The concept of sharing is simple. It’s something we all learn at a very young age when we’re playing in the sandbox with our friends. A friend asks to borrow the shovel you’re using and you are confronted with a choice: to keep it for yourself or hand it over. We soon learn that relinquishing control of that shovel for a few minutes can reap its own rewards. Among them, people think of you more favorably and are more open to helping when you ask if they can show you how to make that sand castle. This spirit of equitable exchange is carried on throughout our whole lives, increasing in complexity and social nuance as we grow older.
A new wave of people, products, and services are taking advantage of this way of thinking and constructing new ways for people to share. Some view it as a direct path to utopia while others view it as a way to market existing economic structures. In this post I hope to lay out the good, the bad, and the ugly of the sharing economy, ending with the suggestion that perhaps the sharing economy isn’t a utopia at all.
Why did we ever stop sharing?
It is probably safe to assume that sharing between humans has existed for as long as we have. It is hard to reference any point in history where evidence of how people have shared–or not shared–exists. From the elite travelers of ancient Greece to bartering on the frontiers of the Old West, sharing and the exchange of goods and services is nothing new. It is interesting to note, however, how the implications of sharing has changed over time as societies and new forms of economic behaviors are developed.
By looking at the past, we can begin to understand the ways that different economies have functioned. Native Americans, for example, operated a gift economy 1 where individuals were valued for what they gave rather than what they have. Many economies have been closely tied to sharing and bartering for goods. Limited resources lead people to find ways to share what they had. The late nineteenth century gave way to the industrial revolution, which completely changed the way we produced and consumed goods. No longer were we tied to the limited cottage industry 2 model, but we were able to produce cheap and readily available products. This free access to resources turned the sharers into capitalists that thrived off selling the necessity for everyone to have cars, large homes, and enough material goods to fill them. Sharing had effectively become obsolete.
How technology made us share again.
The development of personal electronic devices and the internet in the 1980s changed the way people share 3 yet again. Technology allowed us to record, distribute, and consume information more readily than ever before. By dramatically increasing the ability to access content and services at any time, people have started changing the way they behave and fundamentally interact with others. Never before have we had 50 opinions on that restaurant you just passed by, your sister’s feelings in 140 characters or less, and a doctor at our fingertips. With this ease of use and lack of physicality, society has opened up. We share information that is more personal and we share it more often; we use the internet to work through our problems with others rather than present them when we’re done considering.4 The internet has made sharing relevant again, albeit fundamentally different than it ever was before.
With this digital infrastructure in place (in the US anyway), new businesses have popped up to take advantage of the new behaviors that are second nature to digital natives.5 Our trust thresholds are lowered, and we are comfortable relying on a person’s digital identity when we engage with these new businesses. Linking our credit cards and Facebook profiles means anyone we interact with must be safe. We also crowdsource opinion and let online reviews of goods and services dictate our own decisions on matters that could effect our personal safety. By exploiting peoples’ newfound propensity to share, companies have created remunerative business models that negate the need for much of the physical and human infrastructure of many goods and services. Lyft is killing the taxi and Airbnb is making us wonder why we ever stayed in hotels. These new business have thus given birth to what is being called the sharing economy.
Our knowledge and stuff are now commodities.
As members of a capitalist, industrialized society, it is common for us to see someone go to the store, buy that incredibly innovative new kitchen appliance, use it for a week, and then let it gather dust on the shelf before it’s finally sent to take up space in a landfill. The 1:1 relationship we have to our products is not sustainable, and the internet’s presence has both supported and refuted this gain. Amazon makes it easy to have disposable goods sent to our homes,6 and Ebay takes the flea market/auction online, allowing people to buy and sell used goods from anywhere.
These companies aren’t changing economics, they simply apply the same commodity-centric ideals to the online space. The so-called new sharing economy, however, looks at goods and services as openly exchangeable between individuals. People have allowed themselves to trust strangers for the convenience and economic benefits of sharing. People can now make money off of their apartments or go out and give people a few rides in their car when they otherwise would have been sitting at home. They can log online and spend an hour learning something new from crowdsourced knowledge. The “recirculation of goods, increased utilization of durable assets, exchange of services, and sharing of productive assets”7 are all benefits reaped from participating in sharing services. And because they are being facilitated by businesses, your participation as contributor and consumer is the commodity being sold.
Sharing Economy 101.
Much of the criticism of the sharing economy is that its applications are broad and varied, leaving the entire sector to be very loosely defined. According to Juliet Schor, ventures must self-declare that they are part of the sharing economy to be categorized as such. Many feel that companies are using the emotional appeal of sharing to persuade people to use services that are only marginally different from their more traditional competitors. Everyone feels like they are contributing to a greater community effort and doing something environmentally sustainable.
There are two forms of sharing economy businesses: peer to peer (p2p) and business to peer (b2p). P2p businesses facilitate the exchange of goods and services between people—Airbnb and Task Rabbit are two examples. B2p businesses like Zipcar and New York’s Citibike program own products or services that can be shared amongst many users. Some sharing economy businesses are for profit and others are non profit, further adding to the complexity.
Can we share and be capitalists? Probably not.
Not all people buy the utopian ideal of sharing businesses. The digital taxi and ride-sharing company, Uber, has become the poster child for the opposition’s argument. To many, Uber has revolutionized the way we take short trips. They have been able to reduce the hassle of calling a car, giving directions, and paying the driver by leveraging the technology in our smartphones. They position themselves as an easier, more socially responsible way to drive. Their business practices, however, leave much to be desired.8 Uber has skirted around regulations to cut rates that undermine other taxi businesses, remove the need for regularly inspected vehicles, and avoid the need to pay taxes for running their services. Not to mention the allegations that Uber recruiters are poaching drivers and flooding the systems of their competitors with fake ride requests.
So is Uber an isolated case or is there actually a problem with the sharing economy itself? Unfortunately, there seems to be a common thread running through many sharing economy businesses. Other companies like Airbnb have also come under fire for taking actions to avoid or change regulations. Their opponents argue that their actions are unsafe to consumers, while the rebuttal is that these regulations are outdated and unnecessary. They focus on an open market, creating more opportunity for those willing to pay more, a contradiction to the open equitable sharing much of their marketing suggests. The libertarian tendencies9 do not stop there:
Uber’s philosophy, whether consciously expressed or not, is that life belongs to the highest bidder – and therefore, by implication, the highest bidder’s life has the greatest value. Society, on the other hand, may choose to believe that every life has equal value – or that lifesaving services should be available at affordable prices.9
Utopia or not?
Do we actually have a whole new economy centered on sharing or are technology companies using emotional marketing to convince us to use their services? Right now consumers seem to be buying into the idea that they can share with one another. The argument is further supported by nonprofit ventures like maker/hackerspaces, repair collectives, and tool libraries. They partake in all the ideals of the sharing economy without being driven by the vicious capitalist agendas. The problem is that these smaller more honest efforts will never have the opportunity to scale to mass effect. Does the utopian idea still exist even if the objective reality is not what consumers perceive? In the case of smaller efforts, is it still a utopia if the opportunity to make significant change isn’t there? The answer is complex and riddled with opinion. As with most future predictions, only time will tell where we end up.