s m u st clar if y
t he applicab ilit y o f t hese r u les t o v ar io u s sect o r s w it hin t he
sharing economy. In a welcome first step, the recent advisory
issu ed b y t he M inist r y o f R o ad and Tr anspo r t , G o v er nm ent o f
India has issued advisory guidelines to states that specifically
lo o k at r eg u lat ing o n- dem and t r anspo r t at io n plat f o r m s. 1 2

1 0 S t at e s M o t o r V ehicles r eg u lat io ns

1 1 Int er m ediar y L iab ilit y R u les, 2 0 1 1 ,

1 2 C lau se 1 . 2 , A dv iso r y f o r licensing , co m pliance and liab ilit y o f o n dem and inf o r m at io n t echno lo g y b ased t r anspo r t at io n ag g r eg at o r ( Tax is 4 + 1 ) o per at ing w it hin
t he j u r isdict io n o f India, M inist r y o f R o ad Tr anspo r t and H ig hw ay s, G o v er nm ent o f India dat ed 8 t h O ct o b er , 2 0 1 5 .

The Indian landscape 25

A s t he eco - sy st em g r o w s, t he r eg u lat o r y po licies sho u ld b e
ag ile t o k eep pace w it h t he r apidly chang ing t echno lo g ies. In
cr o w df u nding , f o r inst ance, a v ent u r e is f u nded b y r aising sm all
am o u nt s o f m o ney f r o m a lar g e nu m b er o f peo ple, t y pically
t hr o u g h an int er net - b ased plat f o r m . The Indian co r po r at e law
r eg u lat io ns r eq u ir e a co m pany t o g o t hr o u g h t he pu b lic o f f er
pr o cess f o r r aising f u nds f r o m m o r e t han 2 0 0 inv est o r s, ev en
w her e t he am o u nt s inv o lv ed ar e sm all. 1 3 A no t her ex am ple is
t he lack o f clar it y o n f ar es ar o u nd dy nam ic pr icing ado pt ed b y
t r anspo r t at io n plat f o r m s, w hich b r ing s t heir o per at io ns u nder
r eg u lat o r y scr u t iny .
M anaging the u nconv entional w ork force: The last t w o
decades hav e r eco r ded a st r u ct u r al shif t in t he w ay w e w o r k .
The t r adit io nal em plo y er - em plo y ee r elat io nship has ev o lv ed.
The shar ing eco no m y is dr iv ing t his f u ndam ent al shif t as
it r elies heav ily o n sho r t - t er m , elast ic em plo y m ent , r at her
t han t r adit io nal st ab le em plo y m ent . Indiv idu als r ender ing
ser v ices t hr o u g h t he shar ing eco no m y plat f o r m s par t icipat e
as independent co nt r act o r s, self - em plo y ed o r f r eelancer s.
Adequate background verification, training and skilling of this
w o r k f o r ce is im per at iv e f o r t he su ccessf u l deliv er y o f ser v ices
du e t o t he co nsu m er - f acing nat u r e o f t he b u sinesses. F o r
inst ance, an o nline edu cat io n plat f o r m pr o v ider has a m u lt i-
t ier r ev iew and o n- b o ar ding pr o cess t hat inclu des r ef er ences,
optional background checks and verification of social media
acco u nt s, o nline t r aining and ex am s and a m anu al r ev iew t hat
det er m ines w het her ev er y candidat e has t he ex per ience t o
m aint ain an appr o pr iat e lev el o f cu st o m er ser v ice.
D istinction b etw een empl oyee and ind epend ent contractor:
The pr im ar y dist inct io n b et w een t he shar ing eco no m y and
t r adit io nal indu st r ies is t hat t he shar ing eco no m y do es
no t o w n o r dir ect ly em plo y peo ple t o pr o v ide g o o ds and
ser v ices. A lt er nat iv ely , t he shar ing eco no m y pr o m o t es
