How sustainable are digital platforms?

Social networking, food shopping, flexible mobility – all these are possible on today’s digital platforms. But do these platforms contribute to sustainability and help to protect the environment? An ongoing Oeko-Institut project aims to answer that question. The researchers have now published preliminary findings for 15 digital platforms in food sales and a further 15 in mobility services.

Food: a new market with potential for sustainable business models

Currently, only around 1 per cent of people in Germany buy their food online. Since the outbreak of the coronavirus pandemic, however, the delivery services have struggled to keep up with customer demand. Experts now predict that this change in online food shopping behaviour could have a lasting impact. What opportunities does this create for people and the environment?

Digitalisation has produced very few highly innovative business models in food sales so far. Instead, online stores more or less directly replicate real-world models. Nevertheless, sustainable business models are on the rise. Some platforms aim to boost sales of local produce by offering farmers new outlets and a viable alternative to wholesale. Digitalisation facilitates cooperation among farmers at the regional level and, in particular, offers small farms access to a broader customer base. They can use this to counter the trend towards farm closures while contributing to regional value-added.

Alongside the promotion of local produce, various other factors were found to influence the sustainability of the platforms studied. A key factor is how the goods reach the customers and whether they are delivered in throwaway plastic bags or in reusable crates via a deposit scheme. Other aspects of key importance for the environment are whether misshapen vegetables, which would otherwise be destroyed, are accepted by consumers and whether the produce is sourced from organic farms.

Mobility: a rural-urban divide, environmental impacts unclear

The analysis of platforms in the mobility sector reveals a different picture: here, digitalisation can do much to support innovative and user-friendly concepts such as carsharing, shared mobility (combining various modes of transport), rideselling (i.e. paid-for rideshares that are arranged online), routefinding services and leasing platforms (e.g. for e-scooters). The first three of these mobility options are much more prevalent in cities than in suburban and rural areas. Furthermore, there are more commercial providers in contrast to rural schemes based on citizen and local engagement.

Do digital platforms genuinely reduce private mileage and encourage vehicle-sharing and public transport use? There are no definitive answers yet. However, according to the initial analysis, rural initiatives have the potential to generate a sustainable impact as they tend to complement the public transport offer and, unlike urban schemes, focus mainly on community interests rather than profit.

As its second key finding, the study showed that providers’ prospects of operating a viable business model vary, depending on local and regional conditions. Ridepooling is a good example. Here, providers in Germany are subject to the Passenger Transportation Act (Personen­beförderungsgesetz); in addition, local authorities can influence area coverage, the number of registered vehicles and permitted operating times. Alongside differences in demand between city centres and the urban periphery, these legal provisions are a key determinant of commercial success.

Which positive effects result from changes to supplier, user and local conditions, for example? How can online platforms contribute to a sustainable shift in mobility behaviour over the long term? These are some of the questions to be studied in depth as the project progresses.

Next step: case studies

As the next step, the Oeko-Institut’s experts will examine the positive and negative social, economic and environmental impacts of online platforms in the two sectors, i.e. food and mobility. This will involve the preparation of case studies, which will be undertaken by the Oeko-Institut in collaboration with the University of Stuttgart’s Institute of Human Factors and Technology Management (IAT) and the Fraunhofer Institute for Industrial Engineering (IAO). The project is funded by the German Federal Ministry of Education and Research (BMBF) and will run until the end of the year.

Oeko-Institut briefing note: Ernährung 4.0: Wie nachhaltig sind digitale Plattformen zum Erwerb von Lebensmitteln? [Nutrition 4.0: How sustainable are digital platforms for food shopping?]

Briefing note by the Oeko-Institut, the University of Stuttgart (IAT) and Fraunhofer IAO: Mobilität 4.0 – Digitale Plattformen als Beitrag zur nachhaltigen Verkehrswende in Stadt und Land? [Mobility 4.0: Digital platforms as a contribution to a sustainable transition to green mobility in urban and rural areas]