Driven by success of bikes, sharing economy is witnessing a chaotic expansion

Updated 2017-07-26 10:15:27 Global Times
People learn how to use the shared compartment in Shanghai, east China, July 14, 2017. The shared compartment service appeared in some office buildings in Shanghai recently. People can enjoy a rest in the compartment by scanning the QR codes for payment. Disposable bedding is provided and the compartment will be disinfected automatically by ultraviolet light after use. (Xinhua/Du Xiaoyi)

People learn how to use the shared compartment in Shanghai, east China, July 14, 2017. The shared compartment service appeared in some office buildings in Shanghai recently. People can enjoy a rest in the compartment by scanning the QR codes for payment. Disposable bedding is provided and the compartment will be disinfected automatically by ultraviolet light after use. (Xinhua/Du Xiaoyi)

The recent shutdown of the shared sleeping capsules has raised questions about the sharing-economy, a business model that has been replicated across fields in China - cars, umbrellas, karaoke and now sleeping - after the success of shared bicycles.

By simply scanning a QR code, users can take a nap in a white-colored capsule.

Disposable beddings are available for hire. Air fan, reading lights and power port are installed inside the 2-meter-long, 1-meter-wide and 1-meter-height capsules. The service charges are 6 yuan per 30 minutes during regular hours and 10 yuan per 30 minutes during rush hours.

However, Beijing police said these capsules, which can be used by anyone without ID registration, are likely to become hiding places for criminals, and their small size also makes it difficult to ensure fire safety, the Xinhua News Agency reported.

Confusing categorization

Billed as sharing economy, the so-called sharing capsules are actually a traditional economic model of low-end services, which is widely seen in airports and other countries, Liang Haiming, chief economist of China Silk Road iValley Research Institute, a Guangzhou-based think tank, told the Global Times.

Capsule hotels are widely found in Japan.

"The term sharing economy has been abused for anything that is out there for renting, while the essence of the sharing economy is to create value by exchanging idle resources and benefit the wider public to build on an economic scale," Liang explained.

The popular Mobike and Ofo are good examples of sharing economy, he added. However, the shared capsules, which are mostly installed around business districts and Internet bars in Beijing, Shanghai and Chengdu, target white-collar workers who want to take naps in daytime.

Dai Jiangong, CEO of Beijing Xiangshui Technology, which is behind the shared sleeping pods, said the shutdown is temporary.

"Local authorities will allow us to make some adjustments and then reopen. For example, we will install a smoke detector in the capsule. We are also discussing changes to our business model," Dai was quoted by Xinhua as saying.

Beijing police said the capsules are venues offering resting places, so they need a hotel license, and a hotel needs to be equipped with firefighting equipment.

Dai rebuked that since the capsules are not open to the public at night, they should not be categorized as hotels, the Legal Daily reported.

Gray areas

Some sharing economy enterprises have been operating in gray areas due to an absence of laws and regulations, Liang said.

"The economic model has uncontrollable risks since it separates "ownership" from the "right of usage" and regulatory supervision is absent," he noted.

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