What is the future of the sharing economy and how to foresee it?



Uber reported its biggest quarterly loss ever with its ride-hailing services down 80% due to the Covid-19 pandemic. Lyft reported the same decline while AirBnB’s CEO anticipates that the company’s revenues will be half 2019’s total. It is clear that the pandemic has fully uncovered the high vulnerability of the sharing economy to economic and health circumstances. Worldwide, companies in the industry are in crisis mode and brace themselves to limit current and future financial and market damage as much as possible. At the same time, as consumers are getting used to take-away dinners with more diversity than ever before, Uber Eats revenues soared 54% year over year. As always, crises produce risks and opportunities.


Billion-dollar question. Managing the present is challenging but the (literally) billion-dollar question is what the long-term prospect of the sharing economy and its players is. The NYT quotes a tech analyst who states that up to 30% of revenues may disappear in the next one or two years with a portion that may never return. Like any other number, it is basically a shot in the dark, the current crisis is unique in many respects and nobody has experienced something similar ever before. So, how should companies (and investors) in this industries (or any other) proceed and base their strategic decisions on? Above all, relying on hope, beliefs or predictions is the utmost dangerous strategy in situations like these. It will lead for sure to what Dan Ariely’s calls ‘predictably irrational’ decisions. He adds to it that in order to prevent such decisions well-structured analyses are needed.


Building foresight capabilities.

The core of such future-oriented analyses is in developing a company’s foresight capabilities to notice change when it starts to unfold (instead of too long afterwards). This is not the time to only explore five, ten or more years ahead and envision how the world, industries and markets may look like in general terms or visionary images. Although it is often fun, and instructive when the analysis goes more in-depth, to read the host and variety of future scenarios that are posted everywhere, it is still a mile away from solid, well-informed decision-making. Future scenarios can definitely help to stretch thinking, challenge (implicit and explicit) biases, analyse dynamic interactions, and identify and test options (see my earlier post), it is not enough to take strategic and investment decisions with medium to longer-term (‘post-corona’) implications and especially not in the kind of circumstances companies find themselves today.


Map and monitor the future.

In the years to come, the sharing economy, like any other industry, will change its face, characteristics and dynamics again and again as the forces that shape, shift and may shake it up change. In order to foresee structural change - be it accelerating, decelerating, disappearing or newly emerging - as early as possible, it is crucial to map and monitor relevant forces in detail. Key to consider in the context of specific industries is, obviously, how the crisis itself and the (restart and recovery ‘post-corona’) period that follows will change future growth and developments in an industry. In order to pro-actively build and strengthen the foresight capability of companies, we have developed an approach to map and monitor key forces. It helps a company to foresee relevant structural changes in their industry and markets and the business opportunities and strategic risks they bring at an early stage. Let me know if your company is interested to map the future of your industry and stay ahead of the game.


Read more on New York Times: The Results Are In for the Sharing Economy. They Are Ugly.


#coronacrisis #foresight #strategy

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