Steven Tufts: The so-called gig-economy is celebrated, maligned, fetishized, and qualified by analysts. Whether it is called the collaborative, platform, crowd-sourcing, or sharing-economy, the rise of peer-to-peer exchanges does raise important questions for workers. Do emerging ‘sharing-economy’ platforms such as Uber and Airbnb mark a significant shift in production and distribution systems? Are they emancipatory or exploitive? How can they be regulated across multiple jurisdictions and multiple platforms (e.g., Airbnb, Homestay, Uber, Lyft)? These and other questions have been raised by those emphasizing the platforms as a growing source of employment for contingent workers and their power to transform waged work into different relationships such as dependent contracts.¹ Kim Moody recently offered that these platforms are simply advanced ways for workers to ‘moonlight’ in an age characterized by depressed wage growth and the majority of new employment being in low wage, precarious jobs.² Despite the success of these services with consumers, there are contradictions for the future of work and implications for organized labour that unions are only starting to address – albeit in contradictory ways.

In mid-July 2016, the interim report on Ontario’s Changing Workplaces Review was released. The 300 plus page report said very little specifically about the gig-economy with the exception of a few sparse mentions on the role technology plays in changing employment relations.³ The Review is interested in how to extend workplace protection to workers using platforms such as Uber, TaskRabbit and Airbnb to supplement their incomes.⁴ Indeed, much of the report focusses on the general challenges of misclassification of workers as contractors.⁵ Here, the options presented to deal with gig-economy work are to either: maintain the status quo and exclude many of these workers as independent contractors; recognize these workers as ‘dependent contractors’⁶ (e.g. Uber drivers) and extend employment standards to them; or develop new regulations and standards that are specific to dependent contractors with exemptions for some sectors and workers.

Gaps and Exemptions

The narrow framing of the options misses some important points. First, regulation of ‘dependent contractors’ in the gig-economy will be subject to exemptions for specific sectors and workers just as other sectors managed to be exempt from the Employment Standards Act (ESA) in the past. Exemptions in the present ESA have been documented, such as the exclusion of a disproportionate numbers of women, young people, and racialized workers in sectors such as agriculture and hospitality.⁷ Second, there is an ‘enforcement gap’ that persists even when innovative and appropriate standards are established and applied to broad sectors.⁸If employers in small workplaces cannot be held accountable to the ESA, then how can the state ever enforce standards in a hyper-fissured gig-economy with private platforms organizing thousands of contractors? There are legal challenges to classifications, but the courts are inefficient in finding timely resolutions through litigation over classification and enforcement.⁹ Third, and perhaps most important, is the fact that new platforms continue to erode traditional employment relationships and threaten unionized jobs in existing sectors. Taxi drivers are replaced by Uber drivers and unionized hotel labour is replaced by Airbnb hosts and subcontracted cleaners. The platforms effectively download risk and investment to individuals as personal assets (i.e., cars and homes) are more deeply integrated into processes of accumulation. Workers earning substandard income in precarious employment are trapped in a vicious circle where they are forced to moonlight using Uber or rent out their homes via Airbnb to make ends meet.

At same time, capital is also able to use the platforms to create new types of operations. For example, property owners with multiple housing units can now rent out their properties on a short term basis at a daily rate much higher than longer term rentals with minimal transaction costs. These economic activities, mistakenly all lumped together as ‘home-sharing’, undermine unionized jobs and employment in sectors such as accommodation and have wide ranging impacts on rental housing markets.

The Rise of Airbnb

While the social costs of Uber were the first to be discussed at length,¹⁰ there is also the case of Airbnb and smaller short-term rental platforms. The rapid expansion of the Airbnb platform in Toronto is astounding. There are currently over 12,000 listings for Toronto on the Airbnb platform as the number of listings doubled in 2016 from 2015.¹¹ Airbnb’s recruitment and marketing image as an opportunity for individual ‘hosts’ to share their rooms or their homes to earn money for vacations and holidays is challenged by the data.¹² First, a majority of rentals and revenues are ‘entire homes’ not extra room rentals or shared accommodations. Second, over 50 per cent of revenues from Airbnb are generated by ‘multi-unit hosts’. These are professional operations holding multiple units – sometimes in the same condo facility – using the platform to enter the short-term rental accommodation sector.¹³

The result is the rise of ‘ghost hotels’, buildings or properties in close proximity with one another owned by a single operator renting out multiple units as short-term rentals on platforms such as Airbnb. The impact on the hotel sector is not insignificant. Airbnb has grown from almost nothing in 2010 to over 12,000 listings in the Greater Toronto Area and it is estimated to have already captured over 5% of the market share in Toronto and Vancouver. With over 1,000 rooms booked through Airbnb each night in Toronto, it is the equivalent of Toronto’s Chelsea hotel, the largest hotel in Canada, being rented to almost full capacity. There have been relatively few new net rooms added to the city’s hotel room supply over the last 15 years. Development has largely been restricted to smaller co-developments which include hotels and condos. At the same time, the owners of the Chelsea and other hotels are seeking to convert their properties to condominiums, further removing significant hotel room supply from the market. Conversions not only threaten unionized hotel jobs, but also diminish the city’s capacity to attract and host large conventions and events.

Even more significant than the employment effects is the removal of units from the rental housing stock. The shift of entire units from long term to short rentals has implications for Toronto’s housing supply. Research from David Wachsmuth and colleagues at McGill University has found that Airbnb alone removed 13,700 units from the housings stocks of Montreal, Toronto, and Vancouver.¹⁴ The bulk of these listings are in high demand neighbourhoods. The expanding short-term rental units do not pay commercial property taxes (which are double that of residential property taxes) or any special hotel taxes, reducing the municipal revenues that are needed to pay for public housing and tourism promotion.

Other impacts have also been reported in the media. The disruption of Toronto neighbourhoods by ‘party Airbnbs’ where multiple unit hosts operate are a concern.¹⁵ Even more disruptive and contentious is the explosion of Airbnb rental units in condominiums, some of which have bylaws prohibiting short-term rentals. In a recent twist, Airbnb is now partnering with condo developments, engaging in one-on-one agreements with condo boards over issues such as security and complaints and agreeing to revenue sharing with the boards themselves.¹⁶ This privatized regulation allows the Airbnb platform sole access to condos that might otherwise pass bylaws to restrict ghost-hotels in the property or allow competing platforms to operate. Airbnb is also used by hosts to secure mortgages for homes they might not get financing for without the additional short-term rental revenue stream. It is hardly surprising that Airbnb has even floated the idea of building its own brick and mortar properties.

Airbnb is currently valued at $31-billion and growing rapidly in major urban areas. The company aggressively lobbies municipalities seeking to regulate its operations and does not hesitate to litigate.¹⁷Currently, there are multiple battles to regulate short-term rentals and Airbnb as the largest platform. There are a number of issues at play, ranging from restricting short-term rentals to in-home units, forbidding multiple listings by ghost hotel owners, and platform accountability. Unions have engaged with the rise of short-term rental platforms in different ways, with UNITEHERE taking the lead in Canada with the formation of the Fairbnb.ca coalition to fight against Airbnb’s unregulated expansion in Canada’s largest urban markets.

