ICTs for the Sharing Economy

By Timothy Meyers

According to the World Health Organization (WHO), Vietnam is among the 25 countries in the world with the greatest number of road fatalities per capita. A recent WHO report states the country has over 24 road fatalities per 100,000 inhabitants per year, resulting from dense and long-lasting traffic patterns dominated by motorbikes. The rise in motorbikes has also brought a significant rise in air pollution. A 2012 study released during the World Economic Forum in Davos listed Vietnam among the top 10 countries with the worst air quality, and Hanoi as the most polluted city in Southeast Asia.

The country has begun to address the issue, including implementing policies to stagger work and school hours and starting the construction of Hanoi’s first subway system. While long-term efforts to take motorbikes off the streets slowly take into effect, one social entrepreneur has been developing his own solution to the city’s transportation woes. Nam Nguyen Thanh founded Dichung.vn, Vietnam’s first ride-sharing platform. By promoting carpooling, Dichung offers an organic solution to reducing CO2 emissions, gas spending, and transportation-related injuries across big cities.

Modeled after other successful ride-sharing platforms like BlaBlaCar and Zimride, Dichung’s online platform provides an intuitive interface for matching passengers with drivers. Users enter their origin and destination points along with a day and time, and Dichung provides a list of drivers offering to provide transport. Similarly, car, taxi, motorcycle, bicycle, and bus drivers can set up routes and set a price for each available seat, with the option to use Dichung’s price calculator based on vehicle type, travel time, and cost of gas. The company currently offers over 500 trips per day, and is growing steadily as it continues to focus on new customer segments and transportation modes.



Not unlike other initiatives that seek to exploit the growing “sharing economy”, Dichung still faces important hurdles. The first one is cultural. Despite the success of carpooling services in Europe, Asian cultures are much less comfortable with the idea of sharing their vehicles with strangers. To properly expand, Dichung has to change Vietnam’s culture of trust. So far, to verify the trustworthiness of a driver, the company has relied on past driver ratings and exposing drivers’ Facebook profiles to reduce anonymity. Another big issue is with matching supply and demand for transportation services. Dichung’s 500 listed trips per day do not reflect the actual number of resulting ride shares; because of start location, end location, and time of day constraints, successful matches are scarce, and many seats are left unfilled. These hurdles complicate the company’s expansion efforts, but new ideas, such as providing event or holiday-centered transportation, may help to mitigate these problems.

Regardless, one thing is certain: Dichung and other companies have demonstrated the potential of the sharing economy as a positive force on the developing world. ICTs and matching algorithms are inexorably linked to this phenomenon, allowing individuals with common needs to discover one another, bringing disparate communities together to mutually benefit from the sharing of goods. The end result is that individuals and families can optimize the value of their assets, while helping to strengthen social cohesions within and across communities.

Sources:

http://newamericamedia.org/2012/03/hanoi-most-polluted-city-in-southeast-asia-expert-says.php

http://english.hatch.vn/7/post/2013/07/hatch-open-22-startup-case-startup-with-the-sharing-economy-dichungvn-july-20.html

http://www.csip.vn/en/csip-social-enterprises/dichungvn-ride-sharing

11 comments:

  1. Great post Tim! Startups in India are also experimenting with this idea:
    http://gigaom.com/2013/08/19/meet-the-startup-thats-looking-to-be-the-zipcar-of-india-zoom/

    However, the "trust" factor is the key determinant for success/failure of these initiatives. Especially in the developing world where it gets increasingly difficult to verify a person's background just by looking at his public Facebook page.

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  2. I liked your post, Timothy! I totally agree that we need to get people to share (everywhere!) in order to improve and reach what us economists ;) call Pareto efficiency. I think this every time I'm on the bridge over to SF.
    I was really struck by a sentence you wrote: "To properly expand, Dichung has to change Vietnam’s culture of trust." I found interesting that Vietnam's culture rather than the app would have to change for the app to scale.
    On another note, there is also very interesting taxi-sharing and safety stuff happening in Latin America where the "millionaire's ride" phenomenon (http://en.wikipedia.org/wiki/Express_kidnapping) is wide-spread. A bit different but some of the apps' ideas are similar. One is is Taxiaviso (Taxi Warning), a smart-phone application that was deployed in Mexico in 2011. Once hailed, the taxi can be verified prior to boarding: The user types in the license plate number and the system momentarily responds with a verification or denial. Taxiaviso also allows the user to double-check approximate prices, track the car’s route via GPS and take a photograph of the driver’s credentials (usually displayed on the taxi’s window). All recorded information is sent to the user’s social networks, such as Facebook and LinkedIn. Check it out: https://taxiaviso.com/home/

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  3. Very interesting post Timothy! Thank you.

