Grokking the Sharing Economy

The Sharing Economy is a wave of new businesses that use the Internet to match customers with service providers for real-world exchanges such as short-term apartment rentals, car rides, or household tasks. At the leading edge of this wave are Uber and Airbnb, each showing eye-popping growth to bolster their claim that they are disrupting traditional transit and tourism industries. These two are followed by a flock of other companies vying to join them at the top of the Sharing Economy world.

Supporters sometimes describe the Sharing Economy as a new type of business and sometimes as a social movement. It’s a familiar mix of commerce and cause in the digital world. Silicon Valley may have its share of the world’s richest people, but it has always seen itself and presented itself as being about more than money: it’s also about building a better future. The Internet is making the world better, not just by giving us better gadgets and more information, but by reshaping society, root and branch. We now have the technology to solve problems that have plagued humanity for centuries, making old institutions and old rules obsolete and replacing them with computation.

The Sharing Economy promises to help previously powerless individuals take more control of their lives by becoming “micro-entrepreneurs.” We can be self-directed, dipping in and out of this new flexible mode of work, setting up our own businesses on Sharing Economy web sites; we can become an Airbnb host, a driver for Lyft, a handyperson for Handy, or an altruistic investor making loans on Lending Club. The movement seems to threaten those who are already powerful, like big hotel chains, fast food chains, and banks. It’s an egalitarian vision built on peer-to-peer exchanges rather than hierarchical organizations, and it’s brought about by the Internet’s ability to bring people together: the Sharing Economy promises to “get Americans [and others] to trust each other.”

Unfortunately, something different and altogether darker is happening: the Sharing Economy is extending a harsh and deregulated free market into previously protected areas of our lives. The leading companies are now corporate juggernauts themselves, and are taking a more and more intrusive role in the exchanges they support to make their money and to maintain their brand. As the Sharing Economy grows, it is reshaping cities without regard to those things that make them livable. Rather than bringing a new openness and personal trust to our interactions, it is bringing a new form of surveillance where service workers must live in fear of being snitched on, and while the company CEOs talk benevolently of their communities of users, the reality has a harder edge of centralized control.

There is a contradiction built into the name “sharing economy.” We think of sharing as a non-commercial, person-to-person, social interaction. It suggests exchanges that do not involve money, or that are at least motivated by generosity, by a desire to give or to help. “Economy” suggests market transactions—the self-interested exchange of money for goods or services. There has been a lot of debate about whether “sharing economy” is the right name to use to describe this new wave of businesses, and a raft of other names have been tried out—collaborative consumption, the mesh economy, peer-to-peer platforms, the gig economy, concierge services, or, increasingly, the “on-demand economy.”

The normal way in which communities provide shared goods is through government, from municipal swimming pools and soccer fields to public transit to libraries and much more, but there are no government groups in the list. There is no representation among Peers partners from the world of food co-ops, worker co-ops, lending libraries, allotment groups, or other groups involved in non-digital community-sharing initiatives. Zipcar is included (shared access to a vehicle), but the Youth Hostel Association is not (shared access to accommodation). There are many organizations that seem to fit into the Sharing Economy mandate, taken literally, but that have no link to Peers, whether they be equipment rental shops, secondhand stores, boat rentals, or even the big car-rental companies.