Will The Real Sharing Economy Please Stand Up
Posted on November 14, 2019
The sharing economy has gotten a bad rap lately due to companies like Uber and Airbnb branding themselves as businesses that are rooted in the principles of the sharing economy. This has given rise to a number of proposed alternatives like platform cooperativism and the ‘blockchain revolution’, both of which have spoken out against the sharing economy in an attempt to draw interest and funding to their own alternative economic models.
In the book Blockchain Revolution, while advocating for the adoption of blockchain systems for literally everything, Don and Alex Tapscott write, “Pundits often refer to Airbnb, Uber, lyft, taskrabbit, and others as platforms for the “sharing economy”. It’s a nice concept-that peers create and share in value. But these businesses have little to do with sharing. In fact-they are successful precisely because they do not share-they aggregate.”1 And in that, they hit the nail on the head. Uber, Airbnb, and companies like them do not reflect the true spirit of the sharing economy; they have simply appropriated it. April Rinne writes for the World Economic Forum, “As the sharing economy has grown, it has become a victim of its own success. Some people have charged that much of today’s sharing economy is not really “sharing”, an allegation that is partly right. While on the one hand, there are many platforms that espouse the true spirit of sharing – underutilised assets and building community – on the other hand, increasingly there is “sharewashing” going on: companies latching onto the term because it makes them part of a hot trend.”2 Share-washing their image is precisely what a number of popular start-ups have done, namely Uber, Airbnb, and Taskrabbit, along with many others.
Hold Up…Why Aren’t Uber and Airbnb Really Part of the Sharing Economy?
Glad you asked. For this, we must return to the definition of a sharing economy and consider what the true spirit of it is. The dictionary defines it as “an economic system in which assets or services are shared between private individuals”3. It can further be described as “a concept that highlights the ability — and perhaps the preference — of individuals to rent or borrow goods rather than buy and own them”4 and “an economic model often defined as a peer-to-peer (P2P) based activity of acquiring, providing or sharing access to goods and services that are facilitated by a community based model”5. Many people confuse the sharing economy with other popular alternative economic models like the gig economy, the collaborative economy, or the crowd economy. While some businesses can certainly fit into more than one of these categories at a time, this does not equate the sharing economy with these other models. Rinne notes, “An example of terminology confusion is Uber. Is it ridesharing when a driver leases out a car that they did not own before, in order to provide rides that they would not have taken otherwise? Hardly. Yet, to much of the public and media, Uber is one of the most touted examples of the sharing economy.”2 So, to sum it up, the sharing economy model is based on, you guessed it, sharing. This means that services or goods are temporarily accessed and then returned so that they can continue to be used by others. This doesn’t necessarily involve the exchange of money, and historically, probably didn’t.
Let’s make it real with a super quick example. Say you live in a neighborhood that’s super quaint and you know many of your neighbors. Since you only mow your lawn maybe once a month, wouldn’t it make more sense, fiscally speaking, to pool your money to buy one lawnmower and share it rather than everyone buying their own? That is the spirit of the sharing economy, in a nutshell, sharing assets equally between people. This doesn’t necessarily require ownership by any one person nor does it require profits to be made.
So, is blockchain the answer? Should we all support platform cooperatives instead? Tell me what to do!
Blockchain, as a technological concept, and platform cooperativism both have their benefits and practical uses in specific contexts. Blockchain can be defined as “a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network”6, while platform cooperativism involves worker-owned cooperatives that use some sort of digital platform to help them operate. Platform cooperativism is certainly a close relative of the sharing economy and could be a game changer in creating a more equitable economy. That being said, there are many alternative economic models out there that have a place in our society. All I’m saying is, don’t give up on the sharing economy because of a few bad apples.
Ok, but why are you pushing the sharing economy over all the other alternative economic models?
I think it’s important that we don’t lose sight of the true spirit of the sharing economy and that it continues to have a place in our communities. The sharing economy is one of very few, non-capital forms of economics still practiced in North America today and it promotes health and well-being through basic human interaction and caring for one another, things that many of our communities seem to have lost.
