“By controlling their ecosystems, platforms create a stage on which every economic transaction can be turned into an auction. Nothing minimizes cost better than an auction – including the cost of labour. That’s why labour is the crucial societal aspect of platform capitalism. It is exactly here that we will have to decide whether to harness the enormous advantages of platform capitalism and the sharing economy or to create a ‘dumping market’ where the exploited amateurs only have the function to push professional prices down.”

Excerpted from sebastian olma, who analyzes the sharing economy for what it is, platform capitalism (or as we call it at the p2p foundation: netarchical capitalism):

“Sascha Lobo, a German technology blogger for Der Spiegel, has recently suggested to drop the obscure notion of “sharing” altogether. “What is called sharing economy,” he argues, “is merely one aspect of a more general development, i.e., a new quality of the the digital economy: platform capitalism.” As Lobo emphasizes, platforms like Uber and AirBnB are more than just internet marketplaces. While marketplaces connect supply and demand between customers and companies, digital platforms connect customers to whatever. The platform is a generic ‘ecosystem’ able to link potential customers to anything and anyone, from private individuals to multinational corporations. Everyone can become a supplier for all sorts of products and services at the click of a button. This is the real innovation that companies of the platform capitalism variety have introduced. Again, this is miles away from sharing but instead represents an interesting mutation of the economic system due to the application of digital technology.

It should be clear that understanding the “sharing economy” in terms of platform capitalism is by no means a matter of linguistic nitpicking. Calling this crucial development by its proper name is an important step towards a more sober assessment of the claims made by the proponents of “sharing.” Take, for instance, the notion that everyone benefits from the disruptive force of the “sharing economy” because it cuts out the middleman. Sharing models, the argument goes, facilitate a more direct exchange between economic agents, thus eliminating the inefficient middle layers and making market exchange simpler and fairer. While it is absolutely true that internet marketplaces and digital platforms can reduce transaction costs, the claim that they cut out the middleman is pure fantasy. As one blogger puts it: “Sure, many of the old middlemen and retailers disappear but only to be replaced by much more powerful gatekeepers.”

In fact, the argument is quite an obscene one, particularly if it is made by the stakeholders of platform capitalism themselves. As globally operating digital platforms, these companies have the unique ability to cut across many regional markets and reconfigure traditionally specific markets for goods and services as generic customer-to-whatever ‘ecosystems’. It seems fairly obvious that the entire purpose of the platform business model is to reach a monopoly position, as this enables the respective platform to set and control the (considerably lower) standards upon which someone (preferably anyone) could become a supplier in the respective market. Instead of cutting out the middleman, digital platforms have the inherent tendency to become veritable Über-middlemen, i.e., monopolies with an unprecedented control over the markets they themselves create. In fact, calling these customer-to-whatever ecosystems “markets” often turns out to be a bit of a joke. For the clients of Uber & Co., price is not the result of the free play of supply and demand but of specific algorithms supposedly simulating the market mechanism. The effect of such algorithmic tampering with the market is demonstrated for instance by Uber’s surge pricing during periods of peak demand. It is not very difficult to see where this might be leading. Taking a cab to the hospital in, say, New York City during a snow storm might become unaffordable for some under conditions of mature platform capitalism. For those who believe this to be overly pessimistic and a bit of an exaggeration, just ask your local taxi driver what percentage of her work is already coming from one of the digital platforms.

…

As Sacha Lobo puts it succinctly:

“By controlling their ecosystems, platforms create a stage on which every economic transaction can be turned into an auction. Nothing minimizes cost better than an auction – including the cost of labour. That’s why labour is the crucial societal aspect of platform capitalism. It is exactly here that we will have to decide whether to harness the enormous advantages of platform capitalism and the sharing economy or to create a ‘dumping market’ where the exploited amateurs only have the function to push professional prices down.”

I agree. The basis for such a decision needs to be a proper understanding of the reality of platform capitalism. The anger we have seen over the last few months directed against the “sharing economy” has a lot to do with the utterly unsubstantial claims and stories that are constantly churned out by the marketing machine of platform capitalism. Take John Zimmer, co-founder of Lyft, who told Wired earlier this year that the sharing economy bestows on us the gift of a revived community spirit. Referring to his visit to the Oglala Sioux reservation, he writes: “Their sense of community, of connection to each other and to their land, made me feel more happy and alive than I’ve ever felt. We now have the opportunity to use technology to help us get there.” No question, the pompous impertinence of this comparison is truly breathtaking. And yet, neither is this kind of rhetorical gymnastics the exception in the sharing-scene nor does it come unmotivated.

Noam Scheiber of the New Republic explains the rationale behind the obscenities of Zimmer (and his kind) with great lucidity :

“For-profit “sharing” represents by far the fastest-growing source of un- and under-regulated commercial activity in the country. Calling it the modern equivalent of an ancient tribal custom is a rather ingenious rationale for keeping it that way. After all, if you’re a regulator, it’s easy to crack down on the commercial use of improperly zoned and insured property. But what kind of knuckle-dragger would crack down on making friends?”