Union Response to Airbnb

Fairbnb.ca is a coalition founded by UNITEHERE Local 75 in July 2016. The coalition includes some tenants’ rights organizations, neighborhood groups, condo owners’ associations, hotel ownership groups, and sympathetic academics (including the author). It is best described as what Amanda Tattersall and David Reynolds term a ‘support’ coalition.¹⁸ Such coalitions are initiated by a union and largely resourced and administered by a single organization with some input from supporters. The coalition can operate at multiple scales, but in this case focuses on municipal bylaws. Fairbnb.ca is organizationally driven by UNITEHERE Local 75 representing 7,000 hospitality workers in Toronto. The coalition is entirely union-financed with in-kind contributions from coalition partners. The motivations for supporters range from primary concerns with lack of affordable housing in the city, to neighbourhood disruption, to the loss of hotel jobs. Further, there is a cross-class component to the coalition with the union partnering with some hotel employers fearing the loss of market share to short-term rentals.

Despite the structural limits of support coalitions, Fairbnb.ca has had significant success in raising the issues related to short-term rentals in Canada’s large cities. It has also been successful in getting municipalities to consider the impacts of short-term rentals seriously and regulate online platforms through municipal bylaws. This has been achieved primarily through media campaigns and lobbying efforts countering the superior communications and lobbying resources of Airbnb. In Toronto, proposed legislation will establish a licensing and registration system and restrict ‘multiple listings’ from a single host. Still contentious is the issue of allowing home owners to list ‘secondary suites’ (self-contained units in homes) which can potentially be used as long-term rentals. There also remains a lack of clarity over how accountable platforms such as Airbnb will be in reporting violations and sharing data with the city.¹⁹

Though UNITEHERE has had significant success in engaging Airbnb through its coalition strategy, other unions have chosen a quite different path of engagement with the platform. Unifor in particular has publicly supported Airbnb as ‘progressive’ capital given the company’s support for a higher minimum wage, partnerships with settlement agencies housing refugees, and alleged openness to fair regulation. In a statement submitted to Toronto city council, Unifor President Jerry Dias argues that:

“Airbnb is setting an example for a path forward that couples the potential of the digital economy with the reality of working people across the country, and has demonstrated its willingness to operate in a manner consistent with the goals of broader society. Because of Airbnb’s progressive approach, Unifor is exploring ways to work together with them. We will continue to explore areas of mutual interest to improve the public good, and if possible work toward a national partnership.”²⁰

This ‘partnership’ is indeed politically useful for Airbnb as it conveniently gives the company some progressive legitimacy and provides councillors who wish to side with Airbnb against Fairbnb.ca some political cover. Less clear is what Unifor has to gain through such a social ‘partnership’. In the USA, SEIU did attempt to undermine UNITEHERE with a similar partnership with Airbnb that promised the union access to organizing short-term rental room cleaners. But this deal collapsed after SEIU faced public criticism (and perhaps also recognized how difficult it would be to organize workers in ghost hotels).²¹ Unifor may be seeking a similar arrangement or even an understanding that would allow the union to represent brick and mortar hotels being planned by Airbnb.²² Here, we see echoes of the union’s controversial strategy to form a partnership with Magna with its ‘Framework for Fairness’ agreement a decade ago.²³ Yet short-term rentals employ far less workers than the auto parts sector. In a recent report released by The Hotel Association of Canada, it is estimated that the hotel sector in Canada generates 191,600 full-time equivalent jobs, while Airbnb generates only 1,037.²⁴ At this time, evidence indicates that short-term rentals simply do not generate nearly the same number of jobs as the traditional hotel sector which provides a full range of hospitality services. It is difficult to see how large numbers of new members might be organized through this strategy and whether any partnership with Airbnb will give Unifor any leverage in reaching these precarious workers.

It may be that Unifor’s involvement with Airbnb is more related to recent conflicts among unions. In July 2016, Airbnb made a great deal of fanfare of its hiring of Alex Dagg as its Canadian Policy Lead to head-up its municipal lobbying efforts. Dagg, once heralded as a promising and innovative labour organizer in Toronto was a leader of UNITE when it merged with HERE in the mid-2000s. Following an intense internal fight, the UNITE portion of the UNITEHERE merger left the union to form Workers United and joined SEIU. The relationship between Dagg and what now constitutes UNITEHERE Local 75 might be charitably described as ‘strained’. Dagg soon left SEIU to become Director of Operations for the National Hockey League Players Association. The hiring of Dagg to counter Fairbnb.ca would appear to be more than coincidence and quite strategic on the company’s part. Airbnb in its press release announcing Dagg’s appointment focused – in keeping with its progressive capital image – on Dagg’s career experience ‘championing social justice’ in the union movement.²⁵

Unifor established a presence in the accommodation sector decades ago with its merger with railway workers in the Canadian Brotherhood of Railway Transport and General Workers, which also represented the workers employed at the grand railway hotels. UNITEHERE has historically defended itself against raiding from a number of large unions operating in Canada. As part of this experience, it is not unexpected that UNITEHERE endorsed a letter to the CLC from a number of its affiliates harshly criticizing Unifor’s disastrous attempt to take over the Amalgamated Transit Union Local in 2016. In short, the opposing forms of union engagement with Airbnb may be inseparable from patterns of divisive labour movement internal conflicts which the company is trying to exploit to its advantage.

Beyond Cross-Class Coalitions

As a support coalition, Fairbnb.ca is not primarily designed to build a movement for affordable housing or broader regulation of the gig-economy. Fairbnb.ca’s success to date as a specific issue public campaign lies with a single organization setting strategic goals and partners deciding how best they can provide support (e.g., joint-lobbying, deputations). Admittedly, it is an effective structure for this type of campaign. In the case of short-term rentals, it can be argued that UNITEHERE’s and Unifor’s strategic choices engaging the gig-economy are also shaped by the persistent sectarianism that continues to plague the labour movement in Canada.

UNITEHERE, a small union relative to large general unions in Canada, is understandably cautious about working closely with other unions given that it has been targeted for raiding in the past. Also important is the fact that Fairbnb.ca is a cross-class coalition that does include hotel employers. While the few employers formally in Fairbnb.ca do not provide anything beyond in-kind support, the inclusion of capital from the outset structures the aims of the coalition in a very specific manner. The decision to not initially build a larger class-based coalition with multiple unions and a more expansive list of community groups limits Fairbnb.ca primarily to a media campaign and lobbying effort.

Unifor’s opposing strategy of embracing cross-class ‘progressive capital’ is as cynical as it is short-sighted. Partnership with Airbnb is unlikely to yield many new members from ‘ghost hotels’ and it remains unclear how Dias will explain partnership with a company undermining traditional hotels to his members working in the sector. Dias will also have to explain to activist members why their union is supporting a multinational firm that is removing thousands of rental units from the housing stock of large cities. While it is difficult to imagine that Unifor has embraced the partnership deal solely in response to a political difference with a smaller union, this cannot be easily dismissed as a partial explanation.