m icr o - ent r epr eneu r s t o lev er ag e t heir plat f o r m s f o r g ain.
Independent co nt r act o r s also hav e t he ab ilit y t o o per at e in
t heir o w n t im e and ar e no t b o u nd b y t im ing r est r ict io ns.
A cceptance of d ynamic pricing: A s t he shar ing eco no m y is
dependent o n m aint aining a st eady su pply st r eam t o m eet
it s dem and, dy nam ic pr icing is an ef f ect iv e w ay f o r m ar k et
par t icipant s t o ensu r e a su pply o f ser v ice.
1 3 S ect io n 4 2 o f t he C o m panies A ct , 2 0 1 3 , M inist r y o f C o r po r at e A f f air s w eb sit e, ht t p: / / w w w . m ca. g o v . in/ M inist r y / pdf / C o m paniesA ct 2 0 1 3 . pdf , accessed 6
O ct o b er 2 0 1 5 ;
C o m panies( P r o spect u s and A llo t m ent o f S ecu r it ies) , R u les 2 0 1 4 , IC S I w eb sit e, ht t p: / / w w w . icsi. edu / po r t als/ 0 / P R O S P E C TU S % 2 0 & % 2 0 A L L O TM E N T. pdf , accessed
6 O ct o b er 2 0 1 5 ;
26 The r ise o f t he shar ing eco no m y
Insu rance: O n- dem and t r anspo r t at io n plat f o r m s hav e
specifically expressed challenges to Indias insurance
r eg u lat io ns w hen co m par ed t o m o st o t her j u r isdict io ns in t he
w o r ld.
1 . Insu r ance r at es and co nt r act s ar e b o t h pr e- det er m ined
under regulations and there is no flexibility or scope for
neg o t iat io ns.
2 . A ny new insu r ance pr o du ct w ill also hav e t o b e appr o v ed
b y t he r eg u lat o r .
3 . P eer - t o - peer ( P 2 P ) r ideshar ing b eco m es co m plicat ed t o
im plem ent in t he f ace o f t his r eg u lat o r y u ncer t aint y . This
is b ecau se t he M o t o r V ehicles A ct do es no t per m it pr iv at e
v ehicles f r o m ply ing o n hir e o r r ew ar d . If any v ehicle
w er e t o do so , t he insu r ance po licy asso ciat ed w it h su ch
v ehicle is deem ed v o id ab init io .
4 . F u r t her m o r e, as t he t er m hir e o r r ew ar d is no t
specifically defined, any vehicle that only charges the
b asic co st f r o m a passeng er f o r a r ide, also f aces t he r isk
o f it s insu r ance po licy no t b eing ho no r ed b y an insu r ance
co m pany .
5 . This sit u at io n is co m po u nded b y t he f act t hat ply ing any
v ehicle w it ho u t appr o pr iat e insu r ance is a pu nishab le
o f f ence u nder t he M o t o r V ehicles A ct .
N ew technol ogy: C o m panies in t he shar ing eco no m y st r o ng ly
b eliev e t hat t he G o I m u st r eplace so m e o f t he ex ist ing law s
law s and r eg u lat io ns im pact ing t he shar ing eco - sy st em and
allo w f o r lat est t echno lo g ies t o pr o sper in t he sect o r . F o r
ex am ple, t he law st at ing t hat each t ax i m u st hav e a phy sical
pr int er t o issu e inv o ices t o cu st o m er s at t he end o f t he t r ip
m ay b e r eplaced w it h sm ar t pho nes and em ail inv o ices t o
cu st o m er s.
T ax compl iance: The st r u ct u r e o f shar ing eco no m y
b u siness m o dels has ser io u s im plicat io ns f o r t he co m pliance
enf o r cem ent o f co nsu m pt io n t ax es. The shar ing eco no m y
eco sy st em inv o lv es pr o v ider s o f g o o ds and ser v ices t hat
o per at e o n t hin m ar g ins u se per so nal pr o per t y f o r b u siness
pu r po ses, and w ho ar e u nf am iliar w it h t he challeng es
associated with filing and reporting independent contractor
inco m es.

