A sharing economy, Chinese style
Tens of millions of people around the world are both eager to stop wasting underutilised assets – and willing to waste lots of time figuring out how to share them with strangers. Companies like ATzuche may make it work in China: sharing with Chinese characteristics.
The flip side of a liking for opulence is a taste for thrift – just what is needed, says Patti Waldmeir
Let’s share: cars, flats, power tools. Companies from eBay to Uber to Airbnb have discovered that tens of millions of people around the world are both eager to stop wasting underutilised assets – and willing to waste lots of time figuring out how to share them with strangers.
But surely this flavour-of-the-month business model has no hope of catching on in China? Didn’t Mao Zedong ruin the concept of the “sharing economy” forever? Any mainlander over the age of 25 has plenty of experience with sharing flats, cars and power tools: it used to be called communism.
And there is another hurdle too: the vast majority of Chinese are still savouring the joy of owning their very first car or flat. Why in heaven’s name would they want to share it with someone who might scratch, dent or burn it down, not to mention smoke in it, eat in it or conduct other, less mentionable activities inside?
But what makes this kind of asset-sharing attractive elsewhere in the world also makes it increasingly popular in China: it’s a fun way to make money (and that is as popular in China as it has ever been).
The flip side of China’s image of ostentatious opulence is a taste for thrift which is deep and enduring – and exactly what the “sharing economy” needs to thrive. The same instinct that makes Chinese elders queue for hours to get a few cents or pence off the price of eggs is making their Audi-owning children investigate how to make a few bob renting out their luxury cars through peer-to-peer car sharing services such as ATzuche.
Earlier this month, Roland Berger, the consultants, published a report predicting that the car-sharing market in China would grow by over 80 per cent each year for the next five years. This was thanks mostly to the vast penetration of mobile internet access in the country and the willingness of local governments to provide neat perks such as free parking areas for car sharers.
So far, the sharing economy in China does not look much like it does overseas. Uber, the driver-hailing app that European taxi drivers love to hate, has set up in China too, but it doesn’t use private cars because the government will not let it. The company can only connect riders with cars from established car rental companies – and partly as a result, its cars have become infamous for being about the most expensive rides in town.
Uber says it’s not all about price. The company’s Shanghai general manager Davis Wang says it’s a lot like buying coffee: you can get an instant cuppa for a measly Rmb1 – or you can spend Rmb60 to get your caffeine at the Sheraton. Starbucks has admirably proved that it’s possible to sell something that China doesn’t even really want (coffee) for far more than it’s worth, merely by rebranding it as a western luxury good. But it’s not clear yet that Uber can do for car mileage what Starbucks did for coffee beans.
And the mainland peer-to-peer car-sharing market isn’t much like its stereotype overseas either: ATzuche, for example, is mainly trying to connect people who want to drive a luxury car (but cannot afford one) with owners who want to sweat their Audis or Land Rovers to make a profit. It’s definitely not all about tree-huggers arranging a timeshare for the communal Beetle.
Govi He is a typical ATzuche car sharer: he’s a rich guy with a spotless white late-model Range Rover Evoque SUV – the kind of car that can cost up to Rmb1m in China. He travels a lot, and says that if he uses ATzuche to rent the car to another driver while he’s away, he can save the cost of airport parking.
Wait a minute: didn’t Confucius say time is money? How could it possibly be worth the hassle not just of meeting his counterpart to deliver the keys, but dealing with insurance paperwork and loss of use if he wrecks the car? Mr He is planning to use ATzuche’s concierge service to handle all that. Let’s check back with him once the Land Rover has been in a few accidents, and see if he’s still a believer.
Even ATzuche co-founder Chen Weiyu says her own family balked at the idea of car-sharing. Cars are loved like a “second wife”, she says – given a choice, no one wants to share them.
But China doesn’t have a choice: there are 100m licensed drivers in China who do not own a car, number plates can cost as much as a new car anywhere else, and then there are the traffic jams and the pollution. Mao couldn’t make it work – but maybe ATzuche can: sharing, with Chinese characteristics.
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