No single union is able to take on such immense and growing sectors of the economy alone. Central labour bodies and local labour councils do not have the capacities (or the affiliate support) to coordinate sectoral responses and strategies, so new formations are needed. In the case of short-term rentals, a local sector council of unions representing hotel workers may be useful. UNITEHERE represents the majority of unionized hotel workers in Toronto, but there are other large and well-resourced unions representing hotel workers in large cities. A common sectoral strategy and approach is what concern for workers in the sector demands. On this front, UNITEHERE has begun the process of re-establishing relations with the CSN fighting against short-term rentals in Quebec. At the same time, Unifor has participated in informal local sector councils such as the Toronto Airport Workers’ Council (TAWC) as it counters efforts to privatize Pearson International Airport.²⁶

New spaces of solidarity such as local sector councils where local unions representing workers in the same sector can talk to each other about common shop-floor issues are important. Further, local united fronts will more effectively confront large gig-economy firms lobbying against progressive municipal regulation – an increasingly important arena of engagement for labour, capital, and the state.²⁷ While unions require an urban strategy, local sector councils do not need to abandon the arenas of provincial or national regulation or fail to engage with the Changing Workplaces Review and its implications for gig-economy work. Successful local sector councils with an urban focus will have a multi-scalar sensibility as all social movements do. Local level formations can, however, address common concerns free from national and international leadership and start to overcome destructive sectarianism. If organized labour fragmented, workers will continue to suffer in – or be displaced from – regressive gig-economy workplaces. •

Endnotes

1. Ursula Huws is a leading voice of critical gig-economy analysis in this respect. See: “Platform labour: Sharing Economy or Virtual Wild West?,” Journal for a Progressive Economy, January, 2016, 24-27.
2. C. Brooks, “Interview with Kim Moody: Busting the Myths of a Workerless Future,” Labor Notes, July 26, 2016.
3. C.M. Mitchell and J.C. Murray, Changing Workplaces Review – Special Advisors’ Interim Report. Prepared for the Ontario Ministry of Labour to support the Changing Workplaces Review, 2016. The review does briefly mention the gig economy on p. 146.
4. The Changing Workplaces Review comments: “The growth of ‘the sharing economy’ continues to challenge business, lawmakers and regulators,” p. 19.
5. The Changing Workplaces Review acknowledges that for labour advocates:“Their concern about misclassification was not limited to one business or sector, but was expressed as likely more prevalent in certain segments of the economy including: the “gig” or “sharing” economy, cleaning, trucking, food delivery and information technology – to name but a few.” p. 146.
6. “Dependent Contractor” is the ‘common law compromise between standard employment relationship and independent contractor. See also G. White, “When will labour laws catch up with the gig economy?,” The Atlantic, December 9, 2015; D. Doorey, The Law of Work: Common Law and the Regulation of Work. Emond Publishing, Toronto, 2016.
7. L. Vosko, A.M. Noack, M.P. Thomas, How Far Does the Employment Standards Act, 2000 Extend and What Are the Gaps in Coverage, Toronto: Ontario Ministry of Labour, (Submission prepared for the Ontario Ministry of Labour to support the Changing Workplaces Review) 2015.
8. L. Vosko and M. Thomas, ‘Confronting the employment standards enforcement gap: Exploring the potential for union engagement with employment law in Ontario, Canada’ Journal of Industrial Relations 56 (5), 2014, 631-652.
9. M.A. Cherry, ‘Beyond Misclassification: The Digital Transformation of Work’, Comparative Labor Law & Policy Journal, 37(3), 2016, 544-577.
10. See for example B. Rogers, “The Social Costs of Uber,” University of Chicago Law Review Dialogue, 82(1), 2015, 85-102.
11. For a thorough report on the impact of Airbnb on Toronto’s housing market see T. Wieditz, Squeezed Out: Airbnb’s Commercialization of Home-Sharing in Toronto. Toronto: Fairbnb.ca, 2017. The report and other data can be found at fairbnb.ca
12. M. Lecuyer, M. Tucker, and A. Chaintreau, “Improving the Transparency of the Sharing Economy.” International World Wide Web Conference Committee (IW3C2), April 3–7, 2017, Perth, Australia published under Creative Commons CC BY 4.0 License WWW 2017 Companion, 2017.
13. Recent data has found that 84% of Airbnb revenues in the GTA come from entire home rentals and 57% of revenues from multi-unit hosts. See HLT Advisory, AirBnB… & the Impact on the Canadian Hotel Industry, Ted Rogers School of Management, Toronto. June, 2016.
14. D. Wachsmuth, D. Kerrigan, D. Chaney, and A. Shillolo Short-term cities: Airbnb’s impact on Canadian housing markets. A report from the Urban Politics and Governance research group School of Urban Planning McGill University. McGill University, Montreal, August 10, 2017.
15. Bleecker Street in Cabbagetown is one such case. T. Kalinkowski, “Bleecker St. residents say ‘ghost hotels’ ruining neighbourhood,” Toronto Star, August 5, 2016.
16. L. Xing, “Toronto condo signs on to 1st agreement in Canada to regulate Airbnb rentals,” CBC News, October 25, 2017.
17. In 2016, Airbnb sued both New York and San Francisco over its regulations of short-term rentals. K. Benner, “Airbnb in Disputes with New York and San Francisco,” New York Times, June 28, 2016.
18. A. Tattersall, and D. Reynolds, ‘The Shifting Power of labor-community coalitions: identifying common elements of powerful coalitions in Australia and the US’, WorkingUSA, 10, 2007, 77–102.
19. Toronto City Council is scheduled to vote of AirBnB bylaws in early December 2017.
20. J. Dias, Letter to Mayor John Tory and the Executive Committee EX26.3.29, June 16, 2017. A similar letter was submitted to Vancouver’s Mayor and City Council on October 24, 2017 as the city debates a short-term rental policy.
21. S. Levin, “Airbnb’s controversial deal with labor union falls apart after intense backlash,” The Guardian, April 21, 2016.
22. The company is hesitant to call these ‘hotels’ and prefers ‘branded home-sharing units’ or ‘community centres’.
23. On the Magna deal see S. Gindin, “The CAW and Magna: What if Magna Builds an Assembly Plant?,” The Bullet, Socialist Project E-Bulletin No. 71, November 3, 2007.
24. CBRE, An Overview of the AirBnB and the Hotel Sector in Canada, Hotel Association of Canada, Ottawa, 2017.
25. Airbnb, ‘Airbnb names new Canadian Executive’, Press release posted on CNW, July 25, 2016.
26. See T. Heffernan, “Mobilizing Workers at the Toronto Airport: Interview with Sean Smith,” The Bullet, Socialist Project E-Bulletin No. 1260, May 24, 2016.
27. On this point see the recent books: I. MacDonald (ed), Unions and the City: Negotiating Urban Change. ILR Press, Ithaca, NY, 2017; M. Greenberg and P. Lewis (eds). The City is the Factory: New Solidarities and Spatial Strategies in an Urban Age ILR Press, Ithaca, NY, 2017.

Steven Tufts is an Associate Professor in Geography at York University.

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In some cases, it can pretty objectively be argued that a company is really making something the world needs; if they’re innovating on renewable energy or a cure for a terminal illness, for instance.

In most situations, assessing whether the company has a net positive impact on society is nonetheless difficult. Some devout defenders of entrepreneurship might argue that any company that creates jobs is already making the world better by default, even if the impact of the company’s products is neutral. This view can, however, be challenged, especially if the employees of the company consist mostly of “scarce resources” like programmers or designers, who are high in demand. Opportunity cost needs to be taken into account.