Ty pically , o n- dem and t r anspo r t at io n plat f o r m s o nly b r ing

t he co nsu m er and t he ser v ice pr o v ider t o g et her , t he act u al
S er v ice t ax im plicat io ns o n ag g r eg at io n
ser v ice deliv er y is f r o m t he ser v ice pr o v ider t o t he co nsu m er . is a challeng e, w it h incidence o f t ax at
In t his co nt ex t , t he t ax au t ho r it ies had r aised q u est io ns t he po int o f co llect io n. H o lding m o nies
r eg ar ding t he per so n liab le t o dischar g e t he ser v ice t ax o n t he in escr o w can b e deem ed inco m e, and
ser v ices deliv er ed. The F inance A ct 2 0 1 5 has no w int r o du ced pr o v ing t hat is o nly pass t hr o u g h is
pr o v isio ns u nder w hich t he plat f o r m is r eq u ir ed t o dischar g e
cu m b er so m e. S o w hile lar g e co m panies
t he ser v ice t ax liab ilit y o n t he ser v ices pr o v ided b y t he ser v ice
pr o v ider s. 1 4 W hile t his has pr o v ided so m e clar it y o n t ax at io n
have figured it out, the smaller startups
f o r o n- dem and t r anspo r t at io n plat f o r m s, so m e issu es st ill su f f er w it h a lack o f clar it y , and
r em ain u naddr essed inclu ding cr edit lo ss t o t he v endo r s. u nnecessar y delay dealing w it h t he law s
law s o f t he land.

Arjun Baljee,
Insurers are still trying to figure out Founder and CEO, Stayology
a w ay t o st r u ct u r e and pr ice t heir
pr o du ct s f o r t he shar ed eco no m y .
This m ak es t ech and analy t ics a k ey
co m pet it iv e adv ant ag e f o r ag g r eg at o r s
b y helping t hem select t heir v endo r s
and customers and incentivize good
b ehav io r .

Vishal Dixit,
Managing Director, Mayfield Advisors

1 4 Notification No 5/2015 dated 1 March 2015- Service Tax, Central Board of Excise and Customs website, ht t p: / / w w w . cb ec. g o v . in/ r eso u r ces/ / ht do cs-
servicetax/st-notifications/st-notifications-2015/st05-2015.pdf;jsessionid=2381E08677BE8529FB4BAE1D7A7A9FD7; accessed 6 O ct o b er 2 0 1 5 ;

