
Why The Sharing Economy Isn’t - rainysunday
http://tomslee.net/2013/08/why-the-sharing-economy-isnt.html
======
whytaka
This article really clears up for me the skepticism I felt about these new
companies. I've heard the term the Sharing economy before but I didn't know
these companies were trying to reappropriate the word. It takes quite a bit of
cognitive dissonance to be convinced that what you're doing is sharing even
when you're taking people's money.

Back when I was a teenager, I dreamt up that the women's rights movement was
ultimately a ploy by the capitalist class to dilute the value of labor in the
market. Technology has done the same with our time by making us surrender the
concept of off time. Now this sharing economy wants to take away our space and
stuff. We retreat a little to bide time but it's easy to permanently lose
ground.

~~~
king_jester
> Back when I was a teenager, I dreamt up that the women's rights movement was
> ultimately a ploy by the capitalist class to dilute the value of labor in
> the market.

This is most certainly a dream, because in reality women's rights and feminist
movements are in part about getting women actually paid for the labor they
perform.

~~~
Joeboy
> This is most certainly a dream, because in reality women's rights and
> feminist movements are in part about getting women actually paid for the
> labor they perform.

The idea that capitalism subverted feminism in the pursuit of cheap labour is
shared by some feminists, and isn't necessarily inherently antifeminist.

~~~
king_jester
I've not heard this before, from what I've seen and read feminism has been
partly about the exploitation of women's labor, an exploitation that has
occurred for a long, long time. That women's labor isn't paid for or is
underpaid is a long standing issue.

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dualogy
I remember when the web and later peer2peer was just taking off: "this is the
death of the middleman".

And here we are, as the "masses" joined in the fun, we're surrounded by not
just middle-men but huge middleman-concerns, walled gardens, "siren servers".

Turns out AoL and Yahoo had it about right, they were just 15 years too early
and a tad too innocuous ;D

(Only tangentially related but remember why Skype took off? It was (branded
as) "fully peer-to-peer". Freeing millions from the shackles of the telcos,
yay! Now flip it to eBay first, to MS next and here we are, the world's
biggest NSA backdoor and botnet. Neat!)

~~~
kogir
Skype took off because they were masters of evading firewalls and corporate
network blocks. People used it because it worked when nothing else would.

That it was P2P was always an implementation detail, not a selling point.

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Joeboy
Is this not a shameless land grab for the term "sharing economy"? I've always
associated the term with actual grassroots things like Freecycle, LETS systems
etc. Or maybe people have actually started to think AirBnB is part of the
"sharing economy" and I just missed it.

~~~
potatolicious
It absolutely is. Freecycle, Couchsurfing, etc.

Now you have Uber joining the fray as "ride-sharing". No, these are
_professionally licensed drivers_ cruising around town in _sleek, jet-black
towncars_. They are not "ride sharing" any more so than that restaurant is
"food sharing" to me.

~~~
theorique
Does anybody really think of Uber as "ride sharing"? I think of it as "app
that calls you a black car cheaper and faster than if you went through a car
service".

Some of these like Lyft or RelayRide are truly car sharing - peer to peer
facilitating hitchhiking by unlicensed "cab drivers" for tips.

But still, the "economy" part is more in evidence than the "sharing" part.
Obviously, people expect to be paid for doing services, even if it's an
informal and off-the-books part of their income.

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tvanantwerp
Maybe it's because I work for a nonprofit, but this piece seems like
speculation and paranoia. Oh, so this group Peers is actually funded by a
handful of wealthy patrons? Guess what--all nonprofits make 90%+ of their
revenues from the top 10% or less of donors. Some nonprofits only really have
ONE donor. That's just how the nonprofit sector works. All of it. By the
author's logic, the Red Cross is astroturf.

I think it's a fair point that these companies aren't building a sharing
economy. They're building companies that let people sell individual surplus of
capital or time or skills through a convenient platform. That might not be
sharing, but there's real economic value in that. They wouldn't be able to
take a cut from these small transactions unless they genuinely offered some
valuable service to the other parties. I just recently stayed in a wonderful
AirBNB apartment while on a trip, and I _know_ I wouldn't have managed that
without the AirBNB service, and I _know_ I would have paid more and gotten
less for a hotel.

The author assumes--wrongly, from my experience in public policy--that the
status quo organizations and regulations exist for the common good. Some do,
but many don't. Lots of bad laws and crooked organizations raise unjustifiable
barriers to entry--not just for Silicon Valley start-ups, but for the mom-and-
pop businesses too.

I can't say for sure whether Peers is good, bad, or neutral. I can say with
certainty that this article is heavily biased, ignorant of how most nonprofits
work, and ignorant of the public policy process.

~~~
Joeboy
> By the author's logic, the Red Cross is astroturf.

It would be like that if the Red Cross claimed to be a grassroots organisation
and engaged in advocacy for its funders. As far as I know neither of those
things are the case, and if they are I hope somebody will write critical blog
posts about it.

