The Sharing Economy is using your assets

Excerpted from Trebor Scholz:

“I am all there with Arun Sundararajan, professor at Stern School of Business at NYU, who describes walking down the street in New York City, musing on all the parked cars that remain unused ninety-two percent of the time. He gets it right; it seems awfully inefficient, even wasteful. Why couldn’t he just pick up one of those vehicles, run an errand, return the car to that same spot thirty minutes later, clip a twenty dollar bill under the sunshade, and be done?

But then he claims that such emerging marketplaces can perfectly self-regulate and should be left to their own devices. Sharon Ciarella, Vice President of Amazon Mechanical Turk, made a similar argument: Mechanical Turk workers would just vote with their feet — they could not be tricked into performing exploitative work. All good here; no intervention needed.

Not so fast. It is surprising that crowdmilking practices on Amazon’s Mechanical Turk still have not raised red flags in the offices of regulators. Based on these examples, it should be clear how sorely regulation is needed. I agree with Evgeny Morozov who pointed out that the so-called “sharing economy” is nothing but the logical continuation of crowdsourcing. A company like Uber is not free from those dynamics. There is a reason that taxi fares are regulated; it prevents abuse. I rode in a town car recently and was quoted $16 for my trip. Through Uber, the same trip would have cost between $21 and $27.

But it is also all so electrifying. Uber is valued at 10 billion dollars and Airbnb, a company founded in 2008, is valued higher than the Hyatt hotel chain. Airbnb offers as many rooms as Intercontinental, which has 4600 hotels with 120,000 employees in over 100 countries. It took Intercontinental sixty years to build this business empire. Hyatt and Intercontinental had to hire architects and build up an enormous infrastructure. And then here comes Airbnb, which offers an impressive 500,000 listings in 33,000 cities in more than 192 countries. So far, Airbnb has hosted 8.5 million guests without ever turning a brick. All they got is an app; it’s a logistics company. Are we looking at a secret plot, a covert p2p takeover? Companies in the “sharing economy” can only function because they are using your “assets,” your resources: your car (Bla Bla Car, Getaround), your apartment (Airbnb), and your computing power (Skype).

But the exploitative basis of such business ventures is overshadowed by their obvious appeal to consumers. In the sharing economy, surviving without a job suddenly seems to be in reach; people can now rent out all of their “assets.” The rush to wield unused capacity (“Buy a bigger car because now you’ll be able to rent it out!”) can quickly move from a bit of welcome extra cash to being a requirement. “

1 Comment The Sharing Economy is using your assets

  1. Kevin CarsonKevin Carson

    I would frame it differently: Netarchists like Uber and Lyft are able to enclose the sharing economy *because of* intervention — the IP law that support’s the walled-garden apps — and Uber and Lyft themselves need to suffer creative destruction at the hands of open-source alternatives that violate and evade the regulations. Uber and Lyft are a halfway point towards the real thing, like Encarta was before Wikipedia destroyed it.

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.