The Indian landscape 27

3.3 Addressing the regulatory hurdles
associated with the sharing economy
To realize the full potential of the sharing economy, there
is a need that workforce markets, finance markets and the
laws of contract are flexible and adaptable. The sharing
eco no m y co m panies b eliev e t hat t he r eg u lat io n g ap b et w een
incu m b ent and new ent r ant s can b e b r idg ed b y est ab lishing
st r at eg ic o per at ing f r am ew o r k s and ex t r act ing m ax im u m v alu e
o u t o f shar ed r eso u r ces t hr o u g h self - g o v er nance m echanism s.
S o m e su g g est io ns em er g ing f r o m t he shar ing eco no m y
indu st r y ar e:
A s a w elco m e m o v e, t he cent r al g o v er nm ent
has issu ed adv iso r y g u idelines f o r o n-
dem and t r anspo r t t echno lo g y ag g r eg at o r s
and it is t he indu st r y s o pinio n t hat t hese
g u idelines sho u ld b e lar g ely f o llo w ed b y t he
st at e g o v er nm ent s.
A ccepting tech pl atforms to d o red u nd ant task s
Acceptance
and increased reliance on advanced
t echno lo g ies t o per f o r m r edu ndant t ask s inclu ding
inv o icing
For
example, a smartphone available to taxi drivers
o r deliv er y ag ent s m ay also per f o r m t he f u nct io n o f
g ener at ing and em ailing an inv o ice t o t he cu st o m er
New approach to legislation
Use
emergence of new business models as an opportunity
t o dev elo p a new , em pt y t he b o x appr o ach t o r eg u lat io n,
building on the committees research, findings, analysis,
and r eco m m endat io ns
This
approach to regulatory reform keeps intact only those
pr o v isio ns t hat ar e necessar y and r elev ant t o day
28 The r ise o f t he shar ing eco no m y
E stab l ishing strategic operating framew ork
Establishing
a strategic operating framework that
co nt em plat es k ey co nsider at io ns and enab les t he G o I t o
take specific policy decisions, evaluate those decisions and
m ak e m id- co u r se adj u st m ent s
This
framework could be based on a cross-jurisdictional
co m m it t ee w it h r epr esent at io n f r o m G o I, t ho u g ht leader s,
and indu st r y ( inclu ding ex ist ing o per at o r s and new m ar k et
ent r ant s) w it h a m andat e t o analy se t he o ppo r t u nit ies and
im pact s o f t he shar ing eco no m y o n t he eco no m y o f t he
st at e and m ak e co m pr ehensiv e r eco m m endat io ns t o help
t he st at e g o v er nm ent pass adeq u at e r eg u lat io ns
Creating
increased clarity for workers and users of the
shar ing eco no m y b y pr o v iding a ho w - t o g u ide o n t ax
co m pliance
Relaxing industry-specific regulations
Relaxing
regulatory controls to drive the growth of
t he shar ing eco no m y b u sinesses. F o r inst ance, su ch
regulatory flexibility could include low corporate tax rates;
better access to credit through financial market reform;
w o r k f o r ce m ar k et r ef o r m s t o at t r act t alent ed st af f and
flexible contracting laws
S trengthening sel f- gov ernance mechanisms
Implementing
bottom-up governance mechanisms by
utilizing information available that only the consumers
can pr o v ide. F o r inst ance, t he u b iq u it o u s u se o f r at ing and
r epu t at io n sy st em s is no t f o r ced inclu sio ns b y t o p- do w n
r eg u lat o r s. These m echanism s ar e t he r esu lt o f m ar k et
co m pet it io n aiding t he dev elo pm ent and su pply o f r eliab le
pr o du ct s and ser v ices
S har ing eco no m y and it s
r o le in k ey init iat iv es o f t he
G o v er nm ent o f India ( G o I)