Let’s go back to the roots of the sharing economy. Dr Murat Uenlue writes, “Sharing, gift cultures and reciprocity are as old as human civilisations and possibly as old as human species – even without a smartphone!”7 In the good old days, or the days of your grandparents, or the days of your great-grandparents (depending on your age at this moment), people used to share things without any mention of financial compensation. I know, pretty crazy right? If a family member, friend, or neighbor was in need of something that you had, you would happily lend it to them. And I don’t mean lend as in how banks lend money and then charge a ton of interest to make it worth their while, I mean lend as in give to use temporarily out of love or kindness with no compensation other than love and kindness returned. Sounds a little too good to be true, right? Who are these hippies? Well, that’s the point. somewhere along the way many of our communities lost this ability to share. It happened sometime around the rise of consumerism as a symbol of wealth and rapid transportation and technology that allowed us to move far away from our family and avoid socializing with our neighbors at all costs. But recently there has been a resurgence in the concept. Dr Uenlue notes, “things have started changing dramatically. We have not become much more generous all of a sudden. But the number of opportunities to share has dramatically increased – thanks to the work of clever innovators. As was web 2.0, the sharing economy (call it 2.0) is an exciting rebirth of this socio-economic trend that plays an increasing role in people’s life.”1 The sharing economy is making a comeback and it’s important to remember the true spirit of it rather than focusing on the businesses that are appropriating it.
Examples are worth 1000 words
2019. Image. Accessed November 15. https://www.mentorpl.org/branches-and-hours/littlelibraries/.
A very clear example comes in the platform Peerby: “Probably the closest you can get to the original ideas of the sharing economy are platforms like Peerby. They allow to borrow/loan everyday items to people in your neighbourhood for free(!). There are no fees involved, neither to the platform nor between participants. With that, it is a trust-based system.”7 This system is simply what happened before technology, but now with the further reach of technology. There is no money involved, only generous people.
Ebay is an example of something often said to be from the beginning of the recent sharing economy fad, but this example is incorrect. Ebay is not a form of the sharing economy, it is simply a technological tool that allows people to sell their stuff to other people. There is no sharing involved, it is a transaction.
BlaBlaCar is an example of a ride-sharing service in the sharing economy. Here’s how it works: “The driver is travelling in the same direction as riders. Trips are announced with a few days notice so that riders can book a convenient ride. We can be certain that the trips are not for commercial reasons as there is no profit for the driver if you check fares. It reduces their fuel bill.”7 In this case, drivers are incentivized to share space in their car when they are already going somewhere in order to be economical by making a little gas money, but not to make a profit.
Uber, Airbnb, Lyft, these are all hugely popular services which are not really part of the sharing economy. Let’s take Uber, specifically, which is a privately owned platform that acts as a middleman which hires drivers through the gig economy (the gig economy is where people work random amounts and times according to their convenience rather than or in addition to having a “regular” job). Trebor Scholz, founder of the Platform Cooperativism Consortium writes that Uber and Airbnb “are logistics companies where all participants pay up the middleman: the financialization of the everyday 3.0.”8
Another good example of the modern sharing economy comes in the form of community gardens, where people share land to cultivate gardens and grow food. The land usually doesn’t cost the community members anything to use, it is shared with them by the land owners (often the city). These often have layers of more informal sharing economies within their structure as gardeners share seeds, tools, crops, or help each other take care of their plants.
Lastly, a classic example of the sharing economy is the Little Free Library movement that has sprouted up all over the United States. These tiny libraries are built and maintained by people in the neighborhood for free and community members can leave and take books at no charge. Initiatives have also spun off of this movement where people share toys, games, and more.
Darcy Keester. The Secret Share: A spin-off project inspired by little free libraries. 2019. Image.
It’s worth noting that there are many countries around the world that have thriving sharing economies but don’t feel the need to label them as such because sharing is just a natural and economical way of living. Unfortunately in the United States, our capitalistic system has turned the sharing economy into a buzzword that we use to create profits. This has left us with a life where we don’t know (or even want to know) our neighbors, let alone trust them enough to share our stuff with them.
-DK