Adapting to Innovation and Change  

– This article was originally published by Roopali Bista in the Himalayan Times on the January 13, 2019.

The world is moving at the speed of light when it comes to innovation and technological advancement. New business models such as sharing economy have seen rapid growth in the past decade. Sharing economy is an economic model often defined as a peer-to-peer based activity of acquiring, providing or sharing access to goods and services that are facilitated by a community based online platform.  Since the sharing economy took off in the mid-2000s with the uprising of eBay, it led to the strong foundation that would eventually shape the global economy and markets two decades later. From the inception till date sharing economy has penetrated various sectors such as transportation, property, fashion, education, and now consumer goods.

Traditional way of doing business has changed forever. This economy has changed the way that people give and receive services. Some critics have claimed that this new business model has caused traditional businesses to suffer over the years.

The sharing economy held much promise when it burst onto the scene in the not-too-distant past, opening up an avenue for people to earn an income by sharing their underused resources with others. Consumers, too, embraced it in a big way, hovering up goods and services in nearly every area imaginable like from point-to-point transport to accommodation and co-working spaces — typically at lower cost than the traditional businesses.

The rise of the shared economy has made many nations to formulate new laws and policies or amend the existing one in order to accommodate and adapt the innovation lead by the shared economy. Laws and policies have huge roles to play in shaping up a nation’s economy. Creating rigid laws and policies can hinder entrepreneurship and economic dynamism. The path to a more dynamic and growing economy lies in opening opportunities for entrepreneurs, especially to those who have long faced barriers to starting and growing their businesses.

We can see the recent case of companies like Tootle and Pathao which are ride sharing services operating in Nepal that have come up with tangible solutions to combat transportation problems in the country. They have been accused of not abiding by the law and deemed illegal based on the Motor Vehicles and Transport Management Act, 2049 (1993) that does not allow privately owned vehicles to be used in transportation service. This act was formulated at the time when these innovations were not even thought of. But now that these innovations are providing beneficial services, the laws need to be reconsidered and amended.

These companies have gained popularity in Nepal by providing on-demand, twenty-four-hour door to door service at cheaper rates unlike other modes of traditional transportation in the country. Users of Tootle and Pathao feel safer using their services as one can choose the gender of their rider that they want to commute with and the vehicle number plate of the drivers are displayed on the screen. The users can even share their ride information with other people. Consumers are also spared from hassling with the rude and overpriced taxi drivers. But mainly, these companies are generating employment for thousands of people in a relatively easy way.

Let us talk about invention of computer for example. When it was first discovered, it offered a revolutionary means to store and process data. It was a leap in innovative technology, solving a problem we didn’t even realize we had. Another great example would be the mobile internet service. Since it was first brought into the market in 1996, the mobile web has enabled people all over the world to exchange information and access resources on-the-go, resulting in the foundation of the smartphone industry. Had the laws and policies deemed them “illegal” we would not have these great innovations.

As Uber- an International ride sharing company, even Tootle and Pathao are such innovation that is solving the pre-existing problem of transportation such as crowded, untimely public vehicles and overpriced taxis by using Application Programming Interface (API). Like Uber, it can reform the public transportation industry and make commuting a breeze in Nepal. It can help thousands of people that are bike owners with a driver’s license with myriad employment opportunities and also provide an easy way to commute to thousands more.

These companies are solving the existing problem in the transport industry without any large investment and just by a simple intervention. They can be brought into the legal framework by formulating or amending laws and policies and by setting certain standards that the company needs to meet so that they can be easily regulated and also made safer for the consumers.