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The sharing economy was always a scam (onezero.medium.com)
168 points by mathattack 16 days ago | hide | past | web | favorite | 158 comments

Articles like this ignore the impact on individuals. For every group that is trying to full time Uber/Lyft or turn an AirBNB into a hotel, there's also tons of people who are doing in the spare time to make some extra or work the better allocation of resources into something beneficial for them.

See threads like: https://twitter.com/RantyAmyCurtis/status/110272136190510694...

That's what sharing is about, more optimal allocation/usage. It's not an end-all solution to everything, it's a supplement. There will be people who make their entire go at it, and there will be everything in between.

The importance is that you let people decide whether to participate in it or not. They're the ones with which the decision of whether it is a scam or not ultimately matters.

Trying to paint the entire phenomenon as either a total failure or the end-all panacea is dumb. It's a much welcome addition to the broader economy by millions of people.

There's a lot that I agree with in your post and in that thread, but this in particular I take issue with:

> One poinI have no idea what orifice @AOC pulled the$3.37 number from, but it’s wrong at best or intentionally deceptive at worst. I never made less than $10/hour and usually made $15-$45 an hour. And this was BEFORE Uber allowed tipping via the app.

This woman is clearly not taking her expenses into account when calculating her income, and there lies the rub - in one way Uber is taking advantage of people's poor ability to do math. If you are a short/part-time driver, the increased depreciation and maintenance costs are probably not that visible to you, but for folks who drive more regularly they absolutely need to be factored in to your income calculations.

A good treatment of the topic: https://www.ridester.com/uber-lyft-driver-costs-and-expenses...

It was a study that was retracted: https://qz.com/1222744/mits-uber-study-couldnt-possibly-have...

She probably never heard about the retraction, it got a lot less press than the original study

AOC's tweet about Uber was posted a year ago. Before the study was retracted.

Sounds like a good opportunity to retract the tweet too, then

> taking advantage of people's poor ability to do math

Are you sure you're not being patronizing there? i.e. underestimating people's ability to choose what works for them? I talk to most Uber/Lyft drivers I ride with, every one of them has said they're happy with it, and most have given specific reasons why.

I don't think its patronising, some (many?) people just aren't good at maths.

I know a couple of intelligent people that have a real blind spot when it comes to dealing with figures. So this isn't a 'stupid people' thing.

Have you never had a conversation with someone about their new car/phone. They say it's cheap because it only costs them X per month. You ask them what the total cost is, and they have no idea? Because I seem to have that kind of conversation with a wide variety of people.

It's not about choosing what works for them, its about making sure that choice is informed. If you're earning $10/hr great, if you spend $5 of that on other costs, you should really be deciding if $5/hr is worth it.

Sure, but why assume that Uber and Lyft drivers all fall into that category? That's what seems patronizing to me. They'd have to be dumb to take that gig for very long if it wasn't economic for them, and many of the ones I've talked to have stuck with it for a long time now. To me it seems disrespectful to assume that they don't know their own interests, and it fits with a meme of poorer people being dumber, which I dislike.

This is why Uber (no idea about Lyft) faces huge employee turnover. That one is in the stats. About 96% quit after a few months. (Less than half a year.) People get smarter once they get hit with a fat payment (repair for example, a crash, uninsured liability) and cannot keep up on the meager pay. They net a loss and often a big one.

Yes, the company is taking advantage of this. Welcome to capitalism. A sucker is born every second.

Personally I don't read the parents comment as referring to all Uber drivers, but that's just me.

"it fits with a meme of poorer people being dumber "

I agree that that's the meme, the parent doesn't actually refer to Uber driver's wealth, rich or poor.

I'm guessing theres an unspoken assumption that Uber drivers are poorer, because it isn't that well paid? People don't seem to be giving up careers to do it.

Also the meme might be "poor people are forced into exploitative situations". Nobody would assume that a fast food clerk, for example, is dumb enough to consider the job good.


Maybe not, but please don't post unsubstantive comments here.


None of what you said implies they have ever done any sort of calculation of their maintenance costs and profitability.

They could have reasons (or just stated reasons) beyond considering raw profitability.

reading that post from that woman literally triggered me. mom of 3 shouldn't be spending most of her time in nurse school and then driving for uber WHAT THE HELL?

Well, if you were better at math, you wouldn't give your free time to post content on HN, would you ?

As soon as you talk about future costs, different people have different believes and different bets, because they have different risk profiles

Edit : why is my comment flagged?

I think you make a good point, but got flagged for snark. It's not a totally bad thing that people try to enforce politeness here.

I understand, I read my comment again a few hours later and it could be misinterpreted. Or maybe the parent edited the original message (can't remember)

I wanted to point the fact that the argument "exploiting people who are bad at math" is not a strong argument, given we are all exploited at some point because we aren't "math machine". Miscalculation can happen to anyone who is human.

Allowing people to participate in activities is useful, but that assumes that they are well-informed and rational. People also willingly participate in multi-level marketing; that doesn’t mean it’s good for them and society to do so.

MLMs makes participants scam other people, so IMO they should be burned to the ground.

As for "sharing economy" & drugs and - banning them outright may not be a good idea, but it sure would be best if working for Uber came with Surgeon's General warning.

So if I don't scam people, do MLMs whip me or something? How do they 'make' me?

You do not get contracts, referrals, benefits, other cult business.

And people will also abuse drugs if decriminalized; it doesn't mean prohibition of even such inherently dangerous activities is making things better

There’s a middle ground, and it’s called regulation. Of course, the ridesharing companies will holler and cry uncle about even the most basic regulations (see: Austin and fingerprinting.)

New York recently made moves to, among other things, establish a floor wage for rideshare drivers similar to how there is a minimum wage for tipped workers.

How about letting people opt out?