The Upright Project, a company that measures the net impact of companies, argues that if a company mainly employs people from this group of “scarce resources”, its impact is, by default, negative: if this particular company wouldn’t exist, these people would immediately find jobs elsewhere in companies that might produce something more valuable. In other words: if a company is taking these scarce resources off the job market, it better do something useful with them.

Companies that reach profitability are, of course, providing value to certain stakeholders: their customers, employees and shareholders — and to society in the form of taxes. However, if this value is created by burning fossil fuels or convincing people to smoke cigarettes or buy more things they don’t need, it can be argued that the net value is negative.

I’ve been a tech entrepreneur for almost 7 years. What drives me to startups and for-profit entrepreneurship is the scalability of my impact. If I was a doctor or a teacher, my work would certainly have a high positive impact, but it would only benefit a small group of people. If I build a company that manages to develop a cure for a common disease or create educational technology that helps millions of kids in developing countries learn to read, the impact of my work touches a vastly larger group of people even though the amount of hours I put in is the same. That’s powerful.

During all these years, I’ve struggled when trying to figure out how to make sure that our business — or any business — is truly serving society, not taking more than it’s giving. I’ve come to the conclusion that the answer lies in how the company is structured, and what kinds of incentives it offers its management.

Why being “mission-driven” is not enough

Many modern technology companies are created by teams of young, idealistic founders who truly want to make the world a better place. Their business ideas are often born from a genuine desire to fix a certain societal problem. In an ideal scenario, they can align their purpose and their profits: every dollar they make also advances their cause. Think of a company that produces solar panels or makes an app to buy food that would otherwise go to waste. On the surface, this sounds like a perfect equation: as the company’s business scales, so does its positive impact.

Unfortunately, this genuine willingness to be mission-driven is not enough. The world is complicated. What sounds like a business model that generates a purely positive impact can have surprising negative side effects. As the company grows bigger, it might need to venture into business areas that are no longer aligned with its original mission in order to sustain growth.

If a company is structured in a traditional way, it still needs to ultimately listen to the demands of its stockholders. If the stockholders are primarily interested in maximizing their profits — and this is often the case for any company that is public or has sold more than 50% of its equity to venture capitalists — the company’s management is incentivized to put its social mission on the backburner and focus on profits and growth instead.

Let’s take a few examples to illustrate this problem. My work is in the field of the sharing economy and peer-to-peer marketplaces, so I’m choosing my examples from this industry. I’m picking three companies that seem to have genuinely mission-driven founders who have always heavily emphasized the social impact side of their business: Airbnb, Lyft, and Etsy.

Airbnb

Airbnb is a pioneer of the so-called sharing economy. Their claim has been that we have lots of underutilized space that should be put to better use. If people use the extra space in their homes to turn them into hotels, we will need less new hotels, and the space for hotels can be used for something else.

It sounds great on paper. Unfortunately, reality isn’t quite so straightforward. The hotel industry is seeing more profits than ever. My theory is that instead of decreasing the demand for hotels, Airbnb has simply expanded tourism — because of more affordable places to stay, more people choose to travel. This also means a lot more flights, and with them a lot more emissions. And Airbnb doesn’t even want to disrupt hotels anymore; it just announced that it is now offering its platform to hotels as well, helping them find more guests.

But doesn’t it still mean that Airbnb increases the utilization of existing spaces? Not necessarily. According to some studies, 40% of Airbnb’s revenues come from professional landlords. They have turned the apartments they own, formerly available for permanent rental, into vacation rental homes. This means there are fewer apartments available for people living in a city, all the while vacation rental apartments are empty half of the time during the off-season. Because of this, rental prices have gone up in some cities, pushing less well-off people into the suburbs.

This is, of course, not what the founders originally intended; it’s simply a side effect of their business model — something economists call an “externality”. But there’s no denying that it’s an important factor when considering whether Airbnb’s impact on society is net positive.

Lyft

For a long time, the Lyft founders have been working towards a noble goal: reducing congestion and car ownership. On the surface, it sounds that Lyft’s business model is doing just that. Who wants to own a car in a city when I can summon a personal driver in a matter of minutes, for a relatively affordable cost? Lyft’s main competitor, Uber, has the same effect, but it’s been Lyft that has made its claim to fame by focusing on this positive aspect of its business model.

However, like Airbnb, Lyft is also causing externalities it probably didn’t expect. Several recent studies show that Uber and Lyft actually increase congestion in cities. Because of their affordability and convenience, they often convert people from biking, walking and public transport. Meanwhile, between rides, Uber and Lyft drivers spend on average 50% of their time alone in their cars, adding to the problem of congestion.

Etsy

Etsy was born as a statement against the world of mass-produced goods, best represented by Amazon. Etsy wanted to get more people to buy hand-crafted goods while providing an income to micro-entrepreneur crafters.

Etsy went further than Airbnb and Lyft to emphasize its position as a company that puts its mission before its profits. It acquired a B Corp certificate, which obliged it to submit annual proof that it meets rigorous standards of social and environmental performance, accountability, and transparency. In a speech to his employees, Etsy CEO Chad Dickerson read the Milton Friedman quote about profit maximization as a sole responsibility of a business, and said: “You’re all free to hiss”. Then he hissed himself, showing his distaste for Friedman’s thinking.

Similarly to Airbnb and Lyft, Etsy decided to raise lots of venture capital to accelerate its growth. Eventually, this meant that Etsy needed to offer investors a way to liquidate their investments, which meant going public in 2015.

In 2017, a hedge fund called Black-and-White Capital saw an opportunity to make profit. It started buying Etsy stock, after which it launched an activist campaign, accusing the company of careless spending and demanding that Dickerson be ousted as a CEO. The company’s board proceeded to fire Dickerson, along with 8% of the company’s staff.

Friedman 1 — Dickerson 0.

Etsy used to have a “Values-Aligned Business” team, which oversaw the company’s social and environmental efforts. The new CEO Josh Silverman dismantled this team. Etsy also gave up its B Corp certificate. Even before going public, it had started allowing the sales of manufactured goods on its platform.

These moves have been applauded by Etsy stockholders: it has tripled its share price within the past year. But Etsy is no longer the same company it used to be.

The ultimate solution: remove the incentive to maximize profits

An attentive reader might have noticed a pattern in the three stories above. All three companies had a clear way to tackle the negative externalities caused by their business models. Airbnb could ban professional landlords and only allow people to rent out the places they themselves live in and their second homes. Lyft could make its services less attractive during peak hours by volunteering to pay a congestion tax that would increase its prices. Etsy could reinstate the B Corp certificate, ban manufactured goods, and monitor the origin of goods sold through its platform more carefully.

In reality, these companies are not in a position to do so because of their company structure. They can’t escape Friedman. The main incentive for their management is to grow the business and maximize shareholder profit. All the proposed solutions are in conflict with this goal as they could have a significant negative impact on revenue and growth for these companies. And that’s why we most likely won’t see them happen.

Their structure. Their incentives. Perhaps therein lies the answer to the original challenge: how to build companies that are a force for good in society.

One can’t argue with Friedman since he is simply stating the facts: this is how companies are structured, and this is what their duty is. But what if we change the structure and duty?