The Indian landscape 29


T he benefits of the sharing economy companies are not just
lim it ed t o t he co nsu m er , em plo y ees o r t he so ciet y b u t t he
sect o r also indir ect ly helps in so m e o f t he G o I init iat iv es.
Digital India program
The shar ed eco no m y co m panies dir ect ly help in
ex panding t he r each o f t he int er net and sm ar t pho nes
in t he so ciet y . S ince sm ar t pho ne u sag e is o ne o f t he
m aj o r dr iv er s o f t he o n- dem and eco no m y , ser v ice
pr o v ider s and co nsu m er s need t o b e co nnect ed t o
t he Int er net t o par t icipat e. The shar ing eco no m y
co m panies in t he do m ain o f F & B , t r anspo r t at io n and
ho spit alit y su g g est ed t hat t hey hav e pu t sm ar t pho nes
in t he hands o f su ch peo ple w ho o t her w ise eit her
co u ld no t af f o r d o r w er e no t inclined t o ado pt o ne. The
incent iv e o f b et t er inco m e act s as a dr iv er t o pr o pag at e
t he dig it al lit er acy dr iv e. These co m panies also t r ain
t hem in t he u sag e o f int er net and it s asso ciat ed
benefits.
Skill India program
The shar ed eco no m y co m panies ar e no t o nly pr o v iding
dig it al lit er acy t o it s em plo y ees o r st ak eho lder s in t he
indu st r y , b u t ar e also t r aining t hem o n lang u ag e sk ills,
soft skills as well as basic mechanic skills for efficiency.
A ll o f t hese co nt r ib u t e t o w ar ds u psk illing peo ple,
w hich is t he b asic aim o f t he g o v er nm ent s sk ill India
pr o g r am .
The shar ing eco no m y co m panies ar e pu t t ing a
significant focus on training the staff in hotels, delivery
per so nnel, dr iv er s et c b ecau se cu st o m er sat isf act io n
has b eco m e a k ey su ccess f act o r in t he su ccess o f any
o f t hese co m panies. O ne o f t he leading t r anspo r t at io n
plat f o r m s in India has plans t o t r ain 5 0 , 0 0 0 w o m en
drivers to make them fit for the job and be micro-
ent r epr eneu r s t hem selv es.
30 The r ise o f t he shar ing eco no m y
S u st ainab le env ir o nm ent is o ne
o f t he m aj o r co nt r ib u t io ns t hat
a shar ed eco no m y is lending . B y
enco u r ag ing peer t o peer r ent ing ,
r eso u r ces su ch as f o o d, w at er and
electricity are utilized economically
and t hu s t he co ncept o f a shar ing
eco no m y as ag ainst indiv idu al
ownership is being popularized.
A ddit io nally , du e t o t he o r g anic
av ailab ilit y o f m o r e liv ab le spaces,
land and f o r est deplet io n cau sed
b y t he b u ilding o f new ho t els and
shelt er s w ill co nsider ab ly r edu ce.
Sachit Singhi,
Co-founder, Stayzilla
Positive impact on
the environment
The v er y co ncept o f t he shar ing eco no m y is b ased o n
efficient utilization of existing assets. Creation of new
asset s eg . ho t els do es hav e an adv er se ef f ect o n t he
env ir o nm ent . L esser car s o n t he r o ad w o u ld hav e a
po sit iv e ef f ect o n po llu t io n lev els and also cau ses lesser
w ear and t ear o f r o ad inf r ast r u ct u r e.
Smarter cities
The shar ing eco no m y co m panies, par t icu lar ly in t he
transportation sector, generate significant data on
the behavior of traffic in the city at various times of
the day. This data can be utilized to route vehicular
movements, identification of bottlenecks etc to reduce
congestion and ensure better traffic flow.
The o ppo r t u nit y ahead f o r t he
shar ing eco no m y in India

The Indian landscape 31

I nt er net penet r at io n in India co m par ed w it h t he o t her B R IC
and dev elo ped co u nt r ies is st ill nascent . H o w ev er , in t er m s
o f act u al nu m b er s, t he av ailab le po o l o f int er net u ser s t hat can
M o b ile pr o lif er at io n has b een a k ey dr iv er f o r t he shar ing
b e t ar g et ed is o nly t hir d in t he w o r ld, nex t t o C hina and t he
U S . F u r t her , India is po ised t o su r pass t he U S t o b eco m e t he
co u nt r y w it h t he seco nd- lar g est int er net u ser b ase in 2 0 1 5 .
With internet penetration at just 19.2%, there is significant
o ppo r t u nit y f o r t he co m panies in t he shar ing eco no m y t o g r o w .
eco no m y co m panies in all co u nt r ies inclu ding India. The
nu m b er o f m o b ile su b scr ib er s is ex pect ed t o g r o w at a m u ch
f ast er r at e du e t o decr easing co st s o f sm ar t pho nes and
af f o r dab le co nnect iv it y co st s. 4 G r o ll- o u t and incr ease in
3 G penet r at io n w ill b o o st speeds. S ince m o st o f t he shar ing
eco no m y co m panies lev er ag e m o b iles as a m ediu m t o r each
cu st o m er s, t hese co m panies ar e all set f o r a r apid g r o w t h.