Ban things that we have good reasons to believe are harmful for people (or sign them up by default for things we believe are beneficial for them), but allow people to opt out by submitting some document that basically says "I know what I am doing is likely bad for me but I accept the risks"?

This way you both protect people from their own irrationality and maximize liberty.

What is the value of informed consent from an irrational or desperate person?

The vast majority of people do not read lengthy forms; GDPR updated notification requirements to reflect that. Restricting irrational behavior to limit damage to society is not new; that’s why we regulate things like usurious payday loans.

One person being irrational is not dangerous, but many people being irrational is. The Great Depression started from the fallout of everyday people mortgaging their house and their car because the stock market was advertised as guranteed returns.

I think that twitter story is an example of the financially precarious position many workers are in. It only supports the idea that our economy is fundamentally unfair to working people. How is it acceptable that a mother of three going to nursing school has to support herself and her family through contributions from friends and family, multiple part time jobs, and driving for Uber? Going to school and raising a family is a full time commitment in itself.

Incoming Unpopular opinion.

I had a somewhat similar discussion, and it turns out many people from different origins and Culture think differently. And hence why politics are complicated. In America that would be considered as hard working American. Some are proud ( until the hard cold market reality got in to their end I suppose ) and they don't even think there is anything wrong with it. In Europe, that would be considered as Market and Companies taking unfair advantage over its citizen on labours. And should be condemned as evil and greed. Then this often leads to discussion of US with little regulation, and comparatively EU with many regulations.

The hardest problem to solve are problem that many don't seen it as a problem. In the case most Uber drivers in US don't seems to be having an issues with Uber.

I agree. If Uber drivers view themselves as individuals acting rationally to maximize their material conditions in an environment they can't alter, then why would they have issues with Uber? If driving for Uber wasn't a net positive over not driving for Uber, they wouldn't be Uber drivers. But they can and should alter the economic environment they exist in, through politics and labor organizing. The median cut Uber takes from drivers is 40%. This is before accounting for vehicle fuel, insurance, and maintenance. Presumably some percentage of the cut is necessary to develop and maintain the application infrastructure, but clearly not that much. I imagine most Americans would be furious if the government instituted a 40% flat tax on their income, but within the individualist mindset it is seen as inevitable and they accept it.

You can choose to not participate in Uber's system.

You can not choose to not pay tax. Well, you can choose that but you will go to jail and be potentially sodomised.

I think the metaphor about taxes was more distracting than illuminating of my point.

The main point was that we shouldn't be celebrating that a mother of 3, going to school, and working multiple part time jobs is able to supplement their income by driving for Uber but instead be asking why is their income so low in the first place that they have to spend their nights and weekends driving in order to afford groceries. This was all in that original linked tweet. I'm sure they would rather be resting, interacting with their children, or studying for school. We can take a step back and recognize that this is a globally suboptimal outcome. At some point the "freedom to earn supplemental income" promised by the gig economy becomes "an obligation to overwork oneself in order to afford groceries." How can this person "choose to not participate in Uber's system", when they've calculated that being an Uber driver is the only way for them to afford groceries for their family?

It is not a globally suboptimal outcome. She chose to have 3 children without a strong financial foundation. This is why she has no money.

Groceries don't fall from the sky. Somebody has to make them. So the option here is to either take from people to give to people who choose to irresponsibly have children, or don't.

If you chose the latter, then the optimal reproductive strategy would be to breed as much as possible and have other people take care of your children. That is not a 'globally optimal outcome'

exactly. I had the same thoughts... and she thinks that is okay or even she thinks this is great for her.

It is acceptable because the woman chose to be a mother of three. She chose to do it without financial stability.

If you jump into a river, other people should not be liable to bail you out if the water is faster than you thought (or never thought).

What about those of us who do not wish to take in any of this and still pay the consequences?

In Madrid rent is up a staggering 17% YoY, mostly due to AirBnB. That affects anyone looking for an apartment and I’m sure if renters were to pick between having AirBnB available for their travels - which is eye-wateringly expensive anyway! - or cheaper rent, they will invariably pick the latter.

Madrid, like Barcelona, has rising rent prices but blaiming them on AirBnB like some politicians have is very disingenuous.

AirBnB and similar players have a small percentage of the rent stock. They can only shift prices on the margin.

If you want the real culprits, Spain has a broken rental law that increases risks both for renters and lenders, and both cities have strict construction limiting codes (i.e. almost fixed supply).

This 100%. In addition, if you want to look into new factors, the huge amounts of foreign investments that came into Madrid have been dedicated to normal rentals, or to hoarding empty flats; not to short term rentals.

Foreign or national, the fact is that Spain suffered a housing bubble and it’s burst, but all of the legal and political conditions that gave rise to the bubble are still there.

Add the negative interest rates of the BCE, and you have found a nice way to make a killing...

Technology is… disruptive. Not to be cliche. I don't think that "mostly due to AirBnB" is likely fair.

AirBNB is around at the same time that the economies of scale has strongly tilted in favor of cities, who have restricted housing supply for years. In other words, clustering of specialties. Tech in SF, finance in NYC/London etc where the runaway effect is like businesses clustering b/c of talent, and talent flooding to the place, and the cycle continues.

They make an easy scapegoat for politicians other bad policies because timing goes along, but the rent is likely due to broader population crunch that other cities (including Boston where I live) are facing.

That is not to say we don't need to ever craft policy, maybe some kind of restriction on rental terms makes sense. Boston just made it tougher to do short term rentals -- but at the end of the day the real problem is that Boston restricted housing supply for years with bad zoning and burdensome regulation. Now a new technology hit that democratized what people can do with their property, and it's causing some friction, but I don't think it's fair to point all the blame there.