    About air pollution, a French research institution is developing a prototype that will able everyone to check an hyper local and 3D view of the air pollution (on a smartphone for example). It could be a good solution to help government in developing countries to reduce faster the air pollution in big cities.

    Here is an article about that, Timothy for you it would be ok, for the others it is in French but you can look at the pictures :)

    http://abonnes.lemonde.fr/planete/article/2014/02/28/visualiser-la-pollution-de-sa-ville-en-3d-une-premiere-mondiale_4375573_3244.html

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    1. Wow, Antonin, this is interesting! (Chrome translated it for me pretty well!) I think if we implemented this app in most developing countries, the screen will be pretty much all red and orange- traffic, pollution, etc! :)

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  4. Hi Timothy,

    You've picked a topic close to my heart as a former student of transportation infrastructure. I am a big fan of ride sharing, but I wonder if it isn't better to suit solutions to the culture rather than trying to change a culture to suit a solution? Perhaps instead of ride sharing, electric vehicles should be pitched to reduce emissions? Moto taxi's are a true small business, giving financial independence to a large number of individuals who would otherwise be earning minimal wages as unskilled labor. Keeping small vehicles like moto taxi's on the road might even improve safety, since the alternative is likely a greater percentage of traffic being heavy vehicles. What do you think about phasing out gas-powered moto taxi's for electric vehicles as a way to support these individually run businesses and reduce emissions?

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  5. Drawing on Crysta's comment a bit, what are the ramifications to the established transportation service industry? We have seen a backlash in the USA to similar services by taxi drivers who see this paradigm as undermining their livelihood while avoiding complying to government regulations. When demand for these services are strong, it can force change by the establishment, but if this is more in response to a greater societal problem (safety & pollution) where there is a weak incentive for accountability at the individual level, tensions in this regard could provide a barrier to adoption.

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    1. I'm curious too, Eric. One of my friends had recently quit a similar service in the bay area (the company with the pink mustache cars) in part because of threats from taxi drivers. Or else, maybe one can think of this as a normal way of business- old models being replaced by more efficient models?

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  6. Good choice of topic, Tim! Also, I agree with Crysta's comment - " if it isn't better to suit solutions to the culture rather than trying to change a culture to suit a solution? " As you pointed out, it is not very common for people in Asian cultures to feel comfortable sharing rides with strangers. It could be nice if they designed a solution that fits in the context - for example, an app that allows people organise carpool rides with friends/co-workers/neighbours, maybe?

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    1. Like cramping even more people (sometimes more than 5) onto a motorbike? ;) I must say I have witnessed very creative ways to fit people and animals into/onto vehicles in these countries. I've carried two chickens and a child on my lap while sitting on a piece of luggage in a taxi (none of which belonged to me). The issue might just be to maximize this already existing trend.

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  7. Very interesting post, Timothy.
    I'd like to comment on your remark about "changing Vietnam's culture of trust". Since changing culture is kind of tough, maybe we could raise the following question: What can Dichung.vn provide in order to get "trust" of the way?
    Just a quick brainstorm: encourage groups and carpooling communities, implement the safety measures provided in taxiaviso -as mentioned in previous comments, etc
    Anyway, thanks for sharing!

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    1. Thanks Gustavo! You and others bring up good points about trust and how difficult it can be to overcome this issue. I didn’t know about Taxiaviso – it looks like a great potential solution! I think in addition to this, focusing on niche markets like schools or universities could be a good. Drivers and passengers will be comfortable knowing that they have something in common, and they are typically younger in age and more likely to be okay with carpooling.

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