Economic Growth

Long before the likes of Airbnb, Cuba was living the sharing economy

Men push a vintage car used as a taxi in Havana April 26, 2008. Cubans on both sides of the Florida Straits share a love for vintage American cars. In Miami, members of the Cuban community meet once a month to admire the old gas-guzzlers, while in the streets of Havana, 60,000 of those cars are a part of everyday city life

Image: REUTERS/Claudia Daut (CUBA)

April Rinne
Founder and Principal, April Worldwide
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Cuba is a country of contradictions: doctors who teach dance classes, engineers who drive taxis, and teachers who farm tobacco. Some of these contradictions make sense given the economic embargo which has forced Cuba — and many Cubans — to become incredibly resourceful to meet their daily needs. This superficial explanation belies deeper insights, however — insights that may apply, and help, many cities worldwide.

I visited Cuba this spring and experienced these contradictions first-hand. The primary purpose of my trip was to speak at Applied Brilliance, a multi-disciplinary conference whose theme of "Resilience & Revival” could not have been more timely. I was asked to explain the global sharing economy. Little did I know that the Cuban sharing economy would steal the show.

"The sharing economy is an integral part of normal life"

For context, I have visited almost 100 countries and worked in over 50. In recent years, I have advised governments ranging from Singapore to Sri Lanka, Canada to China on the opportunities and challenges that the sharing economy presents. Cuba is the first country I have ever encountered where the sharing economy is rooted, sanctioned and endorsed nationwide. The Cuban government encourages sharing and has developed rules to manage it. Residents don’t think of it as something “different" and, unlike many places, certainly not something to be feared. Rather, in Cuba the sharing economy is an integral part of normal everyday life. Put another way, it's already manifest in ways that other countries — rich and poor, capitalist and socialist, developed and emerging — are grappling to achieve.

Two easy examples illustrate Cuba’s approach to the sharing economy: accommodation and meals. For the past several decades — long before Airbnb, VRBO or Couchsurfing — Cuba has developed a nationwide system of casas particulares, or local homestays. Working alongside intermediary agencies that connect visitors and locals, travelers can stay in Cuban homes and Cubans can earn additional income.

Each casa particular is identified by a small white logo with a blue symbol on it, indicating that guests are welcome. Breakfast is almost always included, and hosts are immensely proud to share their favorite local spots (and often, their life histories) with you. Needless to say, as Cuba opens up these are the kinds of experiences that are unique, highly sought after, and not found in hotels. Meanwhile, a nationwide network of paladares connects diners with home-cooked meals in private homes, an arrangement markedly similar to new social eating platforms like Feastly, EatWith and VizEat.

The challenges ahead

Of course there are some challenges and potential risks to the Cuban model. For example, in places such as Viñales (a small agricultural about four hours west of Havana, that lies within a UNESCO World Heritage Site) every other home is a casa particular. The town has lost much of its authentic feel as the number of tourists increases dramatically. The country still lacks the widespread Internet connectivity that is necessary for peer-to-peer platforms to thrive, meaning that the role of broker-intermediary is likely to persist for some time. And of course, there is a very real risk that as the Cuban market opens up, there will be a push for more people to own cars which could disrupt the highly effective (and environmentally friendly) system of ride-sharing that currently exists. These challenges don’t undermine the power that the sharing economy represents. Rather, they underscore that as Cuba evolves, it too will have to tackle policy issues related to new business models, innovation and technology.

At the same time Cuba may also provide key insights for other places, particularly markets that lack abundant physical assets, such as many countries in Africa. As these markets grow, they should tap into the sharing economy as part of a smart growth strategy. Just as mobile banking leapfrogged traditional finance in many African markets, so too could new decentralized tech-enabled platforms to share a range of assets leapfrog traditional centralized corporations.

To complicate matters, consider what is happening in China. The Chinese government has declared the sharing economy to be a “national priority” and included it in the country’s next five-year plan. It believes that the sharing economy will drive 10% of China’s GDP by 2020. Given China’s emphasis on new economic paradigms and its presence in Africa, what might this mean for Africa’s growth?

Cuba has carved its own unique history for many decades, and it will continue to do so. Its ability to understand and harness the sharing economy — even before market capitalism — could prove to be a competitive advantage for the country. Governments, CEOs, entrepreneurs and community leaders worldwide should take note.

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