For instance, in Boston AirBNB is < 3% of stock last I checked… which probably has an impact when supply is so constrained but it should have never gotten to this point to begin with.

We need to fix supply problems, not ban a new technology that clearly resonates with consumers around the globe.

Some party will always be at loss and market will decide which one.

Just stop traveling to Madrid after all not everyone is entitled to invade life of locals and make their place crowded.

You are not entitled to live in a particular city at a particular price.

If a property owner can make 17% more, why should they make 17% less so YOU are more convenieced?

Well, it's not hard to imagine a future in which a majority of labor is "just in time" and people all have 6 different part-time gigs going concurrently, taking whichever job notification pops up next on their phone.

Optimal for profit margins for a single company, but at what cost to society as a whole?

what about a quality of those services? a full time driver drives much better than someone who does 4 different gigs part time

this would only work for unskilled workers.

although being a doctor, you only work when there are patients. so that's JIT too i guess.

> That's what sharing is about, more optimal allocation/usage. It's not an end-all solution to everything, it's a supplement.

Do you think that drives down the wages of the people who need to do it as their main source of income?

Well, that's what basic economic theory would predict, so I'd argue you'd need to have a pretty robust and demonstrated reason to conclude that it wouldn't. You've first got the general increasing in the supply of labour, but then you've got a secondary effect considering the lowering of barriers to people who consider car ownership a sunk cost and not connected directly and solely to using the vehicle for income-production introducing a very low marginal rate for some of that supply...

The problem is, in its current state, it creates monopolies which undercut the non-gig versions of those jobs, eventually blotting them out. And then the people doing them are left doing the same thing, generally for less pay, with little stability and no benefits (thank you, American health care system).

I tend to favor the perspective that the problem isn't tech but venture capitalists, and more directly the government that refuses to (or is too slow to) regulate all of this. It's the same old tricks people have been trying for 200 years of industry; anticompetitiveness, taking advantage of desperate labor, etc. The difference is that right now:

1) The markets can move (and even be created from scratch) so fast as to evade regulatory updates

2) They can dress it all up in flowery utopian language

That's a dangerous combination.

I have nearly everyone in that Twitter thread blocked and labeled as political propaganda trolls. I suggest you be more critical of your information sources.

All those individuals are doing is picking up jobs without job protections. Further, they are taking on a lot of costs that taxi services would do in the past, that further erode the actual money they are making.

It’s not a sharing economy. It’s a temp economy. And highly underpaid and unprotected temp economy.

If anyone is interested further, this is a great EconTalk on sharing: http://www.econtalk.org/michael-munger-on-sharing-transactio...

TL,DR: Why do we all buy an electric drill to put up 4 screws in 30 seconds? Sharing/renting can be much more productive than everyone buying things themselves.

Speaking as a professional engine mechanic for a chain of Midwest shops, you have no idea how big a ripoff uber and lyft are until you're in the shop.

The rates you make do not cover fleet style usage of your personal vehicle. Cabbies love the crown Vic because its intercooler let's it idle for hours on end with no worries. And they love the Prius because the idle uses no fuel. But your car? Get ready for more oil changes and brake jobs, and a lot more air filter and steering fluid changes as you go around the blocks. The worst I'd charged shop rate was for a Toyota Camry that had $2500 in service because the uber guy was trying to make it last between paychecks that weren't being paid by uber. A month later in august he lost the transmission at 65000 miles because he never idled in neutral.

Does one need to idle in neural even on automatic gear cars?

In many, if not all automatic transmissions the pump does not circulate transmission fluid when in Park, even though the torque converter is generating heat. It's very possible to overheat a transmission in Park.

He was probably slipping the clutch.

I think you'll find it's been years if not decades since there was a Camry available with a manual transmission

And that would just wear a bearing/spring system or the clutch, which are all repairs that are far cheaper than the cost of an automatic transmission replacement.

But idling an automatic shouldn’t be a problem. It’s a fluid turbine.

Well, that's why tons of Uber drivers use Priuses. It can work out for some people. You don't see them in your shop because it is working for them.

Another instance of survivorship bias with an interestingly backwards definition of “survivor” in this scenario.

>lots the transmission at 65000 miles

That's insane... What's better for wear on the engine, turning it off then on or idling in neutral?

Well for the engine, of course idling

If that's true for newer cars then how come they turn off the engine at the stop lights to save fuel?

Corporate average fuel economy regulations [1] set targets for the average fuel efficiency of all the vehicles a manufacturer sells. Since SUVs are popular and higher margin, car companies often have to do tricks like the auto-off engines to offset poor fuel economies in more profitable segments. Manufacturers that want to go over the limits have to pay a penalty or buy credits from their competitors who go under the limit.

Cars with auto-off also have newer technology made specifically to handle the extra stress like self-lubricating bearings and starters rated for >500k starts.

[1] https://en.wikipedia.org/wiki/Corporate_average_fuel_economy

Does that make a meaningful mileage difference or is it just a marketing trick because it’s so obvious to the user when the engine shuts off that “it must be saving fuel”.

During a normal 15 minute drive, the engine auto shutdown shaves maybe 20 seconds of runtime for me (smaller city without long lights) and it’s at the lowest engine consumption level (idle).

Given that an engine can idle for approx an hour on a gallon, I fail to see how an idle-off makes any meaningful difference for the average driver. It reeks of a marketing scam.

Read the person you are replying to. It doesn't matter if it is useless in real world. What matters is if it beats the tests created by govt bureaucrats.

>stop/start is estimated to boost fuel economy by 4 to 5 percent using the EPA test cycle


It's not useless: a reduction in 4-5% of emissions in urban stop and go traffic would be huge for air quality and health. It likely won't do much if anything for total CO2 output but offloading the emissions to manufacturing of parts needed for extra maintenance (aka a far more efficient power plant in a less densely populated area) instead of driving can still be a net win.