Ind ia K ey d ev el oped B R IC cou ntries

cou ntries

Int er net u ser b ase 2 4 3 m 2 8 0 m 5 7 m 6 4 2 m 1 0 8 m 8 4 m

Int er net penet r at io n 1 9 .2 % 8 6 .8 % 8 9 .9 % 4 6 .0 % 5 3 .4 % 5 9 .3 %

O nline sho pper s 3 5 m 1 9 7 m 4 1 m 3 6 1 m 3 3 m 3 0 m

R et ail e- co m m er ce ( $ b illio n) 5 .2 3 0 5 .7 8 2 .0 4 2 6 .3 1 6 .3 1 7 .5

2 0 1 2 -2 0 1 4 C A G R 4 7 .2 % 1 6 .1 % 1 6 .7 % 4 0 .9 % 2 5 .0 % 2 1 .6 %
.
O nline as % o f t o t al r et ail 0 .7 % 6 .5 % 1 3 .0 % 1 0 .1 % 3 .8 % 2 .2 %

$ To t al m - co m m er ce m ar k et 0 .6 8 6 .0 2 2 .0 1 4 0 .0 1 .1 3 .0
( $ b illio n)

S o u r ces - Int er net liv e st at s, IA M A I, eM ar k et er , S t at ist a and Int er net r et ailer * A ll dat a as o f 2 0 1 4

The shar ing eco no m y t r end in India is g aining t r act io n as

more consumers, particularly urban millennials, are finding it
co nv enient and co st ef f ect iv e. S har ing per so nal pr o du ct s su ch
as o ne s ho m e o r car t hat ar e cu r r ent ly no t in u se b y t he o w ner
is st ill t o b e seen. H o w ev er , t he o ppo r t u nit ies it pr esent s ar e
su b st ant ial, g iv en t he dem o g r aphics, m ar k et dem and and shif t
in co nsu m er pr ef er ences.

32 The r ise o f t he shar ing eco no m y

 Till no w , t he shar ing eco no m y has b een m o r e im pact f u l in
t he co nsu m er m ar k et s e. g . t r anspo r t at io n and r et ail w her e
phy sical asset s ar e co nsu m ed as ser v ices. H o w ev er , as t he
b r av e new w o r ld o f co m m er ce u nf o lds, shar ing eco no m y
m o dels w ill m ak e r apid inr o ads t o inclu de a w ho le r ang e o f
int ang ib le ser v ices su ch as o n- dem and cleaning ser v ices and
H o u seho ld g o o ds deliv er y ser v ices. F u r t her m o r e, t he pr o v en su ccess o f t he
A ssets shar ing eco no m y has hu g e po t ent ial t o b e r eplicat ed acr o ss
A cco m m o dat io n indu st r ies su ch as healt hcar e and edu cat io n. V ar io u s f act o r s
m ak e t hese indu st r ies shar ing eco no m y - r eady . Int ense
competition and inherent inefficiencies in delivering education
Tr anspo r t at io n
and car e ar e dr iv ing pr o v ider s r elent less f o cu s o n eco no m ies
o f scale, and dig it al t echno lo g ies ( clo u d, m o b ilit y , so cial
m edia and analy t ics) ar e lay ing st r o ng g r o u ndw o r k f o r m ak ing
seam less shar ing po ssib le in t hese indu st r ies. S o m e u se- cases
inclu de t r anspo r t at io n ag g r eg at o r o f f er ing it s plat f o r m f o r
hear t - disease scr eening s o r adm inist er ing v accines. N u r ses,
w ho w o r k f o r ser v ice pr o v ider s inst ead o f o ne par t icu lar
ho spit al t hey ar e t o ld w her e t o r epo r t , b ased o n need.
S im ilar ly , apply ing shar ing m o del t o edu cat io n is a m aj o r st ep
t o m ak e edu cat io nal r eso u r ces accessib le and r eadily av ailab le.
S er v ices A k no w ledg e m ar k et place can pr o v ide a po w er f u l su pplem ent
t o t he t r adit io nal lear ning ex per ience.
S erv ices deliv er y

