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The sharing economy has succeeded because the real economy has been struggling (nymag.com)
88 points by richsinn on April 26, 2014 | hide | past | favorite | 57 comments

Actual headline of the article: "The Sharing Economy Isn’t About Trust, It’s About Desperation"

Many of the commenters seem to be arguing with the HN title, without having actually read the article. (As usual, of course). But in this case it wasn't even the article's own title.

Yes, the sharing economy is 'part of the real economy', as another commenter said. It's just a part based on desperation and precarity.

Another essay from my local paper in Baltimore: "The Desperate Hustle as a Way of Life" http://blogs.citypaper.com/index.php/the-news-hole/desperate...

Baltimore certainly didn't need Uber to have gypsy cabs when I lived there:) I'd see people putting down their arms when they noticed a real cab approaching, lest they accidentally hail one.

That fact supports the article though; Baltimore is a sad, sad place. Everyone is very nice there, though. One of the nicest towns I've ever lived in. I never really heard about any gypsy cab related crime when I lived there, either. People become more trusting by necessity when they're desperate, but they also seem to become more trustworthy for mutual benefit.

The first time I got off of the Greyhound in Baltimore, the woman who picked me up hailed a gypsy cab for us to ride to her apartment in. It was a first for me.

Yeah, they call gypsy cabs 'hacks' here. There's plenty of hack related crime, but it's mostly passengers robbing drivers.

So, yeah, see, that's fucked up thing -- Uber and Lyft are in bmore too, although in a legal 'grey area' -- wait, 'grey area', how come the hacks are just plain illegal and they are a 'grey area'? How come there is significant support for legalizing uber and lyft, but not hacks? Put a white guy getting rich at the top, and it's different now?

The title was linkbaity, so (in accordance with the HN guidelines) we replaced it with a sentence from the article that better represents its claim.

Long term I see the "sharing economy" being driven by resource scarcity (i.e. it's not practical for every human on earth to have a car), but I totally agree that right now it's often driven by job scarcity.

In my limited experiences with AirBnB people on the supply side either approach "sharing" as a fun hobby (e.g. "stay in our cute guest house!"), or they are truly trying to make ends meet.

True story: I AirBnB'd once and the guy rented out his own bed to us, and slept on the couch (and his girlfriend stayed over! on the couch!). Another roommate was AirBnB'ing a room in the same house, too. I think they were both trying to pay their rent share via AirBnB. Nice guys - we felt welcome and had a good time - but money was not "secondary" to them.

"I think they were both trying to pay their rent share via AirBnB" ... "but money was not 'secondary' to them" - conjecture. Counter example: If I can rent my room out once a week for $50, consistently for 10 years, and invest that money at 10% (any typical Australian bluechip stock) represents a $44,383 gain over ten years. Why am I not doing this? (edit for clarity)

The sharing economy is part of the real economy. The economy is us.

Exactly, when faceless Hertz or Avis step up to help me out with a temporary car rental, or Home Depot rents me a power washer, it's a good old corporate economy.

When some dude rents out his car, and another one rents out his power washer, I'm part of this crazy innovative sharing economy.

Well, there is a big difference there, namely that the second guy owns the car primary for his own needs and is simply monetizing the time when he wouldn't be using it himself. That's the idea of the sharing economy, although people use the same services to do more traditional business (buying apartments specifically to rent on AirBnb, etc.).

Companies do this all the time. Non name brand products are often produced in the same factory's as name brand products. The US power grid is far more stable because companies sell off spare capacity and cellphone companies will often use other networks to avoid dropping a call.

"The economy" is the part of us that uses money. If you have children, you'll exchange much value with them in a non-monetary way - indeed, a way which money doesn't help.

Money is what we use when more personal exchange fails.

If anything, the "sharing" economy is about substituting other information flows for things we'd have used money for <x> years earlier.

Puts me to mind of legendary hobo symbols written in chalk...


If you measure the economy in purely financial terms, such that it looks bigger when you spend more time in the office and less time with the love of your life, you're doing it wrong.

Granted, that's really hard to measure, so lots of big measures (e.g. the GDP) exclude that. It's a well-known limitation of the measure. But any Introduction-to-Economics course you might have taken in your life should have exposed you the notion of utility - the measure not only of bare usefulness but all the goodness and happiness and hope and love and joy of the human experience, the ultimate goal of all human economic activity.