Regardless, fuel efficiency standards have driven a significant amount of innovation even if this specific rule seems absurd from the outside.

Tests vs real world...

They should only do that after they have reached operational temperature. Turning off the engine while it's still cold (i.e. below operational temperature) wears a lot on it. This is why diesel is a bad choice, if your regular trips are short.

Because it saves fuel/emissions?

Idle stop always makes me wince. :S

No intercooler on a crown vic unless you've turbocharged it. They are reliable because they are simple.

That could just be a translation or terminology issue. I've seen folks substitute "intercooler" for radiator, transmission cooler, oil cooler, etc.

My guess here is oil cooler.

meanwhile the guy who's perfectly fine driving for uber is eating cheetos at time and you will never meet him.

it's like being a doctor and complaining that everybody is sick.

The claim was never that "‘Sharing’ was supposed to save us" nor any of the other allegations in the article. In fact there never was any unified claims.

Of course the individual companies made claims about how their platform would save you a bit of time and money and friction. And that has largely been true. Millions of people each saves a little time and money, and that in aggregate has benefited us tremendously.

The sharing economy never promised the moon.

Who is "us"? Maybe upper middle class consumers, but not the workers at these companies.

Maybe upper middle class consumers, but not the workers at these companies.

That is not at all clear: https://www.restaurantbusinessonline.com/workforce/uber-comp.... It turns out that flexible hours are a large benefit for many people.

If those providing services through platforms such as Uber or airbnb didn't benefitted from them then they'd be doing something else instead.

Furthermore, of detractors actually cared about "the workers" then they'd be worried about how they have no better options instead of attacking the best options they have.

And no, banning Uber or airbnb does not make the workers' lives any better. It just an option off the table, and to some it's the best option they have.

There are choices other than unemployment and shitty gig jobs -- stable, well-paying employment with benefits. Whether these jobs exist or not isn't because of some abstract economic theory: they have to be fought for and won through political struggle (ie unions & strikes). The gig economy disempowers workers and makes solidarity among workers more difficult, because workers may not have a single employer, and are easily replaceable.

I'm not saying we should ban these companies, I'm saying their workers should be paid much more than they currently are.

> There are choices other than unemployment and shitty gig jobs -- stable, well-paying employment with benefits.

There really isn't. Everyone looks after their best interests, and those working for companies such as Uber are already choosing the best option that's available to them.

Zero people have passed on well-paying jobs with benefits to pursue a career delivering food through Uber eats.

Making vacuous statements regarding the myriad of better options the gig economy workers forego to pursue the siren song of delivering pizzas makes as much sense as depicting winning the lottery as a valid alternative to working a day job, and it's an insult to those who want to make a living but have limited options.

People choose to deliver pizzas for a living because it's the best option available to them, and complaining that they should instead just get a stable well-paying job with benefits makes as much sense as complaining that starving people should eat cake instead.

you seem to think that jobs just exist, and pay a certain wage, and that wage is fixed and this is the law of the universe.

political struggle (higher minimum wage, stronger regulations, unions, etc) drives wages up.

In a world where, as I’ve argued, average is over — the skills required for any good job keep rising — a lot of people who might not be able to acquire those skills can still earn a good living now by building their own branded reputations, whether it is to rent their kids’ rooms, their cars or their power tools.

-- Thomas Friedman, The New York Times, July 21, 2013


HN: https://news.ycombinator.com/item?id=6076875

Well, that's Friedman. If ever there were an exception to prove the rule.

I'm all but positive there are more. That turned up just looking through older "sharing economy" posts in HN. And a single instance suffices to disprove the claim made.

Though it's somewhat heartening to see that the skepticism was dialed way up from the start, for the most part, among commenters.

The title seems totally unsupported by the article to me. A less misleading one might be "The 'sharing economy' has evolved into a collection of large, unregulated, rental businesses"

The sharing economy was always fron day 1 about rentals. That's the central premise.

What's deviating from the original concept is that barriers to entry are restricting supply to the point that providing a service becomes too profitable and actually pays off to provide it full time.

Consider Uber. The principle behind ride sharing is quite simple: if you're already driving somewhere you can help someone out by sharing your ride with someone who wants to go where you're going. Cars are already clogging the roads while operating at 1/5 of their capacity. So, why not give someone a ride and be rewarded for your efford? Except that regulation bars individuals from doing just thay, and thus so-called rideshare companies are actually taxi companies.

>The sharing economy was always fron day 1 about rentals. That's the central premise.

If I may, the central premise is about being middle-man in a (renting) transaction, shaving off a fee from it for the service of establishing a contact between the two parties and - optionally - provide ancillary services (again at a cost for either party involved in the transaction).

You've just defined a business transaction. Being paid for providing a service is not the central premise, and completely misses the whole point.

The central premise of sharing economy is that people have access to resources, whether they are goods or services, that are underused or even wasted, resulting in an unnecessarily high level of economic inefficiency. Thus if a system is set to encourage those who have the resources to make them available to potential clients for a fee then everyone involved wins. A key concept is to set a centealized service which handles the hard part of a business such as transactions, business models, and disputes.

Well, that is exactly what the "businesses" revolving around it are doing.

Offering in your words a "centralized service which handles the hard part of a business such as transactions, business models, and disputes" cutting a fee from the value of the transaction.

The point of disagreement between our opinions only revolves around that service(s) being the "hard part" of the business and about the actual amount of the fees involved for these services.

Anyway a line needs to be drawn between an actual "sharing car" approach, as an example we have here blablacar where someone already has to go from A to B and offers a ride to recover some costs and something like Uber and Lyft, here the driver is going from A to B only because the customer(s) needs to go from A to B.