In her excellent 2017 book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, economist Kate Raworth explains that we need to build an economy that lifts people out of poverty and brings them well-being while respecting the natural ceiling for growth caused by the limited resources of our planet. She believes that in order to achieve this, we need to make fundamental changes to our society and to our organizations. She writes:

“The most profound act of corporate responsibility for any company today is to rewrite its corporate bylaws or articles of association in order to redefine itself with a living purpose rooted in regenerative and distributive design and then to live and work by it.”

The key insight here is that we don’t need to create companies that maximize profits at all costs. In their articles of association, we can write that their profits are only a means to pursue their social mission, not an end goal in themselves. In some cases, this means that the company might make decisions that deliberately decrease its profits or slow its growth if its management feels that it is the right to do, all things considered.

Such company structures can be created without changing our current legislation, and some pioneering tech startups are already adopting these structures. Kickstarter, the world’s largest crowdfunding platform, paved the way in 2015 by reincorporating as a public benefit corporation, and stating it will never sell or go public. By remaining independent from the control of outside stockholders, it can be sure that its management is forever incentivised to put its mission first.

Putting our money where our mouth is

Our company, Sharetribe, helps entrepreneurs and organizations create their own peer-to-peer marketplace platforms. With our technology, you can essentially create something like Airbnb, Lyft, or Etsy. Like these three companies, we also have a social mission. In our case, it is to democratize the sharing economy by making platform technology accessible to anyone. We truly admire these three companies and the tremendous technological and cultural innovations they’ve made. However, we’re also worried about the negative consequences of their pursuit of even higher growth. Our thinking is that if we make their innovations available to local platforms operated by small businesses, social enterprises, co-operatives, non-profits or even cities, we can reap the benefits of the sharing economy without causing many of the downsides.

When our founders travelled the world telling people about this mission, many asked whether there was a risk that we would become another profit-maximizing platform giant ourselves. What if we started generating unintended negative externalities as well, and our shareholders wouldn’t allow us to do anything about them? At the time, we didn’t have a good answer. After all, we’ve had a traditional startup structure, and we’ve recognized that if we raised any more money with that structure, the final decision would no longer be in our hands. Even if we decided not to raise money, there was no way for us to make a binding commitment to our stakeholders that we wouldn’t do so in the future.

This made us worried and frustrated.

Finally, we decided to do something about it. A few weeks ago, the Finnish Trade Registry approved our new articles of association that officially transition our company into a structure called steward-ownership. We are the first company in Finland and one of the first tech startups in the world to do so. Steward-ownership is a company structure designed to ensure that our company’s profits are purely a means to pursue its mission, and forever removes any personal financial incentive of profit maximization from the company’s management. Unlike B Corp certificates, the steward-ownership structure is protected with a foundation structure and can never be dismantled once introduced.

From now on, it’s in the best interest of our management to put our social mission first, even if that means slowing down our growth. Everyone working in the company is incentivized, first and foremost, to make decisions that benefit not just the owners of the company, but all other stakeholders, the environment, and society at large. After this change, we can finally — confidently — say that our company will always be a force for good in society.

How does our steward-ownership model work in practice? That is the topic of another post.

***

If you’re inspired by this story, it is now possible to join us on our journey! We have just launched an equity crowdfunding campaign that is unlike any other crowdfunding round seen before due to our new structure. It’s now possible for anyone from around the world to invest in Sharetribe and own shares in our company, for amounts starting from 500 euros. Check out the campaign here.

A mandatory regulatory disclaimer: remember that investments in unlisted companies like Sharetribe always carry a risk of losing capital. Invest responsibly. Because of financial regulations, certain restrictions in terms of who can invest apply to residents of the following countries: United States, Canada, Australia, Hong Kong, Singapore, Japan, New Zealand, and South Africa. You will find more information about this on the investment platform.

This post was originally published in Better sharing
Photo by Volkan Olmez on Unsplash

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Darren Sharp: Commercial sharing platforms like Uber and Airbnb have reshaped the transportation and housing sectors in cities and raised challenges for urban policy makers seeking to balance market disruption with community protections. Transformational sharing projects like Shareable’s Sharing Cities Network seek to strengthen the urban commons to address social justice, equity, and sustainability. This article presents a summary of my recent journal paper “Sharing Cities for Urban Transformation: Narrative Policy and Practice” for a special issue of Urban Policy and Research. In the paper I show how narrative framing of the sharing economy for community empowerment and grassroots mobilization have been used by Shareable to drive a “sharing transformation” and by Airbnb through “regulatory hacking” to influence urban policy.

Op-ed: The city has become an important battleground for the sharing economy as commercial platforms like Uber and Airbnb leverage network effects and urban clustering through two-sided marketplaces. This poses a range of complex urban policy challenges for governments, especially in relation to infrastructure planning, public transport, housing affordability, and inequality. These commercial sharing platforms continue to disrupt legacy services, raise tensions between private and public sector interests, intensify flexible labor practices, and put pressure on rental vacancy rates.

Bold experiments for transformative urbanism like the Sharing Cities Network, launched by Shareable in 2013, tell a new story about the sharing economy. This global network was created to inspire community advocates to self-organize across dozens of local nodes and run MapJams and ShareFests to make community assets more visible, help convene local actors, offer policy solutions to local governments, and re-frame the sharing economy’s potential to drive transformational urban change. At the same time, Sharing Cities have gained formal support from various municipal governments including Seoul and Amsterdam through policies and programs that leverage shared assets, infrastructure, and civic participation to create economic and social inclusion.

The narrative framing of the sharing economy by different actors plays an important role in shaping urban policy. The Sharing Cities Network has developed a narrative of the sharing economy as a transformational global movement founded on inclusive sharing and support for the urban commons to address social justice, equity, and sustainability. Airbnb claims to “democratize capitalism” to support the “middle class” in its story of the sharing economy and uses this to mobilize hosts to influence urban regulatory regimes amidst a growing backlash against commercial home sharing’s impact on housing affordability, racial discrimination and “corporate nullification,” or intentional violation of the law, arising from its business practices.

The Sharing Cities Network encourages local actors to organize face-to-face and online in multiple cities simultaneously and connects diverse stakeholders including individuals, community groups, sharing enterprises, and local governments. Yet the Sharing Cities Network remains open to co-optation and contestation from commercial sharing platforms with thousands of staff, millions of users, and sophisticated public policy coordination at their disposal.

The Sharing Cities Network emerged at a time when the commercial platform Airbnb was encountering widespread regulatory pushback from numerous city governments including Barcelona, New York, and Berlin. In 2013, Airbnb began using grassroots lobbying tactics through the industry-funded organization Peers that it co-founded and co-funded with other for-profit sharing economy companies. Peers used Airbnb hosts to lobby New York state lawmakers, with similar efforts taking place in other jurisdictions in coordinated attempts to modify hotel laws in favor of short-stays home sharing. Airbnb honed its experiments in mobilizing grassroots support in San Francisco where it funded a successful campaign to defeat the Board of Supervisors Proposition F ballot to, amongst other things, cap the number of nights a unit could be rented on shortstays platforms to a maximum of 75 nights per year. Airbnb spent over $8 million to defeat the ballot using a sophisticated blend of mixed media advertising, door knocking and host activation, as political organizer Nicole Derse from 50+1 Strategies who co-led the “No on F” campaign observes:

The campaign had all the modern bells and whistles you’d expect of an effort backed by a Silicon Valley giant. Still, we also ran one of the most aggressive field campaigns San Francisco has ever seen. Over the course of 11 weeks, our staff and volunteers knocked on more than 300,000 doors, made some 300,000 phone calls and had over 120,000 conversations with real voters. We got more than 2,000 small businesses to oppose Prop. F. In fact, our Airbnb hosts took the lead in this campaign, hosting house parties, organizing their friends and neighbors, and leading dozens of earned media events. 