They should have also described "economics" as the study of how people make decisions about what to do with their limited resources - including one of the most-finite resources, our Time here on this world.

Actual money-related matters are just sub-fields of economic study, and if you look at monetary phenomena (like exchange rates and inflation and such) and hope to understand them, you will do so using the underlying actual goods and services and human interactions that comprise the actual economy.

I believe I covered most of your complaint with the "if you have children..." part. I personally spent more time at the office at times so their Mom could be a full time Mom. Then at other times, I didn't.

I don't think economics has any hope of covering anything like joy. Microeconomics can show little sociological vignettes of the ... "Freakonomics" variety.

Utility is a roughly ... shadow variable which is inferred to explain certain things. There's no real agreement on whether or not it's even ordinal. Econ is fascinating, but it's a crippled discipline relative to many other more liberal arts and even sociology proper.

But back to "the sharing economy" - how is this not substituting electronic means to replace (roughly) telephone-based systems like hotels/motels or taxi service?

My personal heresy is that monetary policy has been abused ( towards deflation ) , and that this is what is driving this substitution. In the US, there's been a 2% growth target and we've failed to meet even that.


Nobody seems to actually understand inflation.

You're confusing economic activity with monetary exchange. Economic activity is about exchanging value (of goods or services), money is just the easiest way to track it.

First, there's a fundamental difference between monetary and non-monetary exchange. This is, I believe, related to the idea of "revealed preferences" - that people spend differently than they say. There are people who are apparently deeply concerned with "equality" who live in gated communities.

The "easier to track it" part is more telling, though - most economists will cop to being "drunks looking for their keys under the streetlight because the light is better."

As to the first issue, what is "money"? That's a hole with no bottom. Are stocks money? So when a company buys another with stock, rather than cash, surely that's a monetary exchange right? Is property money? Gold? Oil? What about cows? Where do you draw the line. If I trade someone tickets to a play in exchange for, say, a cast iron skillet is that a monetary exchange or just bartering? If I give someone a box full of old Magic the Gathering cards and that person then selects out all the valuable ones and sells them and gains cash from it was that a monetary transaction? What if I intended for them to do that? What if I didn't?

Economics is complicated, and the desire for economists to simplify it doesn't get rid of the complexity, it just changes what subset of the real economy economists actually talk about.

I think they miss the boat in some ways... Ownership is nothing but having the right to deprive others of using something combined with responsibility for it's upkeep. It can be convenient, but in many cases, for me, it's irrelevant, or suboptimal. I don't care about having the ability to prevent other people from using a particular vehicle. It's not worth the maintenance time for me - forgetting about the cost altogether. What I really care about is having access to a vehicle when I need one once-or-twice a week - ideally one best suited to the task at hand. Communication technology has improved such that I can get what I want/need without the actual benefits and drawbacks of "ownership".

Maybe, but you are the buyside. its not about you. its about the sell side, and why they bother. the thesis is that the cost of carry on the assets is too high (eg, expensive real-estate).

to make the sell side work, its a hassle. people overcome the hassle, because the need the money. and in turn, the sell to people like you who want to lose the hassle by not owning.

So, the sell side is long hassle-factor. The buy side is short hassle factor. One side has cash, and one side needs it. If the allocation in the last sentence was reversed, there would be a busted market. But since it's not--presto the market works.

Its a worthwhile bit of understanding. And its generally true in other eras. EG many large victorian homes in SF were too expensive to be single family homes, so they became flats in the 20th century. Same deal--the house is too valuable to carry as a single-use asset, so sub-divide it and capitalize to other peopel who didn't want the "hassle" of a massively expensive house. Basicaly the upkeep became a problem when servants became too expensive.

That kind of thing--ie, a form of economic infeasibility--is what people are facing. Then, as now, even in higher price points. And thus you see decent listings for nightly and weekedn rentals in good neighborhoods where rents have shot up and people who could have afforede a private space now have "temp roomates" or what not a couple times a month to net a couple hundred dollars.

Roll back further in history though and the notion of "owning things" was an invention - it wasn't that people wanted to "own a horse" - it's that the entire notion of ownership was invented to determine who got to "ride a horse when they wanted it".