Sure - I still think the title is misleading. "Was always a scam" implies that everyone in the sharing economy has been lying for decades in order to make money. I don't see any evidence presented in the article that supports that implication.

And when looking at it through a reasonable lens as you do in your comment, I also don't understand the urge to treat it as though "sharing economy" companies are somehow evil or deceptive. They're just responding to market conditions in a way that (at least in the short term) produces value for both drivers and riders. There are other arguments you can make about whether this is bad in the long term due to e.g. dynamics around regulation, but that's an argument about how things will play out in the future, not about past or current bad faith on the part of Uber or AirBnb.

Sharing economy has existed well before technology and will outlast Uber and others. When you ask friends to drop you at airport that is sharing. When your aunt babyseats for you that is sharing economy. Potluck is sharing economy.

Economic efficiency through sharing is a great thing for society, it is just that it is hard to get it right at scale but nevertheless we are trying and we will test success sooner or later in some areas.

Doing favours for friends is very tax efficient. You basically pay no tax when you give or receive a favour. And let's face it, even though sometimes you might pay a friend to babysit or whatever it is cash in hand and no tax.

But the sharing economy requires you to pay from your after tax salary to someone else, who then pays tax on that before they get their pay. On top of that the rent seeker (uber, etc.) has to take their slice. So it's a low paid marginal business once you are being paid.

Yeah absolutely. That is why I do not know how to make it scale. In India often we let the uber driver cancel the ride after sitting in the taxi and pay him in cash thus he makes lot more money.

I think a networked society is colliding with a hierarchical government and the result is confusion.

> When you ask friends to drop you at airport that is sharing.

And your friend didn't need a professional insurance for his car for that. The difference is scale. Giving a lift from time to time to friends is very different from doing it full time while pretending you are not a taxi.

The main driving principle of the sharing economy is actually the ability to give a lift from time to time without any bother. The problem is that a number of factors do prevent supply from entering the market, thus the revenue available to established players is high enough to validate working full time.

> The main driving principle of the sharing economy is actually the ability to give a lift from time to time without any bother.

Except for people driving for Uber full-time. The whole "grass root sharing economy" Uber style is a masquerade.

Some people work for Uber full-time because regulation restricts supply, thus providing the service becomes too profitable and generates enough income to make a living working full time.

I also have a hard time trying to see the point of this sort of argument. Are taxi services suddenly bad, and driving a taxi for a living something to frown upon?

> Are taxi services suddenly bad, and driving a taxi for a living something to frown upon?

Nowhere did he say or even suggest that.

You are making a deliberately uncharitable interpretation of his post in order to weaken the point he was making.

All this does though, is weaken yours.

I think the sharing economy works well, but I also agree with the article. I just don’t think AirBNB, Uber and the others are the sharing economy. They are platform economies where the platform wins and it’s workers are at a race for the bottom on minimal pay and no rights.

We have a Danish app for taking people with you when you travel between towns. This is an aspect where public transportation unfortunately sucks after decades of conservatives in government, but it’s also an area where there is no taxa service or Uber styles thing because it’s too expensive.

But sharing the gas price with strangers when you’re going anyway absolutely works.

There is a platform for it, but their primary source of income comes from their leasing services. I’d say that is an example of the sharing economy, because it’s actually people sharing and not just some no-workers-rights shithole.

Your examples are sharing, but not "the sharing economy", because there isn't a third party managing the economic aspect.

I dont think you are correct..

If a grocer sells you groceries.. that is part of an "economy" and there is no third party

In that case the third party is the banking system.

but banking is involved when i pay for my car costs to give a free ride to aunty may and then the bank is involved when she pays for her vet bill for her chooks when she gives me "free" eggs in payment for the car ride

I'm currently traveling through the UK.

I went from Hamburg to London via Antwerp by blablacar.

I so far stayed at two places through couchsurfing.

and I'm now heading towards my third Airbnb place.

sharing economy is certainly not a scam.

Well, duh. Wasn't that obvious around the time Uber started?


“There was a moment of novelty but then a realization that these were the same things. Just much cheaper and unregulated.”

Imo this has been obvious all along.

Maybe "sharing" is not the correct term. The value proposition has evolved into a Subscription Economy with Asset-Light lifestyles.

>Sharing economy

Back in the day we called it sharecropping and we knew it was bad.

I wouldn't say it was a scam. I mean, at the end of the day, these 'sharing economy' services are basically platforms with a middleman taking a cut, and were originally meant for people to use as a hobby more than anything else. You might occasionally drive for Uber for a bit of spare cash, or lease out a room on Airbnb because you weren't using it right now.

In that scenario, it's fine. It doesn't provide a living wage, but really, it wasn't meant to replace your full time income.

But the thing is, where a market and platform exists, that's where you see a creeping level of 'professionalism' among participants, and eventually, the people doing it for fun do getting crowded out by people doing it for a living.

Yet the model doesn't work for that. What's sustainable for legions of people doing things in their spare time/using their spare resources is not sustainable as a full time replacement for hotels or taxis or what not. The problem is that the gig economy is just that; about gigs, not full time work.

And to some degree, you can see this trend everywhere. YouTube was at one point meant as a place to post amateur videos; now nearly everyone sees it as a full time job. Medium was a place for amateur writers, now it's see as a market for selling articles. Even game mods, an area which used to be 100% free now has a growing percentage of devs trying to treat it as a full time career.

Hence the problems with the sharing economy (and arguably platforms as a whole) are really two fold:

1. What works as a hobby/extra way to make money on the side doesn't really scale well to a full time career, but more and more people seem to expect the latter. It's like trying to use a paper round (or a ton of them) to pay the mortgage.

2. The existing markets/businesses these platforms target become unprofitable due to the huge increase in competition and lower number of regulations.