These campaign tactics draw on social movement theorist Marshall Ganz’s “snowflake model” of distributed leadership and small-group community organizing that were used to great effect during former U.S. President Barack Obama’s 2008 election campaign. Washington DC-based startup incubator and seed fund 1776 have described Airbnb’s approach to defeat Proposition F in San Francisco as “regulatory hacking” — “a strategy combining public policy and alternatives to traditional marketing for startups to successfully scale in the next wave of the digital economy.” Chris Lehane, ex-aide to former U.S. President Bill Clinton, was hired by Airbnb to orchestrate the “No on F” campaign and give it the appearance of a grassroots effort that made hosts “the face of its defense.”

The Sharing Cities Network created the conditions for grassroots actors to demonstrate that another sharing economy grounded in cooperation, solidarity, and support for the urban commons was already underway through a “sharing transformation” in communities around the world. At the same time, Airbnb used “regulatory hacking,” political campaigning, and grassroots mobilization to remove policy blockages to commercial home sharing in key city markets to further its growth ambitions. The Sharing Cities Network succeeded in framing a new story about the sharing economy based on community empowerment that was co-opted by Airbnb’s Shared City narrative and its development of Home Sharing Clubs. These dynamics of “transformation and capture” are further explored in the new paper “Sharing Cities for Urban Transformation: Narrative Policy and Practice.”

Header photo by Timon Studler via Unsplash

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However, this doesn’t mean that we are powerless and in a next installment, we will propose a strategy that is also learning from the innovations of platform capitalism. The following extracts have been sourced from Open Democracy:

Frank Pasquale: As digital firms move to displace more government roles over time, from room-letting to transportation to commerce, citizens will be increasingly subject to corporate, rather than democratic, control.

Economists tend to characterize the scope of regulation as a simple matter of expanding or contracting state power. But a political economy perspective emphasizes that social relations abhor a power vacuum. When state authority contracts, private parties fill the gap. That power can feel just as oppressive, and have effects just as pervasive, as garden variety administrative agency enforcement of civil law. As Robert Lee Hale stated, “There is government whenever one person or group can tell others what they must do and when those others have to obey or suffer a penalty.”

We are familiar with that power in employer-employee relationships, or when a massive firm extracts concessions from suppliers. But what about when a firm presumes to exercise juridical power, not as a party to a conflict, but the authority deciding it? I worry that such scenarios will become all the more common as massive digital platforms exercise more power over our commercial lives.

Focusing on the identity and aspirations of major digital firms. They are no longer market participants. Rather, in their fields, they are market makers, able to exert regulatory control over the terms on which others can sell goods and services. Moreover, they aspire to displace more government roles over time, replacing the logic of territorial sovereignty with functional sovereignty. In functional arenas from room-letting to transportation to commerce, persons will be increasingly subject to corporate, rather than democratic, control.

For example: Who needs city housing regulators when AirBnB can use data-driven methods to effectively regulate room-letting, then house-letting, and eventually urban planning generally? Why not let Amazon have its own jurisdiction or charter city, or establish special judicial procedures for Foxconn? Some vanguardists of functional sovereignty believe online rating systems could replace state occupational licensure—so rather than having government boards credential workers, a platform like LinkedIn could collect star ratings on them.

This shift from territorial to functional sovereignty is creating a new digital political economy.

Forward-thinking legal thinkers are helping us grasp these dynamics. For example, Rory van Loo has described the status of the “corporation as courthouse”—that is, when platforms like Amazon run dispute resolution schemes to settle conflicts between buyers and sellers. Van Loo describes both the efficiency gains that an Amazon settlement process might have over small claims court, and the potential pitfalls for consumers (such as opaque standards for deciding cases). I believe that, on top of such economic considerations, we may want to consider the political economic origins of e-commerce feudalism. For example, as consumer rights shrivel, it’s rational for buyers to turn to Amazon (rather than overwhelmed small claims courts) to press their case. The evisceration of class actions, the rise of arbitration, boilerplate contracts—all these make the judicial system an increasingly vestigial organ in consumer disputes. Individuals rationally turn to online giants for powers to impose order that libertarian legal doctrine stripped from the state. And in so doing, they reinforce the very dynamics that led to the state’s etiolation in the first place.

This weakness has become something of a joke with Amazon’s recent decision to incite a bidding war for its second headquarters. Mayors have abjectly begged Amazon to locate jobs in their jurisdictions. As readers of Richard Thaler’s “The Winner’s Curse” might have predicted, the competitive dynamics have tempted far too many to offer far too much in the way of incentives. As journalist Danny Westneat recently confirmed,

• Chicago has offered to let Amazon pocket $1.32 billion in income taxes paid by its own workers.
• Fresno has a novel plan to give Amazon special authority over how the company’s taxes are spent.
• Boston has offered to set up an “Amazon Task Force” of city employees working on the company’s behalf.

Stonecrest, Georgia even offered to cannibalize itself, to give Bezos the chance to become mayor of a 345 acre annex that would be known as “Amazon, Georgia.

The example of Amazon

Amazon’s rise is instructive. As Lina Khan explains, “the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it.” The “everything store” may seem like just another service in the economy—a virtual mall. But when a firm combines tens of millions of customers with a “marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house…a hardware manufacturer, and a leading host of cloud server space,” as Khan observes, it’s not just another shopping option.

Digital political economy helps us understand how platforms accumulate power. With online platforms, it’s not a simple narrative of “best service wins.” Network effects have been on the cyberlaw (and digital economics) agenda for over twenty years. Amazon’s dominance has exhibited how network effects can be self-reinforcing. The more merchants there are selling on (or to) Amazon, the better shoppers can be assured that they are searching all possible vendors. The more shoppers there are, the more vendors consider Amazon a “must-have” venue. As crowds build on either side of the platform, the middleman becomes ever more indispensable. Oh, sure, a new platform can enter the market—but until it gets access to the 480 million items Amazon sells (often at deep discounts), why should the median consumer defect to it? If I want garbage bags, do I really want to go over to Target.com to re-enter all my credit card details, create a new log-in, read the small print about shipping, and hope that this retailer can negotiate a better deal with Glad? Or do I, ala Sunstein, want a predictive shopping purveyor that intimately knows my past purchase habits, with satisfaction just a click away?