For me, I don't want "to own a house with a lawn". I want "a convenient piece of grass to throw a football around, sit outside and eat lunch, and walk my dog". I don't want "to own a car" - rather, I want "A few times a month, access to a vehicle within a few blocks of my apartment for a few hours".

I think we're saying the same thing here, but the "sharing economy", is, more than anything else, about using communication technology to create finer grained matching between supply and demand - about matching access to goods with people who want to use them, about providing an opportunity to turn time into money and money into time to the extent that one needs and desires.

I don't buy your model of property. Sure, the specifics of legal systems are invented, but the basic idea of property was not, or if you like, they were invented by evolution.

The basic idea of property is that you decide a resource is your property, then you mark it in such a way that other people see your claim. Territorial animals do this, and it works. Not perfectly (no human system is perfect either), but they work.

The evolution part is how society comes to recognize territory markers, and which claims it respect and which it rejects. For an animal, the signal could be pheromones. If another animal smells a marker, they will tend to avoid that territory, because they know the "owner" will fight to the death if necessary, and the territory itself is worth less than the risk of taking the fight. But presumably, if an animal goes rogue and marks a huge area as its territory, there is a limit to what that animal society will respect. And of course, if resources get tight, things will break down into violence (just like in human society).

this sounds utopian. but if you didn't need the money would you go thru the hassle of sharing your car or house? the only reason people do it is to recover money because they didn't make enough to cover their lifestyle. others make it a business, renting multiple apartments in walkups and sell on airbnb creating private mini hotels. i do not know one person that has a savings and or a decent salary that would let a stranger into their home, or drive a stranger to a destination because they just love to share what they have and participate. they do it because they are fucked or close to it.

the concept of the timeshare vacation rental is closer to reality of what you speak about. shared leases, mortgages, etc etc.

a startup that divides the credit potential of multiple people into a mortgage would be a real sharing, and be able to purchase into it for a time period.

i know i need to raise a family and need a 3 bedroom house for X time. Can I effectively purchase someones mortgage for 18 years at a premium on the base apr?

I'll provide a counter example: We are a Couchsurfing host because we have resources beyond out needs. Our house has four bedrooms, occupied by four rent paying tenants. We have couches and a single bed available in Northern Tasmania, if you're ever in the area look us up (email in profile). I have a well paid full time job, cash investments, as well as investments in precious metals and shares. I even pick up hitchhikers. If you're in to rock climbing, bicycle polo, music, camping, food (I'm a certified nutritionist), and building things (I'm a structural steel engineer and fabricator), we might even get along.

Couchsurfing is about projecting an "open" lifestyle, travelling etc. And it's done either by young people (to meet and "know better" other people) or by stable/upper middle class people.

Sharing in the sense of TFA, for money, is not the same.

I think he means more like Zipcar than some other sharing thing. Where you share from a corporation, it feels like sharing and is considered sharing but it's actually renting.

At some point, you have to consider not living there. If you have a luxury zipcode but not the income to support it, that's your choice.

If you could build the Transporter from Star Trek, the entire real estate industry would gather en masse to have you and the invention erased such that you never existed.

My gods, the full-time/part-time graph is one of the most misleading graphs I've seen in a while. Not only are the numbers different orders of magnitude, they're not even the same /scale/. It's hard to take any of the rest of the article seriously when the authors are willing to stoop so low in presenting their data.

That graph was taken from a different paper. It looks like the original was just pointing out that part-time jobs went up at the same time as full-time jobs went down. But the author of this article thought that it showed how full-time jobs were being replaced by part-time jobs, which isn't quite the same thing.

It is a renting economy not a sharing economy

> The Sharing Economy Isn’t About Trust, It’s About Desperation

Not in my experience. It's more about common sense and convenience. If your place is empty for a while why not let someone stay there and get some money. It used to be too much hassle before AirBNB and the like, now it's easier. I know a few people who've AirBNB'd and they are not desperate, it's just an easier system. I'm sure some people who use such services are desperate for money but it there will always be some percentage of the population is. It's not fundamental to the sharing economy and it would still have succeeded no matter how strong the economy.