But that's not really a scam. It's just technology and society unlocking a lot more supply in these areas than there was before, and the existing businesses in the market suffering because of it. You don't even a platform for that, the internet has basically destroyed journalism as a viable career in much the same way as Uber has taxis.

On another note, the article also seems to conflate two different things; platform/gig economy services and subscription services. Something like Amazon Prime Video isn't that. It's another example of how companies seem to be trying to kill off private property with the endless subscription, and a whole 'nother kettle of fish in itself.

In a shocking, totally unexpected twist, company owners and marketing professionals exaggerated the value of their products.

Most of these sharing startups have just been flops. They promised to "disrupt X", and then no one used them, or they were too expensive, and they vanished.

Indeed it is. I've posted and talked about this along with posting Richard D Wolff's video "Uber is an old scam"


We've seen this before, at the beginning of a new industry. And once capitalism sets in, everyone is dragged down to a race to the bottom... Along with safety and human treatment.

And then once the abuses are rampant, people demand change in the way of regulation. And it works. Until prices then rise, and people are angry about the high prices of thing (Taxis).

And then, an upstart doing "app hailing" starts this all over again, with no quality, no assurances, no regulation, and sub-minimum wage payments, with no work protections.

Soon enough, the laws will finally roll in again as they did when Taxis were first made.

> Until prices then rise

Which they didn't do entirely through the invisible hand. In many areas, taxi regulation was also used limit competition (e.g. medallion systems, unnecessarily difficult licensing exams). In addition to higher prices it permitted lower quality service. If you want to prevent destructive wildfires, you need to do forest management to reduce the fuel that builds up. The taxi industry was a forest full of dry, dead wood ready to burn.


It's easy to be cavalier if you ignore the effect on Taxi workers. Ride sharing replaced a stable, unionized, middle class career with low-paying, low-benefit gig jobs. It ruined people's lives and destroyed a stable field of work. This wasn't a technological innovation -- it was a legal one, where they figured out a way to evade regulations to undercut the current system and drive down wages.

It ruined people's lives and destroyed a stable field of work.

Telephone operators and travel agents used to have stable careers.

This wasn't a technological innovation

If the technology is so insignificant, why didn't taxi companies develop ride-hailing apps? Either it's actually complex, or they decided they had no need to improve service because of their oligopoly.

  Telephone operators and travel agents used to have stable careers.
So you are for the indiscriminate ruining of lives because of technological innovation? Why can't any of these innovators work with encumbents to ensure happiness for all and not just enriching themselves?

Why can't any of these incumbents work with innovators to ensure happiness for all and not just enriching themselves?

I don't know if you've ever been to a medallion auction but they went for over a million dollars each in Manhattan before Uber came along. Most of the medallions were bought up by holding companies that then leased them out to drivers who paid up front and had to hope they made enough money that day to cover the fee. In San Francisco, I remember a driver told me that his up front fee was $100-200 per 8 hour shift depending on the season - that's over $100-200k per year ROI and SF's medallions were a fraction of the price of NYC.

I seriously doubt many lives were ruined by the fall in value of taxi medallions. Very few are owned by actual drivers and that's where all the money is.

Its not comparable as Uber is running at a loss underwritten by certain Arab interests so the traditional Taxi service system cannot compete


> If you want to prevent destructive wildfires, you need to do forest management to reduce the fuel that builds up. The taxi industry was a forest full of dry, dead wood ready to burn.

Wrong. If you want to prevent destructive wildfires, you have to let the forest burn regularly, preferably in a controlled manner. If you just do forest management to reduce the amount of fuel that builds up, all you accomplish is setting up the stage for a massive, all consuming fire that, once started, burns up everything. Example: California.

People forget that sharing economy always existed in some form

You ask your friend to drop you off at the work or your sister to babysit your son, it's all sharing.

I can argue such kind of sharing (without cash) puts other people at disadvantages who don't have friends or family maybe due to some disability.

Now even those people can hail a ride on Uber.

What's wrong with it? I don't need to maintain a list of friends which worsens my anexeity/depression, I simply pay and I am happy.

I can see why people who have social circle to maintain such favours will not like this because now a lonely soul can get same level of service from others around him.

If you do not like the sharing economy, then do not participate in it. "Other people should not be doing this, and should not be doing that, ..." is one bridge too far. For heaven's sake, who the hell are you, to tell other people what to do?

When someone decides to turn their apartment until a hotel room, it affects all of their neighbours. They can't then decide not to participate in the sharing economy, it is thrust upon them unwillingly.

Then those people should amend HOA rules or move to some other place where they can sign a contract of no AirBnB. If the AirBnB hosts causes an actual loss make him pay for it.

At any rate the armchair philosophers should not advice others on what should be allowed or not.

How is complaining about a neighbor being an "armchair philosopher"? I hope the irony of your statement is not lost in you.

Apartment complexes don't have HOAs and sometimes it can be a huge hassle to contact your landlord to fix the sink, much less to investigate and shut down your neighbor's illegal Airbnb operation.

That’s up to neighborhood associations and their contractual arrangements.

The obvious solution here is to then share your apartment and go live in your nicer house.

Participation will become non-optional. When one company, or tycoon, or whatever, owns everything, renting will no longer be optional.

It's not hard to imagine a world in which most software is SaaS.

It's also not hard to imagine a world in which the car company decides to stop selling and start renting.

Arcade game manufacturers realized early on that it's stupid to sell a machine that makes $30K for $2.5K, so they started opening arcades. Nolan Bushnell went and made Chuck E. Cheese, and Taito was doing the same thing. Sega does it in Japan still.

I know a guy who lives on a yacht with his family, he finances trips via the dozen or so rental houses he owns. The people renting from him may never buy a house, given that building new ones here is becoming hardly possible due to zoning.

