11 September 2015

Sharing, but not really caring – why the sharing economy is not taking off in Italy


When I went back to Rome for the summer holidays, I was pleased to see that – finally – the city is starting to show signs of the sharing economy. I noticed several of Car2Go’s white smart cars and Enjoy’s red FIAT 500s roaming the streets, stopping at dedicated parking spots and generally functioning – at first sight – quite well. It felt like a significant change to me, knowing that Italy is generally not at the forefront of economic innovation.

My optimism didn’t last. One night, as I was passing by a patch of green on my way home, I saw a smart car parked very, very badly. Now that is nothing special for Rome. I have seen cars double-parked on zebra crossing at a junction. But that car – which I recognised as a Car2Go smart car – was just there. Right in the middle of the patch. It seemed to have been there for a while, too.

I mused for some time about what could have happened to the car and its driver, and walked home. I didn’t think about that until a few days after, when a friend told me about her experience using one of Enjoy red FIATs. “They are very convenient,” she said, “but people keep stealing things from it. You know, it is easy get in, drive somewhere, and taking away the radio or anything else valuable before leaving the car.”  A bit upset, but still determined not to give up hopes for the future of the sharing economy in Italy, I did some internet research.

The results weren’t encouraging: I found that quite a few techies had vented their dissatisfaction with Rome’s car sharing services on twitter and their blogs. Besides the technical faults, software failures and GPS fiascos, what spoiled customer experience was especially the inability of call centre operators to deal with emergencies. In truly Italian fashion, a customer who could not leave its car because of a problem in the end-of-rental process had to spend two hours on the phone listening to the same jingle over and over as he waited for an operator to pick up, in vain. He was charged 49 euros for the car he had parked hours before, and only after considerable ordeal, several angry email and a few weeks he got the amount refunded.

Researching further didn’t yield anything more promising. I even found out that Rome had a bike sharing system since 2008, which I knew nothing about, despite having lived in the city for most of my life. A few years ago the programme failed quite miserably, and the only reminiscences of it are abandoned bike racks with a few broken bicycles still tied to them. The project was first managed by a Spanish private company, Cemusa, and then Rome’s transport company ATAC took over – the beginning of the end. Although more racks and bikes were added, many were stolen and damaged. The service did not use pre-registered credit cards, which encouraged theft, and did not let users have half an hour free as many other similar services around the world.

Customers are not the only ones to be upset about the state of car sharing in Rome. Both Enjoy and Car2Go have been threatening more or less explicitly, to move business elsewhere. Enjoy, which belongs to Italy’s main oil and gas company ENI, has launched scooter sharing in Milan, but not in Rome, whereas Car2Go, a German company, could close its Italian branch altogether. Both companies have complained about customers misusing their vehicles: the most common cases concern cars parked in remote corners of the city, vandalised with spray paint, and damaged by careless users. As one Italian blogger pointed out, there is very little regulation around the use of car sharing: people have learned quickly that they can get away with using the service to do things they would not normally do with their own cars.

Other sharing economy projects have been strongly opposed by powerful lobbies, which have ‘persuaded’ the government to pass regulations that outlaw any ‘unfair competition’. It is the case of UberX, recently banned by the Court of Milan after protests by taxi drivers; and AirBnb, which has been strongly opposed by hotel owners in Rome, who are eager to concentrate the profits from hosting millions of pilgrims during this year’s Jubilee.

It is clear that there are at least three major problems for the development of the sharing economy in Italy. The first one is people’s lack of civic sense, and respect for shared services – in no other country does is tragedy of the commons better demonstrated than in Italy. The second is lobbies’ fear for competitions, as the case of UberX and AirBnb have shown. The third is the government’s protection of such lobbies, which damages sharing economy projects and small, innovative businesses.

Additionally, the ever-lasting issue of the development gap between north and south does not help the establishment of sharing services on a national scale. In Milan, car, bike and now scooter sharing is a well-functioning, popular business. The city administration, in collaboration with citizens, has promoted projects such as Milano Sharing City and Sharexpo, aimed at creating a network of shared services to keep up with the crowds of tourists visiting the EXPO. The idea was to provide visitors with a unique experience of the city by staying in private houses, eating with local families and using shared transports. As a result, house rental alone has risen by 57.8% in a few months.

The same cannot be said about Rome. Local administrations in the south, which are often implicated in dodgy business with organised crime and lobbies, are partly to blame. But the reason behind such divide is deeper and has its roots in the historical psychology of the country.

Italy was not unified until the 1860s. The north, from the Alps to Florence, was divided into small, powerful and independent reigns, all with different dialects and currencies. What these micro-states had in common was economic development, cultural dynamism and international trade. The cultural and economic elite concentrated around the cities of Milan and Turin included liberal intellectuals, businessman and members of the well-educated bourgeoisie. Throughout the 19th century, this elite promoted large-scale projects to modernise the Savoia’s Reign and keep up with the European industrial revolution.

The south, on the other hand, was divided between the Papal State and the Bourbon’s Reign. The economy in the south of Italy was based on agriculture, the government extremely centralised – landowners were mostly Spanish or northern Italian aristocrats who delegated the management of their land to so-called ‘Barons’, who then rented it out to farmers. The population was mostly illiterate, poor, traditionalist and lacked basic services, transports and means of communication.

Even after the unification, the ruling elite stayed in the north, and no effort was made – either by the government or by entrepreneurs – to promote business in the south.  That widened the development gap between the two ‘chunks’ of the country, but worse than that, it created a diehard diffidence in the south towards northern capitalists, who never intervened in the south’s interest. Furthermore, since the fields farmers worked on was not their property for a long time, there was no opportunity for most southerners to develop a true attachment and respect for the land, or for public and shared property.

Of course this is an oversimplified way to explain the current situation, but it can illustrate some of the endemic problem that prevents innovative businesses to develop successfully in the south of Italy. As to why the sharing economy seems to work – sort of – only in the north of Italy, it is easy to see how historical conditions of the market strongly influence today’s economic development. Traditionally liberal and pro-business, the north seems to be more open to innovative enterprises and shared services, an attitude that almost certainly has been key to the region’s comparative economic growth.

Beatrice Faleri is Associate Editor of Perspectives at King’s College London.