~~~
mikecane
If you speak to people who were involved in Occupy Sandy -- a real grass-roots
effort to relieve the aftermath of Superstorm Sandy -- they can tell you what
dealing with the Red Cross is really like. [typo edit]

------
jka
What would be ideal, I figure, would be if we could have the infrastructure to
enable a sharing economy, but without centralized gatekeepers taking a cut and
ultimately being a middle-man.

Until then, there is certainly disruption happening (hotel chains, taxi firms,
airport parking businesses are worried about all this), and that is a market
positive - but it's certainly not the all-round-benevolent model that the name
'sharing economy' would suggest. There are winners and all you have to do is
follow the money/data.

As a side-note, I think the kind of naming used for new technologies and
business models is increasingly manipulative - I certainly share a lot of the
author's skepticism, and agree that the mere name 'sharing economy' will
likely encourage people of genuine good intention to put their energy into it
without seeing the full picture.

~~~
Amadou
I remember when dis-intermediation was the big buzz-word. Nowadays it seems to
be all about business schemes with intermediaries at the core who make the
process less efficient than it has to be in order to extract profits for
themselves.

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octaveguin
All platforms can be thought of as positioning themselves for rent seeking -
that is app stores, linkedin, and yeah airbnb.

Things that require a network effect, after they get it, are in a super
leveraged position that they can cash in.

That said, the platforms that choose not to cash in on this tend to not be as
successful. Couchsurfing wasn't. Cash and the promise of cash for investors
allows a company to spend a great deal to market and secure with insurance
this sharing economy. These are important functions to make the public
understand and get used to this new weird future.

In the end, we need those rent-seeking-seeming fees to jumpstart this
whatever-you-want-to-call-it sharing economy. We don't get an airbnb without a
large commission on every renting agreement made.

I believe that once the public is comfortable with 'sharing economy' as an
integrated part of our lives, then the race to the bottom platforms might
start happening - when companies are competing on price and features. Of
course, those incumbents will fight tooth and nail to keep their monopolies
and may well succeed. We'll see.

Right now is the golden age for these types of companies.

~~~
Joeboy
> That said, the platforms that choose not to cash in on this tend to not be
> as successful. Couchsurfing wasn't.

By what metric? The people I know who use couchsurfing.org seem very
enthusiastic about it, which is obviously anecdotal but it's odd to be reading
that it's a failure.

~~~
meemoo
Probably total number of people sleeping at Couchsurfer vs AirBNB places per
night. In this sense, AirBNB is introducing more people to the concept.

I have used both, and AirBNB is much easier in cities, where Couchsurfing
hosts probably get way too many requests.

------
clicks
That is one interesting piece. I highly encourage reading it all, as well as
the articles linked within.

I had not been aware of this 'sharing movement', and how this perspective was
being force-fed by some SV folks. And now that I've found about it I find this
to be very off-putting, I was expecting better from SV.

The BI article on TaskRabbit ([http://www.businessinsider.com/confessions-of-
a-task-rabbit-...](http://www.businessinsider.com/confessions-of-a-task-
rabbit-2011-12)) I think nicely outlines the problems with this wave of
'sharing' startups:

    
    
        The whole thing about TaskRabbit, again it's "neighbors 
        helping neighbors," as if my health and safety don't 
        matter, as if I'm willing to put up with whatever you 
        dish out no matter what.  And it's required that 
        TaskRabbits always have a smile on their faces.  You 
        know what, I'm not going to smile at you while you lie. 
        It's a health factor, it's a safety risk.  I don't want 
        to get covered in cat shit and if I do, I should know 
        about it and get paid for it. 
    
        There really is an element of disregard for the 
        Rabbits. Then the email I got from TaskRabbit about 
        being unprofessional — my answer to that is, if you 
        actively suppress what you actually foster, it is 
        abuse. Then people will figure out that they can lie 
        and manipulate the TaskRabbits to get what they want. 
    
        BI: Do TaskRabbits ever meet?
    
        Not so much.  I've met a couple of them because either 
        I've posted tasks myself or I was assigned a task that 
        involved another TaskRabbit.  That's part of the 
        strategy of TaskRabbit — to keep us apart from one 
        another.  We can't message each other on the website. 
        The only way you get to meet another TaskRabbit is if 
        you post a task, and I think they do this to keep us 
        apart because they don't want us fixing the process. 
        They don't want us unionizing.  They don't want us to 
        get together and say an Ikea run is $50 minimum. 
    
        If it's a $25 job, how much will TaskRabbit take?
    
        Here's how it works.  I wish I had access to their back 
        end numbers.  Certainly a task that costs, let's say, 
        $30 or more, the markup is actually about 70%.  At a 
        lower price point the markup is smaller and it could be 
        as low as 15%.  For example, if I bid $20 on a grocery 
        run, the poster will probably pay a price of $23.  So 
        that is fair.
    
        But as the price goes up, so does the cut.  And I know 
        once you hit about $30 for the task, the markup is 70%.
    

Craigslist is more of a 'sharing economy' company than this -- it gives you
the option to directly interact with people about jobs... and products... and
apartments.. and so much more... _for free_. The rent-seeking-type sharing
economy startups of [http://peers.org](http://peers.org) are simply VC-funded,
sophisticated, money-making schemes. At the end of the day, money is less
fairly distributed in society because of these "sharing" startups, and I think
the fact that they seemingly deny this is particularly shameful.