So yeah, good luck opting out when nothing is for sale anymore.

Well, no, the sky is not falling.

Some people need a world in which they have exactly one employer, as well as a fixed bi-weekly salary, dropped into their bank account, because that is how they want to live. Good for them!

I like to scavenge my surroundings for opportunities, and make money from stuff that occasionally happens to drop from a tree. Once in a while, I meet people who like to do a deal with me. I sell. I buy. I trade. I just love it. I am simply NOT interested in a boring world of bi-weekly wages paid into a bank account.

I do not consider tycoons to be a threat. It is the little, petty SJW bureaucrats that take too much of an interest in other people's business who are the problem.

>The people renting from him may never buy a house, given that building new ones here is becoming hardly possible due to zoning

You nailed the problem, actually. Stop giving authoritarians too much power to tell us what economic activity we can do. Stop the endless mess of subsidies which make honest business unprofitavle. Your argument supports the person you disagreed with.

Well it must be represented by one simple thing: rental yields. What is the rental yield for a typical property in your place? If it's going way up, you can easily afford buying instead of renting so you don't have that problem (at a rental yield of about 6% or so, a mortgage becomes smaller than the rent). If it's going way low, it's a stupid idea to buy and owning will probably never pay for itself and lose money long term. I know a lot of places where rental yield is under 2%. Why would anyone buy there? (explanation is usually: to park dirty money).

And it's not due to zoning. Zoning exists so that load of excess people does not make a neighborhood unlivable, or there will be too much traffic and getting to and from job becomes impossible.

Wanna fight it? Push employers to let people work remotely. It's not possible for low paying jobs e.g. waiters, but these don't buy or rent anything anyway, for most professions where people have a shot of getting into a real estate market, there is such option. Let people work remotely and suddenly you'll realize there is a shitload of almost free real estate around.

Well, that assumes someone wants to sell a house, or that you're allowed to build a new one. Neither of those may be the case.

Or that you can afford to save for a down payment on top of current rent and other living expenses.

Well there's always someone wanting. There is always a real estate market, always. In absolutely all places you can buy or rent. If people find ways to make living in a particular place less important (say by enabling remote work), things will become easier.

Also well, the very small fraction of homeowners who have a privilege of owning these places have effectively won a lottery. They naturally have to protect their winnings. Basically for every one of them there is a 1000 or more of people who own place out of a highly sought-after area like the Valley where his real estate does not appreciate and brings no rent. If you take the averages, all-accounted yields from real estate are laughable and way under the yields from a stock market.

Can we say that someone who bought stock that skyrocketed 1000x, 20 years ago, has to be penalized for it, or be forced to sell? It is either a very smart insight (or inside, but in case of stock it's way way way more probable than in case of real estate), or just blind luck. It doesn't mean same trick is reproducible at any given moment if you have money to buy, the mathematical expectation of profit you will make buying anywhere you could pick at all, is quite low and you better go to a stock market.

For heaven's sake, who the hell are you, to tell other people what to do?

I'm a voting tax-payer: thats how government of the people, by the people works. We pay the taxes so that our representatives stop this kind of "shitting in the commons" nonsense. The ubers and airbnb are avoiding paying community costs, avoiding compliance with safety laws, avoiding all kinds of things, while simultaneously exporting the profit into other peoples hands, by giving some to individuals at a cost to everyone else in the peaceful enjoyment of their own property.

Telling people what to do is what government is all about.

"Other people must to do this. Other people must do that." Forcing other people is a form of spam, which naturally leads to anti-spam measures. Your form of spam will work until it doesn't anymore. Seriously, I do not care about your voting circus. There will always come a point at which you will have to prove that you are willing to risk your life and die for what you believe in.

Here's the thing. Economic transactions can have externalities -- costs to someone not a party to the transaction that are not reflected in the cost of the good or service in the transaction. The "sharing economy" has loads of externalities. It's like saying, if you don't like the bonfire, don't participate to it, when you've set the fire downwind of someone and there's smoke blowing in their tent.


Ignoring the terrible taste of your argument for the sake of keeping it civil...

Do you really think that everyone should simply bend to the externalities that you generate?

You really think that you could drop toxic waste on a river that goes through your property and no one can complain when the river dies because you are more important that the victims of your externalities?

Because it is a terrible argument that does not seem to have any basis on how the real world operates.

That's not an externality. And honestly, your chosen example is rather unpleasant.

An externality is something like "cigarettes produce smoke that contains a lot of carcinogens, and therefore cigarette smoking can contribute to the poor health of people who are nearby even if they do not choose to smoke themselves."

Every industry has externalities, both positive and negative. Your comment is basically vacuous.

Yes, every industry has externalities. They exist. They're basic Econ 101 stuff. Which is why it's overly simplistic to say "nobody else should interfere in a transaction between two people." There's externalities, there's market failure, there's the tragedy of the commons. A belief in markets ought to be paired with an understanding of them.

Yes, so why not do something about the negative ones?

Yeah, how dare we insist that people be paid a living wage! And health insurance is only for employees, not employees-in-everything-but-name!

I am free to make the deals that I want, regardless of what they include or don't include. Why would I need you to protect me from myself? Why do you want to micromanage other people's lives? Is your own life not interesting enough already?

Because the price you offer for your time influences the perception of the value of time for everyone around you.

Its why minimum wage exists at all. Without it, the most desperate depress wages to the absolute edge of starvation and destitution. It is not, and has never been, and never will be an answer to poverty, but it is a promise by the government that your time can never be valued at less than an absolute floor they set.

Because nature and reality are cruel. For many people, in many circumstances, their time is practically worthless. Minimum wage has a carrying effect on the economic baseline - by having minimum wage workers, there exists industry to meet their extraordinarily limited means. Its the old Ford adage that he need pay his workers enough to afford his cars lest he have no market to sell to.