As artificial intelligence improves, the tracking of shopping into the Amazon groove will tend to become ever more rational for both buyers and sellers. Like a path through a forest trod ever clearer of debris, it becomes the natural default. To examine just one of many centripetal forces sucking money, data, and commerce into online behemoths, play out game theoretically how the possibility of online conflict redounds in Amazon’s favor. If you have a problem with a merchant online, do you want to pursue it as a one-off buyer? Or as someone whose reputation has been established over dozens or hundreds of transactions—and someone who can credibly threaten to deny Amazon hundreds or thousands of dollars of revenue each year? The same goes for merchants: The more tribute they can pay to Amazon, the more likely they are to achieve visibility in search results and attention (and perhaps even favor) when disputes come up. What Bruce Schneier said about security is increasingly true of commerce online: You want to be in the good graces of one of the neo-feudal giants who bring order to a lawless realm. Yet few hesitate to think about exactly how the digital lords might use their data advantages against those they ostensibly protect.

Photo by thisisbossi

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Hugo Guyader and Julian Agyeman: Analysis: The sharing economy is often lauded with offering a number of opportunities, from access to cheaper and more convenient consumption alternatives to new revenue streams for on-demand services. Next to the economic benefits are promises of sustainability and social inclusion. Unfortunately, not everybody stands equal in this emerging economy. Several academic papers have started to document evidence of discrimination in the sharing economy. Here we focus on racial discrimination.

In 2015, Harvard Business School researchers designed field experiments: They created fictitious Airbnb profiles to interact with real hosts and observed that requests from guests with African-American sounding names were 16 percent less likely to be accepted than identical guests with white-sounding names. Previously in 2012, they also established that black hosts in New York City had a harder time at finding guests such as they priced their rentals 12 percent cheaper than hosts who were not black. More recently, the analysis of Airbnb listings in the U.S. and Europe (2014-2015) showed that hosts from minority groups charged 3.2 percent less for comparable listings within the same neighborhood.

Another recent study of Airbnb listings in the U.S. (2015-2016) revealed that participation as a host is lower in areas with higher concentrations of minority residents: That is, a typical white neighborhood would have twice more listings on the platform (four listings, at $120 per night, and 96 percent rating) compared with a non-white neighborhood (two listings, at $107 per night, and 94 percent rating). That is, not everybody has equal opportunities to participate as a host on Airbnb.

A similar experimental study (i.e. fictitious Airbnb profiles) conducted in 2016-2017, showed that requests from guests with African-American names (vs. white names) were 19 percent less likely to be accepted. So despite Airbnb’s efforts  — community commitment, removing host pictures in the initial search — these studies document that racial discrimination has always been and is still a critical issue today. There’s even a study specifically focused on Airbnb’s change of layout last year, comparing daily bookings and price data before and after the implementation of the “anonymity” policy, but it only shows a negligible increase in bookings for black hosts, and only in New York City — not in Los Angeles, New Orleans, or Philadelphia.

The issue applies to other sectors in the sharing economy. For instance, a study of Uber and Lyft ride-hailing companies indicated a similar pattern of discrimination: Drivers canceled the hailed rides twice more for passengers with African-American sounding names. In the context of freelancing marketplaces like Taskrabbit and Fiverr, a database study observed that black workers received significantly less ratings, as well as lower ratings, compared with other workers with similar attributes. So we know that both sides of sharing economy platforms — peer-consumers and peer-providers of services — suffer from racial discrimination.

Interestingly, the most recent of the Airbnb experimental studies shows that reputation and social trust play a critical role in how discrimination plays out: Guests with only one peer-review vs. no review from a previous Airbnb experience are considered similar, whether they have white or African-American-sounding names. Similarly, another recent study with real Airbnb users showed that profiles with higher reputation score are rated as more trustworthy, regardless of the other demographic information. The problem is that to get a reputation, people need to get to use the services in the first place. This is a vicious circle.

To date, sharing economy research on racial discrimination seems to be more focused on Airbnb, probably due to the media exposure brought by #AirbnbWhileBlack on Twitter, or Noirbnb.com and Innclusive.com (and more recently, Muzbnb.com). It is tempting to call for further research, outside the Airbnb-Uber-Lyft nexus in order to enable sound policy recommendations, but what is “enough” in terms of evidence? Future studies should investigate different geographical contexts because racism is not only a phenomenon in the U.S. but is a global issue. For instance, in 2016, a Swedish radio program sent 200 requests to hosts in the country’s three largest cities from a black person’s guest account: 42 percent were rejected because of unavailability, but when these hosts were re-contacted from a white person’s account, a third of these listings were suddenly available and the requests accepted. Since then, Airbnb has changed its policy so that hosts cannot rent a period that has previously been denied to other guests.

Racial discrimination is a structural issue that permeates society as a whole and is not limited to sharing economy markets. Thus the context in which sharing economy markets are embedded is biased so platforms’ efforts at self-regulating will fail. What short-term mechanisms can be put in place to thwart societal biases and make the sharing economy opportunities available to everyone and not only to the privileged white upper and middle classes? Digital companies have demonstrated their agility in implementing change faster and more easily than traditional brick-and-mortar companies. One can also note that current papers investigate racial discrimination in the sharing economy from a business perspective. Further research should be intersectional, using Critical Race Theory (CRT) in conceptualizing the role of power, institutions, norms, and emerging economic models when it comes to racial discrimination.

Other forms of discrimination in the sharing economy include gender and LGBT-based discrimination. In the study on freelancing mentioned earlier, women were shown to receive 10 percent fewer reviews than men with equivalent work experience. Another Airbnb study in Dublin, Ireland, in 2016 found that LGBT guests were approximately 20-30 percent less likely to be accepted than other guests: hosts basically ignore their requests, without actually rejecting them. To provide a coherent, evidence-based critique of discrimination in the sharing economy, more research is necessary on discrimination for disability, age, religion, and other factors. Having a wide-ranging evidence base across a range of discriminatory activity might speed up the kind of change we know the sharing economy is capable of.

Header image of Airbnb building, by Open Grid Scheduler/Grid Engine via Flickr

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As the money in the Sharing Economy has grown, so has the driving ideology behind it, and now it’s become basically a deregulation movement, with companies like Uber and Airbnb building business models that demand deregulation of their industries in cities around the world.

Tom Slee on Silicon Valley’s anti-regulation revolution. This interview was conducted by David Hugill and originally appeared in Canadian Dimension:

It seems like politicians, journalists and pundits are lining up to praise the “innovative” promise of the so-called “sharing economy.” But is there something sinister lurking behind the collaborative facade that so often accompanies rosy assessments of the peer-to-peer online sector? To consider this question, we connected with Tom Slee, author of the new book What’s Yours is Mine: Against the Sharing Economy.

David Hugill: Let me begin with a basic question. What is the Sharing Economy?

Tom Slee: It’s a new wave of Internet platforms that are designed to facilitate exchanges between individuals. Early on, it involved things things like tool-sharing programs. Why does everybody need to have a hand drill? You never really use it. It just sits there on the shelf. Why not share it with others? The Sharing Economy came about as a means of using Internet platforms to solve problems like this one, initially with a lot of egalitarian talk, a lot of community focused talk. The idea was that the Internet could facilitate person-to-person exchanges without having to go through the big corporations. Today, it is primarily a way of using Internet platforms to facilitate transactions in the service economy, for example by connecting people with car rides, through Uber or Lyft, with places to stay, through AirBnB, with personal loans, through Lending Club, with places to work, through WeWork, and all those kinds of things. As the money in the Sharing Economy has grown, so has the driving ideology behind it, and now it’s become basically a deregulation movement, with companies like Uber and Airbnb building business models that demand deregulation of their industries in cities around the world.