~~~
wes-exp
Be careful about making the flawed assumption that economics is a zero-sum
game. That if craigslist earned money, it must somehow be stealing it.

Actually, the opposite is true. I think craigslist is so focused on being
barebones and profit-free that it actually is doing a disservice to the
economy. It took a lot of pressure for Craigslist to add a basic feature, maps
integration, and it only did so recently. If craigslist wanted to really
contribute to society, it should try earning a bit more money and using it to
hire people to make the service better for end-users. Everyone wins.

Middle-men are not necessarily evil just because they earn a profit. A
genuinely useful middle-man can benefit both himself as well as the other
parties in the transaction. Again, don't fall into the trap of zero-sum
thinking.

~~~
awakeasleep
Craigslist is an enormous benefit to people in general. The economy is only
valuable in its benefits to people.

If any other business can figure out a way to provide a better value service,
they're free to start at any time.

Man, saying craigslist does a disservice to the economy sure rankles. I feel
like a similar argument might be that peace does a disservice to the economy,
too. And imagine what a lack of disease would do to the healthcare economy.

~~~
wes-exp
Sorry if I was being unclear. I wasn't trying to say craigslist does a
disservice to the economy in general; it's clearly beneficial and I don't want
to diminish that. Rather, I think that its _attitude_ of being barebones and
avoiding profit is doing a disservice, by holding it back from becoming a
better, more useful service.

~~~
jiggy2011
If that was the case , one would expect a for profit craigslist to have
dominated by now.

~~~
Natsu
Two-sided marketplaces are notoriously difficult to get going. Craigslist
benefits extensively from network effects, and they're good.

You can't beat them by being just a little bit better.

------
wycx
The internet makes rent-seeking massively scalable.

------
ThomPete
So great piece with a lot of valid criticism but I also feels like it keeps
judging the speech on a claim it doesn't continue to make.

The author continues judging the speech as a claim to counter capitalism when
in fact the speaker comes clean early on. This is unfortunate because it
muddles the argument.

The way I understand the argument its more that instead of companies making
money on individuals its individuals making money on each other. It's removing
the middle man so to speak.

For instance when he write

"The laws that he is talking about are licensing laws and other laws put in
place to protect employees, customers, and neighbourhoods. These laws are not
all perfect. But the sharing economy has nothing to replace them beyond
magical thinking about “trust” (with little accountability)."

He is basically cherry picking. There is also quite a few laws that are
actually hindering progress.

Technology does move faster than legislation.

~~~
jarofgreen
> There is also quite a few laws that are actually hindering progress.

Definitely. I think this is one of those areas where the right way lies
somewhere in the middle between the two extreme positions. Yes there are a lot
of shit laws - but there are also a lot of great laws enacted for citizen
protection and we should be careful this joyful wave of "disruption" does not
throw the baby out with the bath water.

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loudin
The 'sharing economy' described in the article is not so much about sharing as
it is about making money. You don't share your apartment on AirBnb - you sell
it.

~~~
rmk2
I believe that is _exactly_ what he said:

> "The sharing economy is not an alternative to capitalism, it’s the ultimate
> end point of capitalism in which we are all reduced to temporary labourers
> and expected to smile about it because we are interested in the experience
> not the money."

The term "sharing economy" is an oxymoron as it stands, firmly rooted in the
Smithean notion of a greater good being advanced through individual and
ultimately selfish actions. Either somebody shares, or somebody sells, but you
cannot have both. The dichotomy of sharing and selling is essentially that
between (pre-capitalist?) trade (quid pro quo) and sale, where the first one
is based on utility value while the later is based on abstract commodity
value.

------
johnrob
At some point, society needs to digest this 'sharing economy' and understand
its pros/cons. On one hand, it provides a way to make money. On the other
hand, the laborers are often putting themselves in situations where legally
they should be covered with various forms of insurance as well as wage
regulations (paying them as 'consultants' is the current method by which all
of this is sidestepped).