D o m est ic
help The ev o lv ing shar ing eco no m y b u siness
H o u seho ld models may lead to significant regulatory
cho r es chang es. A t t he m o m ent , ho w ev er , t he
shar ing eco no m y m ar k et is g r o w ing at a
q u ick pace w it h new st ar t - u ps em er g ing in
ex ist ing and new cat eg o r ies. Techno lo g y
has enab led t he co nsu m er t o ex per ience a
new w ay in w hich g o o ds and ser v ices ar e
consumed. Considering that the benefits of
t he shar ing eco no m y m o del ar e v isib le, t he
po t ent ial f o r g r o w t h is g r eat . A s clar it y o n
t he r eg u lat o r y env ir o nm ent ar o u nd t hese
Online staffing b u siness m o dels em er g es w it h t im e, t he
E x pertise ex ist ing m o dels w ill adapt t o t he chang es
and plat f o r m s w ill b eco m e m o r e secu r e
E du cat io n
b u siness m o dels. This w ill also enab le
co nsu m er s t o ex per ience a b et t er and
H ealt hcar e co nsist ent lev el o f ser v ice.

The Indian landscape 33

N o t es
C ontact u s
R anj an B isw as A nk u r P ahw a M il an S heth
P ar t ner and N at io nal D ir ect o r P ar t ner , TA S - Tr ansact io n P ar t ner , A dv iso r y -
Techno lo g y , M edia and Teleco m D ilig ence P I and India Techno lo g y L eader
R anj an. B isw as@ in. ey . co m A nk u r . P ahw a@ in. ey . co m M ilan. S het h@ in. ey . co m

Our offices
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A m b aw adi H y der ab ad - 5 0 0 0 8 1 S ect o r 4 2
A hm edab ad - 3 8 0 0 1 5 Tel: + 9 1 4 0 6 7 3 6 2 0 0 0 G u r g ao n - 1 2 2 0 0 2
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floor) 3 r d floor, Block C N O ID A 2 0 1 3 0 4
K o lk at a - 7 0 0 0 1 6 G au t am B u dh N ag ar , U . P . India
1 st F lo o r , P r est ig e E m er ald Tel: + 9 1 3 3 6 6 1 5 3 4 0 0 Tel: + 9 1 1 2 0 6 7 1 7 0 0 0
N o . 4 , M adr as B ank R o ad F ax : + 9 1 3 3 2 2 8 1 7 7 5 0 F ax : + 9 1 1 2 0 6 7 1 7 1 7 1
L av elle R o ad J u nct io n
B eng alu r u - 5 6 0 0 0 1 M u mb ai P u ne
Tel: + 9 1 8 0 6 7 2 7 5 0 0 0 1 4 t h F lo o r , The R u b y C - 4 0 1 , 4 t h floor
F ax : + 9 1 8 0 2 2 2 2 4 1 1 2 2 9 S enapat i B apat M ar g P anchshil Tech P ar k
D adar ( W ) , M u m b ai - 4 0 0 0 2 8 Y er w ada
C hand igarh Tel: + 9 1 2 2 6 1 9 2 0 0 0 0 ( N ear D o n B o sco S cho o l)
1 st F lo o r , S C O : 1 6 6 -1 6 7 F ax : + 9 1 2 2 6 1 9 2 1 0 0 0 P u ne - 4 1 1 0 0 6
S ect o r 9 - C , M adhy a M ar g Tel: + 9 1 2 0 6 6 0 3 6 0 0 0
C handig ar h - 1 6 0 0 0 9 5 th
F lo o r , B lo ck B - 2 F ax : + 9 1 2 0 6 6 0 1 5 9 0 0
Tel: + 9 1 1 7 2 6 7 1 7 8 0 0 N ir lo n K no w ledg e P ar k
F ax : + 9 1 1 7 2 6 7 1 7 8 8 8 O f f W est er n E x pr ess H ig hw ay
G o r eg ao n ( E )
C hennai M u m b ai - 4 0 0 0 6 3
Tidel P ar k , 6 t h & 7 t h F lo o r Tel: + 9 1 2 2 6 1 9 2 0 0 0 0
A B lo ck ( M o du le 6 0 1 , 7 0 1 - 7 0 2 ) F ax : + 9 1 2 2 6 1 9 2 3 0 0 0
N o . 4 , R aj iv G andhi S alai, Tar am ani
C hennai - 6 0 0 1 1 3
Tel: + 9 1 4 4 6 6 5 4 8 1 0 0
F ax : + 9 1 4 4 2 2 5 4 0 1 2 0

