What exactly is the "Sharing Economy" these days? Sometimes it smells like something else

TreeHugger has been covering the sharing economy since before it got that name; Warren McLaren introduced the concept as Product Service Systems. In the decade since it has exploded.

I was thinking about the issue this past weekend when I used Uber for the first time to go to a wedding, and got into a fight with the groom over whether it is a good thing. I took the position that it was simply using technology to move from a hub-and-spoke model where a middleman controls access (and the drivers' income) to a peer-to-peer system where the driver can contract directly with the user.

He thought it was a return to "every man for himself", that only worked because it was new and there were not that many drivers yet, keeping prices high; that soon the lack of regulation would drive prices down so far that it would be slave wages. That it isn't sharing at all, just a different form of pay for service, but ultimately would end in abuse. That's why people got organized and formed unions. I asked the driver what he thought, and he told me that before Uber he sat around between scheduled rides at the company he drove for, and this way he makes a few extra bucks.


Also on the weekend, I saw a tweet from Christopher Mims, now of the Wall Street Journal, wondering about an app available in Baltimore called Haystack Mobile. It lets you tell other users that you are occupying a parking space; If they pay you three bucks you will wait until they get there and let them take it. (There is another version of this, Monkey Parking, in San Francisco and Rome). My first thought was about The High Cost of Free Parking, a great book by Donald Shoup showing that there is no such thing as free parking, just a huge public subsidy, as much as $374 billion in 2002.

So what these apps are doing is actually scalping, adding a fee on top of what is already bought and paid for by the taxpayers. The poor schlub who doesn't have the app is circling the block while the rich dude with a smart phone and a few extra bucks to spare gets to grab the public resource. And they have the nerve at the end of their video to call this green.

The case against sharing

© Susie Cagle

I was wondering how to put these thoughts together for discussion when I discovered Susie Cagle, who wrote (and illustrated) a fabulous article about it in Medium. She claims that the sharing economy is really a byproduct of the recession and the state of the job market today.

Across the U.S., high costs of living are driving more of the employed toward “side hustles,” i.e. unprotected freelance work, the kind fostered by the sharing economy.... The sharing economy’s success is inextricably tied to the economic recession, making new American poverty palatable. It’s disaster capitalism. “Sharing” companies are not embarrassed by this — it appears to be a point of pride.

She believes that it is benefiting a privileged few.

The sharing economy doesn’t build trust — it trades on cultural homogeneity and established social networks both online and in real life. Where it builds new connections, it often replicates old patterns of privileged access for some, and denial for others.

Uber was just valued at $17 billion; Airbnb is valued at $10 billion. I doubt they are sharing any of that with their drivers and homeowners anytime soon. Susie Cagle's case against sharing is an eye-opener that should make people think differently about what a sharing economy really is, and who really benefits from it.

See also her wonderful Imagine the Future of Sharing, full of great startup ideas.

Tags: Product Service Systems

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