The emergence of a highly flexible economic network known as the sharing economy have allowed people to share resources .i.e. services, equipment and skills with one another often at a significantly lower cost. Also called collaborative economy providing platform to participants to get away without investing on valuable items such as office space, house, and car while creating opportunities for others to extract value from underutilized possessions or talent.

Few Examples of Sharing Economy:

• Ride Sharing
• Crowd Funding
• Peer to Peer Landing
• House Lending Platforms
• Co-working
• Re-selling
• Talent Sharing

Pakistani Perspective:

The nucleus of sharing economy is data connectivity, specifically internet infrastructure and coverage which enables the economic environment to prosper and create platforms where the collaboration can take place. Pakistan saw belated arrival of 3G and 4G data service compare to our regional counterparts however both Telco’s and PTA have put enormous effort to widen the coverage. Due to these efforts as per PTA latest report the number of both 3G & 4G users have reached 40 million.

With the sizeable high speed data consumers at disposal, we saw several technology startups and few sharing economy proponents came to the shore. The most obvious example of sharing economy in Pakistan has been ride sharing. With launch of both Uber & Careem our Pakistani users have finally tasted the advantage sharing economy could bring about.

Challenges in Pakistan:

A third world country like ours possess more challenges compare to the western world where this business model was originally conceived. These challenges include infrastructural challenge, human resource challenge, legal challenge and more critically taxation challenges.

Infrastructural Challenges:

Pakistan is still lagging behind in tech infrastructural front, as stated above that high speed internet, cost effective data packages and educated population is a must. However, all these are only available in arge cities only and the 70% population which resides in semi urban and rural belt are still waiting for the above infrastructural development.

Human Resource Challenges:

It’s a no secret that in terms of skilled labor availability and over all literacy rate, we are probably at bottom. Similarly in order to actually utilize the potential of sharing economy we badly need quality human resource.

Legal Challenges:

One of the most key challenge is absence of any law or legal cover for sharing economy services. For example there is no law regarding crowd funding or peer to peer landing.

Taxation Challenge:

Currently there are no tax regulations available that covers services provided under sharing economy for sales tax or even income tax. The tax regulation authorities need to find appropriate answers and sit with stake holders to formulate ways for taking these business under tax net.

Although the challenges are real, but we believe that our policy makers are keeping close eyes on the technological development and working together with other stake holders to make Pakistan a viable region for sharing economy platforms.