There will always be some percentage of the population that are desperate for money, but that percentage has been rising. The rise of desperation has correlated with the rise of the sharing economy. How can you say the sharing economy would still have succeeded without that correlation?

I think they are largely unrelated. The rise of desperation has been mostly due to factors like the 2008 financial crash, deflationary monetary conditions and the globalisation of the the labor market. Airbnb on the other hand is kind of cool and I'd use it anyway. The 'sharing economy' companies may be doing a bit better than they would under easier economic conditions I'll give you.

> It's more about common sense and convenience. If your place is empty for a while why not let someone stay there and get some money.

My family economist described it as "promoting higher rates of capital utilization" - i.e. helping people make better use of the resources and investments that already exist.

> But what's getting them to the threshold in the first place is a damaged economy, and harmful public policy that has forced millions of people to look to odd jobs for sustenance.

Would be nice to qualify that statement a bit more. Articles like this seem to think that we've hit some minor blip in the history of Western economies, ignoring the vast amounts of evidence to the contrary. Unlike previous industrial revolutions, technology-driven solutions are now rapidly replacing human-capital across every industry, leaving little to no options for those being displaced. This trend doesn't show any sign of slowing.

Ideally, the sharing economy can evolve into the larger economy as a whole, shifting the nature of how compensation and payment take place between people, and shift the idea of what is a "job". Combined with technological advances, and a society can emerge where we don't require every single member to spend the majority of their time producing economic output in order to generate a sustainable amount of resources. That may sound naively optimistic, but no more so than the quaintly nostalgic dream this article professes, along the lines of "why can't things be like they were back in the good old days?!"

i know someone that pays the homeless to wait on line for him.

The funny thing about articles like this is that the same articles were popping up a century or two ago for farmers forced of their land and made into "salaried slaves" where they had no choice but to hire out your labor in ways they had no control over, as opposed how they worked on the farm where they were masters of themselves.

Given that it took 50 years of constant strikes and close to 1,000 killed to get people acclimatized to salaried work I'd say the sharing economy is doing a marvelous job so far.

"To get people acclimitized to salaried work", really?

Most people would say it took 50 years of constant strikes to force owners/employers to _change working conditions_ enough so people people in waged work (most of those people striking weren't 'salaried') had sufficient dignity and basic needs being met, resulting in some degree of social calm.

But you're suggesting they were striking simply because waged work was unfamiliar to them, and eventually they got 'acclimatized' (I think you mean 'acclimated'?), got used to it, and stopped striking? Rather than because their strikes actually succeeded in changing conditions?

Not sure exactly which way the author meant it, but the phrase "get people acclimatized to salaried work" could be interpreted as including society at large (both the owners/employers and the employees).

19th Century people had a much different attitude about death. There was an honor culture - what mattered was dying well. Yer basic Wobbly was all about the sort of thing Chomsky speaks now about "wage slavery". The Wobbly Way didn't work.

What worked was more like the IBEW - lineman mortality was 50% until industrial safety education and practices became a thing. My Dad was a telephone lineman ( and then moved to inside work ) - he was serious about this.

I think you have to realize that in absolute terms, industrial work was still much more rewarding than farm work. That a few Henry Frick figures existed ( and Carnegie disavowed Frick eventually ) does not mean that the "exploited" did not participate in their exploitation.

I wish there was a better literature about labor. So much - from both sides - is propaganda. The "evil Capitalist" meme is tired.

It would appear you have a somewhat skewed understanding of history. Recall that in Europe enclosure of the commons predates the Industrial revolution. Feudalism. As the Industrial Revolution ramped up no one was 'forced off their land', rather people chose to leave their farm jobs because they perceived employment conditions in the cities to be better. Lander owners kept their land and bought machinery to work it. It's been a very long time since the common people worked the commons. Suggest you have a look at Deirde N. McCloskey's 'Bourgeois Dignity: Why Economics Can't Explain the Modern World', it does a decent job of dispelling every economic myth.

Is the glass half empty, or is it half full? In other words, is the sharing economy "taking advantage" of job seekers or is it giving them temporary relief?

The fear is precisely that the "relief" is not temporary - that the jobs these people used to have are gone for good, and won't be replaced by equivalent full-time opportunities. So economic insecurity becomes a permanent thing for a (large) class of people.