F o llo w u s @ E Y _ India

J o in t he b u siness net w o r k f r o m E Y

F o r m o r e inf o r m at io n, v isit w w w . ey . co m / in
E r nst & Y o u ng L L P
EY | A ssu r ance | Tax | Tr ansact io ns | A dv iso r y

About EY
E Y is a g lo b al leader in assu r ance, t ax , t r ansact io n
and adv iso r y ser v ices. The insig ht s and q u alit y
ser v ices w e deliv er help b u ild t r u st and co nf idence
in t he capit al m ar k et s and in eco no m ies t he w o r ld
o v er . W e dev elo p o u t st anding leader s w ho t eam t o
deliv er o n o u r pr o m ises t o all o f o u r st ak eho lder s. In
so do ing , w e play a cr it ical r o le in b u ilding a b et t er
w o r k ing w o r ld f o r o u r peo ple, f o r o u r client s and f o r
o u r co m m u nit ies.

EY refers to the global organization, and may refer to

o ne o r m o r e, o f t he m em b er f ir m s o f E r nst & Y o u ng
G lo b al L im it ed, each o f w hich is a separ at e leg al
ent it y . E r nst & Y o u ng G lo b al L im it ed, a U K co m pany
lim it ed b y g u ar ant ee, do es no t pr o v ide ser v ices t o
clients. For more information about our organization,
please v isit ey . co m .
E r nst & Y o u ng L L P is o ne o f t he Indian client ser v ing m em b er f ir m s o f
EYGM Limited. For more information about our organization, please visit
w w w . ey . co m / in.

E r nst & Y o u ng L L P is a L im it ed L iab ilit y P ar t ner ship, r eg ist er ed u nder t he

L im it ed L iab ilit y P ar t ner ship A ct , 2 0 0 8 in India, hav ing it s r eg ist er ed o f f ice
at 2 2 C am ac S t r eet , 3 r d F lo o r , B lo ck C , K o lk at a - 7 0 0 0 1 6

2 0 1 5 E r nst & Y o u ng L L P . P u b lished in India.

A ll R ig ht s R eser v ed.

E Y IN 1 5 1 0 - 1 1 4
E D N o ne

This pu b licat io n co nt ains inf o r m at io n in su m m ar y f o r m and is t her ef o r e

int ended f o r g ener al g u idance o nly . It is no t int ended t o b e a su b st it u t e
f o r det ailed r esear ch o r t he ex er cise o f pr o f essio nal j u dg m ent . N eit her
E r nst & Y o u ng L L P no r any o t her m em b er o f t he g lo b al E r nst & Y o u ng
organization can accept any responsibility for loss occasioned to any
per so n act ing o r r ef r aining f r o m act io n as a r esu lt o f any m at er ial in t his
pu b licat io n. O n any specif ic m at t er , r ef er ence sho u ld b e m ade t o t he
appr o pr iat e adv iso r .

B C

EY refers to the global organization, and/or one or more of the

independent m em b er f ir m s o f E r nst & Y o u ng G lo b al L im it ed