Sharing economy gains in transport

Traditional transport is unlikely to lose passengers.

Uber is criticised by taxi services because its drivers do not need a licence.Uber is criticised by taxi services because its drivers do not need a licence. (Source: AP/TASR)

IMAGINE you plan a trip. The place is hard to access by train or bus and you do not have a car to use. However, there is a way to find a person to get you there and for a reasonable price.

Known as the sharing economy, it is gradually penetrating into people’s lives in Slovakia. Thanks to mobile applications people can find available room in other people’s vehicles, or use a service other than a taxi, and pay less. The popularity of these possibilities for cheaper travel is increasing and there is much space for further development, but analysts say that there are still problematic areas and people need to be careful when using the new services.

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“Thanks to progress in information technologies and their accessibility to the public, the possibilities which were unimaginable before are now available,” transport analyst Jozef Drahovský told The Slovak Spectator.

Rastislav Cenký, director at the Institute for Transport and Economy, however, says that this kind of transport is nothing new in the world.

“New and attractive are only the possibilities of its promotion and ordering services via mobile applications,” Cenký told The Slovak Spectator.

Uber vs. BlaBlaCar

Slovaks can already use several applications based on the sharing economy. For automobile transport, there are mainly two: Uber and BlaBlaCar.

Uber started in Bratislava in August 2015. The service is similar to taxis, with the exception that the drivers are ordinary people using their own vehicles.

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It works in a way that customers use their mobile phone and find out via the application how many available vehicles are close by. After setting the destination they immediately learn the price. When arriving to the place, they do not pay the driver, but the sum is deducted from the users’ payment card which they enter during registration. They also can rate the quality of the driver.

BlaBlaCar launched its services in Slovakia in mid-January 2016 after it had acquired Jazdomat, a system developed for the Slovak and Czech market. Unlike Uber, this application offers an empty space in cars whose owners plan to journey longer distances and do not want to travel alone. The desired destination is reached regardless of the interest of other passengers.

“It is kind of inter-city long-distance transport, sharing the costs, and not employment for professional drivers,” said Pavel Prouza, manager of BlaBlaCar for the Czech Republic and Slovakia, as quoted by the TASR newswire.

All the users need to do is to register in the system as a driver or passenger, mark where they want to travel, and then choose from the offered possibilities. 

Its developers say that the system is based on trust and references. The price is fixed, calculated from the number of kilometres, the website wrote.

Though there already exist groups on social networks where people can agree on travelling to certain destinations, the possibilities there are limited, BlaBlaCar manager Pjotr Jas explained in an interview with the Denník N daily.

“Groups on Facebook are mostly linked to travel from one specific place to the other,” Jas said. “We are not limited by this; we try to cover as many places as possible.”

Moreover, users do not have to know people on Facebook, while they can find relevant information and also references on drivers using BlaBlaCar, he added. 

Users need to be careful

Among the main advantages of these applications is the concentration of supply and demand in one place, which in the end decreases the price of the services, analysts agree. Moreover, they enable travellers to effectively use the space in cars which would otherwise be empty, adds Vladimír Baláž, an economist at the Institute for Forecasting of the Slovak Academy of Sciences.

On the other hand, there are certain risks to safety and reliability, unlike the licensed taxi services and carriers. Taxi drivers, for example, need to meet several requirements to obtain a licence, but an Uber driver can be someone without necessary experience, responsibility and adequate control, Cenký said.

Furthermore, the services are not certified. If customers of Uber are involved in an accident, they cannot claim compensation, Baláž warned.

Another problem is potential tax evasion. Most of the drivers do not issue tax receipts and it is also very hard to monitor them, Cenký and Baláž agree.

Regarding BlaBlaCar, users need to realise it is up to them to contact the driver and agree on the details of the journey. The application also does not guarantee the quality, Martina Čmielová of the company told the website the website wrote .

In case of an accident, the rules are similar as if the drivers were travelling with a family member. No other company is responsible, Čmielová stressed noted.

“The only way is to ask the platform providers to secure that the offered services have a certain standard and quality,” Baláž told The Slovak Spectator. “But this is not possible under current legislation.”

Cenký assumes there should be certain laws for such services.

Several EU countries, for example, have adopted new rules anchoring the position of traditional providers in the market, which however make it difficult to introduce new services, Drahovský explained.

He mentioned as an example a journey when colleagues drive together to work and share the cost of fuel. 

“Though they do it without profit, under the valid rules they need a licence and much administration which thwarts the system of vehicle sharing,” Drahovský said.

Freight transport’s potential

Analysts expect that sharing economy principles will be used in more types of transport in the future. It is possible that public transport, buses and trains might gradually introduce the possibility to order transport services online. Despite the growing popularity of these applications, they do not have any significant impact on bus or railway transport, according to Cenký.

Sharing economy principles would, however, be beneficial for freight transport, several analysts agree. Similar principles have already been used.

“Yet there is still space for improvement and introduction of similar applications as in personal transport for utilising the vehicles,” Cenký added.

Baláž noted that in the past there were so-called logging centres where trucks stopped and were additionally loaded in order not to travel half-empty. 

Drahovský, however, says that Slovakia rather tries to protect the usual services. For example, he said it stopped express parcel service in railway transport, which meant that the companies need to now order an entire wagon. He added that as a result, the number of courier services increased, but that this is different from the sharing economy principles.

Transport and logistics companies already try to load the vehicles to the maximum extent in order to use them effectively and minimise a negative financial balance, said Andrej Fekete, PR manager of the hauliers’ association ČESMAD.

“Thus it is now hard to talk about ‘sharing’ the cargo space by several companies,” Fekete told The Slovak Spectator.

However, some companies use EMS vehicles, which are bigger and bear more weight. This may possibly be a way to use sharing economy principles, as the transporting firm could collect goods from several companies and then transport them to the common destination, Fekete added.

Though he admits that sharing economy principles will certainly save costs and reduce emissions and traffic burdens, its principles are not covered by any law. Fekete said this means that those sharing freight transport could avoid legal and tax duties that other entrepreneurs have to observe.

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