I was explaining this to my kids last night.

They know what current experimental robots can do. I asked them to imagine what a supermarket would look like when we have good physical automation to match the information automation. The cashiers up front have already been replaced by self-scan checkouts and a single supervisor. The stocking can be done by a robot forklift about the size of a human... so can the unloading of trucks. The trucks will be driven by software. There's really no need to keep anything except fresh produce out on display in bulk; keep one sample item on the shelves and when a shopper selects it, load it on to a cart in the back. That makes the supermarket much smaller: a warehouse, a display area, and the fresh produce area. If there's an in-store bakery, it's half automated already. The jobs for thirty to fifty people become jobs for five to ten people...

Then I asked my kids what sort of jobs people would have after that. They came up with pretty good ideas: programming robots, designing robots, and repairing them. They asked if there would be jobs for paleontologists, and I suggested that the auxiliary jobs would go away. Would a robot drive the truck? Yes. They offered that a robot with seismic sensors and ground radar would do the initial searching, and maybe there would be specialized digging robots that could be both faster and more careful than a human.

So, yeah. We won't have as many jobs in the future, so either our standards are going to have to rise and our expectations that people are defined by their jobs will have to be replaced.

You can push the supermarket thought exercise further and maybe bricks and mortar stores go away all together and we end up with some kind of Webvan / Amazon Fresh service delivered by autonomous vehicles. Those vehicles would be dispatched from autonomous distribution centers, and goods would be created in autonomous factories or picked in fields by autonomous workers.

If you think of people as essentially automatons (well, maybe highly capable meat robots), the only thing really different than the way distribution works today is we still go to the supermarket. If someone can crack the online grocery shopping experience nut, there's no reason why that couldn't change.

To that, I have to ask if we are all headed to a Wall-E future.

With high employment and high labor participation force you'd expect service providers to drop out of sharing economy in favor of a salaried job, with benefits and all.

So "temporary relief" is probably more appropriate.

it is a fundamental principle of socialism - clear separation between 2 classes of property - one for personal use only and one for business, and people are prohibited from using their personal property for business. Somewhere during the 20th century this principle (being one of a tools to control people) invaded, like weed, capitalist economy as well. "Sharing" economy strikes directly back at it.

>the sharing economy has succeeded in large part because the real economy has been struggling.

There is no surprise in the direct correlation between people's willingness to put up (or not) with oppression, be it economical or political, and the economical prosperity (or lack of it). After all, Soviet Union went down together with oil prices, and Arab Spring happened once price of bread went up.

Submitter here. You know what's weird? I could've sworn I put the title of the HN submission as the title of this article (I just Ctrl-V, Ctrl-P'd the title... Is it possible that others can edit the submission's title?)

... or maybe I'm just crazy/tired/forgetful...

eh. a joke among friends. efficient is the enemy of economic growth. if you take 30min to write a script yourself to automate some file transfers, it contributes ~$0 to the GDP. otoh, if you hired some consultants to do it for $5k, taking a month to complete the project, thats economic growth..

maybe in part - but is that a bad thing?

governments and large companies try to foster trust by being old, being around for a long time, and being big. those things - age espeically - are really only a _proxy_ for reputation, which is what uber, airbnb and lift thrive on. if they are better at delivering trust because their reputation mechanism works better than 'hey we've been around a long time' then they'll do better.

it doesn't mean the 'old economy' is lost - it's just that now they're being given a chance to reinvent themselves. it's no longer enough to be big and powerful to get people to trust you - now you need to establish a positive reputation as well. we're seeing that happen already, as companies try to help you if you bitch at them on twitter.

as of now, a celebrity complaining about bad service on twitter is far more likely to be helped than some random nobody. again - this is because our reputation systems are weak. most people know who ashton kutcher is, and if he's pissed off at a brand, they're going to take his opinion much more seriously than some guy they've never met.

so now imagine social networks all having something akin to linkedin's "how are you connected to this person" - you see someone with a bunch of bad ratings by people two hops from you on your social graph. it doesn't matter that you don't know them - you're going to put a bunch more weight on their negative ratings than you will the thousands of positive ratings given by people who are 8 hops from you, with most of those hops travelling through someone who's labelled as a 'spammer' by a woman your brother's college girlfriend used to play hockey with.