This matters to state level actors the same way opiates in the US matter. If isolated, rare, instances of irrationality reign and someone ends up dead from a drug overdose that is a manageable risk for the freedom granted in return. But when millions are addicted, tens of thousands are dead, and whole communities are collapsing from it the individual choices that led people to drug addiction are a consequence to the whole of society.

It doesn't even need be in that large a scale. If your brother is a drunk he will by nature he less productive and stable in his life, more prone to disease and illness, and often fall upon his family for support because he cannot support himself due to his own choices. You can then of course choose to not help him, but for those that do their now deflated resources from supporting their drunk brother depress their participation in markets they would have had more voice in. It takes only one bad apple to ruin a family, a bushel to destroy a community, and an orchard can ravage whole counties.

Its why anyone contemplating suicide is told its a selfish way out. Because you make the choice, but everyone else gets to deal with the consequences. Almost nothing you do is wholly restricted to yourself alone - everything has consequences, and society at all is built on a foundation of trading personal liberty for freedom from others liberties.

Why cant we just give everyone a social dividend and then be done with it?

We already create enough in taxation and economic deadloss in market inefficiencies to finance nearly 10k/year to every citizen.

The why right now, at least in the US, is that federal politicians are beholden the monied interests that lobby and fund their reelection campaigns, not to the constituents. So policy is written in their interests, which doesn't require a social dividend because all involved parties are already wealthy.

Even if you solved the money in politics problem (which is hard) you still have the issue of a substantial portion of the US congress being elected in uncontested lifelong seats where the citizens have been thoroughly indoctrinated enough into either major parties ideology that they never consider voting for anyone but their incumbent. As long as politicians can feel their seat is guaranteed representing their own interests rather than those of their electors becomes the norm.

So to even begin having a conversation about social dividends you need to radically revamp American elections to incentivize the legislature to represent their constituents. Which requires competitive, representative elections (which means you cannot be using first past the post everywhere) and substantially diluted power and influence so that buying influence over the legislature is less trivial (which almost always means substantially more seats in US congress to make buying a majority of seats more difficult).

Which is by nature a constitutional amendment, which the congress itself would never ratify because it would end their gravy train of private influence and wealth so many currently enjoy. So you need it to come from the states, but the state governments are often just as corrupt and out of the control of the citizenry, if not moreso for their lack of publicity and presence in conversation, so you would need to figure out how to fix them first.

Its a crazy massive expansive problem Larry Lessig was campaigning on in 2016, and Andrew Yang could learn a thing or two from before having pie in the sky conceptions of being able to institute UBI given the structure of the present US federal government.

The thirteenth amendment exists for a reason, and as a "neo-Kantian," you should be into treating rational/human beings as ends in themselves. A country where you're allowed to sell yourself into slavery or indenture is one I can't support. So there are limits on what "deals" you can make.

Because your life impacts mine.


Virtually everything you do impacts people around you. So can you be more specific?

> Yeah, how dare we insist that people be paid a living wage! And health insurance is only for employees, not employees-in-everything-but-name!

You're doing no such thing. You're actually preaching that people with less opportunities than you should be left with even less options because your paternalist view of them makes you feel you're entitled to tell others how they can and cannot do to earn a living.

You can land a job as an employee with no fixed hours, no manager, where you bring your own equipment, etc? Seems closer to contractors.

I think it would have been smart if Uber let drivers set their own prices, then they'd be more akin to Amazon sellers, who feel more independent (but get screwed in other ways).

Where all the money goes to Uber, and is then distributed to the drivers? Where drivers are forbidden from subcontracting? Where drivers are forbidden from establishing regular routes for repeat customers? Those sound more like employees than contractors.

Visa or paypal isn't suddenly everyone's employer just because they process payments, and at least in some jurisdictions drivers can and do subcontract. In fact, there are licensed car rental companies that also provide services through Uber.

See, I have a problem with this line of thought. You are not an employee of these companies if you can sign up through an app, choose how much or little you want to work, and have no boss. If you want the living wage, health insurance, and employee perks then apply for an actual job and go through the full interview process like the rest of us. This mentality of “I want everything you have but I don’t want to actually put the time and effort in to get it” is very frustrating.

> This mentality of “I want everything you have but I don’t want to actually put the time and effort in to get it” is very frustrating.

How do you know that these people haven't already put time and effort into trying to get an "actual job"? It would seem to me that the free market does not serve everyone with equal economic opportunity and that the world economy is more nuanced than what your average libertarian would like you to believe.

We’re at historically low levels of unemployment. There’s work out there if you want it. Sure, based on your skills and experience, you may not find a job which supports the lifestyle you want or the rent where you want to live, but then you reset your expectations and move to a place with a lower COL.

You're right, but even that is more nuanced; for instance, the US unemployment rate is based on a survey that counts any paid work during the survey week as employment.

I'm not in the US myself, but I think for the HN crowd in general moving to someplace else isn't a problem as we have the financial means as well as the independence. Other social groups might be more dependent on the social support around them (family, friends and maybe government). For them, moving to another place would be akin to resetting everything and starting a new life, with all the associated risk.

You’re right that moving to a new location isn’t as trivial as my post would suggest, especially if you’re relying on your family for childcare. But it is still an option that people have been forced to consider throughout history.

> "Other people should not be doing this, and should not be doing that, ..." is one bridge too far.

Wait til you hear about criminal law!

It's not that simple and I think that should be abundantly clear. People buying up properties and renting them on Airbnb has wider impact than only to the people that choose to actively participate or don't. And it affects not only the units in that specific building, but the community and property surrounding it.

More cars on the road, encouraged by the incentives of Uber/Lyft, affect pollution, road congestion, and public health.

Aren't you telling him what to do?

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