On June 3, the Price Supervision and Competition Bureau of the State Administration for Market Regulation, together with the Anti-Monopoly Bureau and the Department of Network Supervision, held an administrative guidance meeting in the field of “shared consumption”. The mainstream domestic brands of shared consumption participated in the meeting. At the meeting, the Bureau of Price Supervision and Competition delivered the “Administrative Instructions from the State Administration for Market Supervision” to the participating companies on the spot. In a sense, this is a landmark event in the development of China’s sharing economy. Regarding the sharing economy, it is indeed the time to look back, reflect and look forward to.
The industry generally believes that 2014 is the “first year” of China’s sharing economy. Since this year, shared bicycles, shared power banks and even shared cars have gradually entered the daily lives of the people. While bringing convenience to life, they have also caused issues such as municipal management, environmental protection, and consumer safety. On the whole, the social value of the sharing economy in China has been generally recognized over the years, and the sharing economy has gradually entered a period of relative stability. However, in the recent period, there has been a sudden wave of collective price increases in the sharing economy, which has attracted attention from all walks of life. For example, the shared power bank used to average 1 yuan per hour, but now it has risen to 6 to 10 yuan in some scenic spots; another example is the shared bicycle, which used to be 1.5 yuan for half an hour, and now some have an hourly charge of 6.5 yuan. It is in this context that the State Administration for Market Regulation convened an administrative guidance meeting, hoping to guide the healthy and sustainable development of this industry.
The first thing to note is that the price increase itself is not a problem. Market entities have the right to price the products or services they provide. This is a basic rule of the market economy and cannot be denied. We cannot and should not return to the era of price control. This should be the basic premise for us to discuss this issue. However, in the recent period, there has been an extraordinary collective price increase in the shared consumption field. The deep-seated problems reflected by this phenomenon need to be paid attention to. If this problem cannot be resolved, China’s sharing economy will not have a healthy and sustainable development.
As researchers have pointed out, China’s sharing economy has had problems with capital-driven, ultra-low-price competition, and race-staking from the very beginning. In a short period of time, a large amount of capital has poured into the sharing economy. It should have embodied a saving and efficient sharing economy, but it has become an asset-heavy operation. Competitors from all walks of life invest resources regardless of cost to achieve the goal of seizing the market. Once upon a time, the shocking shared bicycle “cemeteries” in major cities were a typical portrayal of the rapid and inefficient and extensive development of the capital-driven sharing economy in the early days. The sharing economy, which is characterized by saving resources and improving the efficiency of the use of goods, has created a lot of waste and environmental pollution. This cannot but be said to be a great irony.
In addition, from an economic perspective, the world does not last foreverFor free lunch, users of shared consumption have to pay for the cost caused by the previous extensive and inefficient operation, and this price must be quite expensive. The latest situation in the sharing economy field just verifies this point. In addition, it cannot be ignored that in order to maintain the market structure formed by burning a lot of money and deter the emergence of new competitors, the previous entrants will definitely adopt various tricks to eliminate and restrict competition, such as exclusive authorization. , Coordinated price increases, etc. And this is likely to touch the bottom line of the anti-monopoly law, anti-unfair competition law and other related laws that maintain the order of market competition.
If China’s sharing economy cannot get out of the above vicious circle, it will not be able to achieve real long-term development. China’s sharing economy must “return to its original aspirations.” The “initial intention” here refers to the value pursuit and value promise of high-efficiency, economical, and refined management that initially promoted the development of the sharing economy, and reduced unnecessary waste of resources. The soul of the sharing economy is not extensive flooding, but through efficient use of resources to achieve the goal of reducing costs and improving consumer welfare. The sharing economy driven by capital is actually a false sharing economy, which is destined to be unsustainable, and does not meet the requirements of maximizing social welfare, and cannot be truly recognized by consumers.
China’s sharing economy must move forward on the right path. It must completely abandon the “cutting leeks” mentality towards consumers, and truly take the improvement of consumer welfare as a value goal. Consumers provide convenience in life and create value for society to win users. In the early stage, a large amount of money was burned to cultivate user habits, and once the user became dependent on a specific service, he raised the price to “cut the leeks”. This method is actually difficult to sustain. The reason is simple. When the capital is rushing in and the money burning model is popular, the operation of enterprises often lacks sufficient refinement and awareness of cost control and efficiency improvement, which will inevitably lead to astonishing waste. These have to be made up from consumers, which will inevitably lead to ultra-high pricing in the later stage, and the excessive pricing completely deviates from the purpose of the sharing economy and the tolerance of consumers, resulting in unsustainable business models.
I hope that China’s sharing economy practitioners can take the administrative guidance as an opportunity to return to the original intention of the sharing economy and find the “right way” for the coordinated development of business interests and social values. And keep moving forward.
(The author is a professor at Peking University Law School and director of Peking University’s E-commerce Law Research Center, the original title is “Sharing Economy: Back to the Original Heart, Only to Move Forward on the Right Path”)