it's possible for us to know those kinds of things now, but it's very difficult. when that becomes the norm, and easy, it won't matter if yelp moves people's reviews up and down, and charges money for business to 'hide' bad reviews - if i can see all the reviews and i know my relationships to those people, i can assign the weights based upon who i know. right now, yelp is assigning the weights as they see fit - but if i label yelp's weights as "untrustworthy," people who trust me are also likely to do the same - so everyone has the incentive to be as honest as possible. screwing over strangers can screw you, because those strangers have relationships, too.

right now, and historically, we use all kinds of things as proxies for trustworthiness. age, style of dress, language, education, diction, body language, facial expressions - all of those things are easily gameable, but throughout most of history i couldn't ask everybody i know to ask everyone they know 'hey have you ever worked with this lawyer.' with all the tech we have now, it's trivial to do that, and i can stay away from a lawyer that several of my friend's friends friends have had bad dealings with. at present, he can fight anyone who says something bad about him and force that information to be removed from the public record. with a reputation network secured by a blockchain, that isn't possible - and now the block chain has a record of 'this guy tries to silence his critics.' contrast that to 'almost everyone who has criticized him has been also criticized by someone on or near your network, and many of the people who have criticized him later posted records saying that he rectified the situation. all the bullshit, fake smiles, nice suits and radio ads in the world can't make up for that information.

adopting a system like this also solves problems like voting and government issues of 'who gets rights' - instead of an 'official registry of people who are real people' - we get a graph of 'identities which i respect and value'. someone who is pro-life can say he values everyone who is alleged to have been concieved. if we can't find transactions from his node to most of hte nodes he says he supports, some of us may find him suspsicious, some of us may not. the beauty of this is that no one person owns it - it allows all of us to associate with people who operate underprinciples we like. the more accepting you are of other people, the wider the network you'll have to work with. you're free to be closed minded with selective principles; if that works for you, that's fine - but if you find that you need to interact daily with people who you think are sinners and bad people, it might force you to reconsider your perspective.

you even get rid of things like spam! some guy who owns thousands of computers with fake accounts has to get someone to vouch for them being trustworthy people, and anyone who does that risks permanent damage to their reputation.

Did you actually read the article?

The suggestion is that it might be a bad thing... for the people trying to make a living in the 'sharing economy'

> As Sarah Kessler discovered in her Fast Company investigation, it's hard to make it in the sharing economy. Many of the people renting out their labor and goods through these services will end up making a fraction of what they did at their full-time jobs, and having none of the benefits.

I read the article and the suggestion I got from it is that there is no real present alternatives…

> But what's getting them to the threshold in the first place is a damaged economy, and harmful public policy that has forced millions of people to look to odd jobs for sustenance.

Then again, it's hard to "make it" in general, and when one isn't the one designing/building the systems that people live by, you're most likely not going to be "making it".

Seems like you're suggesting overt tech fetishism for measuring reputation. It seems doubtful that the implementation will replace the sum of even partial sum of those listed in time. Rather merely another proxy of an ephemeral quality.

it maybe a "proxy for an ephemeral quality" but to call it "tech fetishism" because it uses technology is wrong. it uses technology because that's the only way we have of dealing with massive amounts of information that a person could not process on their own.

we know that humans are subject to many cognitive biases. we wouldn't call 'eyeglasses' tech fetishm, but we're all nearsighted when it comes to our ability to connect the dots and form a bigger picture of the world around us.

We have had "probability before pascal"...and turing (Franklin), It is akin to tech-chic not because it is progress like glasses, but because it also provides >=illusion of qualitative progress when merely the error of measure rises explosively and non-linearly in a way that the measure becomes meaningless. In this world the most friends on FB have the most "reputation", and if this seems like an uncharitable example many would be hard pressed to find something more relevant via nu-computation other than mere obfuscation.

I have been thinking about building something to implement something fairly similar to what you described there. If you want to chat more, my email is in my profile.

I'm curious - what exactly are you trying to prove by systematically foregoing capitalising your sentences?

It makes your post incredibly difficult to read (grammar and typographical rules weren't invented to annoy people, they mostly serve a purpose) and as such detrimental to the quality of the discussion. Therefore I've down voted you.

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