DH: So you are dubious about the claim that these enterprises are mostly about progressive forms of community building. In fact, you’ve written quite critically about the way in which proponents of the Sharing Economy have adopted — even co-opted — the communitarian language of social movements to describe their work. Can you elaborate?

TS: I think co-opt is the right word. In fact, the only hesitancy I have about using that word is that I think some proponents of the Sharing Economy literally believe the things they are saying. In many ways, this is a product of what has been called the California Ideology, which is a strange combination of beliefs that have traditionally been both left and right wing, a kind of anti-authoritarianism that has become a full fledged techno-libertarianism. There is this belief that there is no contradiction between having sustainable, small scale exchanges and globe-straddling corporations that will administer them. If there is one thing that motivated me to do this work, it is seeing progressive language used to promote something completely antithetical. Sharing Economy boosters use the language of non-commercial exchange, but what’s mostly happening is that they are promoting the extension of a harsh free-market economics into places that it previously couldn’t reach. So co-opt is absolutely the right word.

DH: In your book, you hint at the way that Sharing Economy corporations — especially Uber and AirBnB — use the language of “livable” cities to describe the implications of the services they provide. Rhetorically at least, their ideas harken back to Jane Jacobs and other liberal urbanists that valued lively, populated, salubrious and co-operative urban spaces. I get the sense that you share my incredulity about their claims. Is that right?

TS: I think AirBnB has been the been the biggest in terms of this. They’ve talked about the “shareable city,” or, the “open city,” where you can find a home wherever you go and so on. They celebrate the small scale, individuals having people stay in their houses and maybe fixing bikes on the side or something. In this way, they promote a kind of Jacobsian vision of the city, if you like. I just don’t know if the AirBnB folks believe their own messages anymore. If they do, they must be isolated. In the last few weeks, I have been working with a journalist who writes for Fusion and is doing some research on AirBnB’s impact in Reykjavik. Here you have a city of a 120,000 people and a total of 22 apartments available for long term rent. Essentially none, in other words. At the same time, two-and-a-half thousand apartments have been turned over to AirBnB listings. So AirBnB might say “come and live like a local,” but actual locals can’t even live like locals anymore.

AirBnB is very effective at promoting their narrative. They regularly put out these studies on the benefits that their service provides to the cities where they operate. They say “we bring a lot of money to this city.” They compare the full number of AirBnB bookings to what it would be like if all those people had decided to stay at home and they say “look, here’s all the money we’ve brought in.” Then they take the power consumption of people staying in hotels and compare it to people staying in AirBnbs and say “see, we saved you all this energy.” But you could also do it the other way around. You could say, look, “we took all this money away because people weren’t staying in hotels.” Or “we added environmental problems” if you compare their impact to what it would have been if people had stayed at home. That’s why I say that if, they still believe their own rhetoric at this point, I have no idea how they square the circle.

DH: I don’t know if you’ve had the misfortune of reading Zipcar founder Robin Chase’s book, Peers Inc., which is a Sharing Economy manifesto of sorts. In any case, it really pushes this idea that Sharing Economy enterprises are topplers of entrenched power, that they are the builders of horizontal networks that supersede and overwhelm centralized forms of power. There may be an element of truth in this, but what interests me is how hard it is to square this claim to decentralization with the new forms of stratification that these businesses have created. I mean how can a “movement” that has created so many new billionaires be about anti-hierarchical decentralization? Isn’t there a perverse irony at the core of these claims?

TS: It is remarkable, isn’t it? You have the image of the network as very decentralized, but the end result has been that the internet in many of its manifestations is a winner-take-all environment. The Sharing Economy has become an environment where the biggest players are as big as ever and to some extent you have a long tail of people making a few bucks. What we have is what some political scientists have called the “missing middle.” I don’t think AirBnB is a threat to Marriott or other big hotel chains. It is a threat to bed-and-breakfasts and small independent hotels. What we’ve seen is that these new platforms don’t end up challenging the biggest companies but independent operators who get stuck in the middle and have a hard time making it.

DH: So is this claim that Internet platforms are providing new opportunities for people to connect in a decentralized way simply a ruse, or are there Internet innovations that are capable of providing genuinely progressive opportunities to move beyond concentrated forms of corporate power?

TS: You can go back to the ’90s and you’ll find that a lot of the early Internet culture movements — Indymedia, things like that — were very big on the potential of disintermediated communication forms to remove hierarchies, get rid of gatekeepers in publishing and so on. But my feeling is that they got completely outflanked by the big platforms. You don’t have to worry about publishers stopping you from getting your message out, but you do have to deal with Amazon. There are still groups of people who still very firmly believe that the Internet has some inherent counter-cultural value to it, but I see that as a moment in time that has come and gone.

DH: It does seem like the counter-cultural possibilities of the Internet are less abundant than they were even a few years ago. Are there particular technological shifts that have accelerated the corporatization of the online world?

TS: I think there are a couple of things. One is the rise of cloud computing and the platforms built upon it. We don’t have networked architectures any longer. Instead, everything is going through the same set of servers. Yes, you might have a network of friends on Facebook, but all that information is on Facebook’s servers. So we’ve seen that kind of evolution of different platforms. I also think that the rise of mobile technology — including apps — has created a much more segregated experience. It takes away what Jonathan Zittrain calls the “generative” nature of the technology. The phone is essentially, if not purely, a consumption device. It’s not a device you can do stuff with; it’s not a general purpose computer in the same way.

In addition to those two changes, I think that, by 2006 or 2007, a lot of people who could no longer get jobs on Wall Street were coming across to Silicon Valley instead. I think that changed the culture as well. There was a time when banks could offer the smartest computer science and math students a big bag of money to come and work on ever more complex financial instruments, but as the 2008 crash approached and then happened, that opportunity went away. Now it’s the Silicon Valley giants and the startups called “unicorns” (companies with over $1B in venture capital) that can offer the biggest bags of money. And money, as they say, changes everything.

DH: One of the things that’s really interesting in your book is the way you challenge the idea the Sharing Economy is mostly about giving people a little extra money on the side. a describes itself as a platform that allows people to make a supplementary income, maybe to pay for the cost of playing golf or some other activity. AirBnB describes itself as a platform that allows people to offset the cost of urban living by renting out part of their space. But your research suggests we should be wary about taking these clams at face value.

TS: For AirBnB, this kind of arrangement might represent half their business, but the other half is business people running multiple properties, doing it on a professional basis. I know somebody that went to one of these AirBnB events in Paris where they get all the hosts together. These events are all about training hosts to make more money. How do you do that? How do you professionalize? Maybe you get a cleaning service. Maybe you get a key handling service. They are going down that route of professionalization very quickly. Uber is an interesting case because they kind of came at it sideways. Two years ago, Uber was not talking about people working for four hours a week. They were saying you can make $90,000 driving for Uber. People were talking about the end of the poorly paid taxi driver. But that vision turned out to be a mirage. Now they are saying, “we don’t have to worry about things like decent pay because it is just a bit of extra money.” I think they’ve found that that is more effective public message. You know, don’t worry, it’s not a real job.

DH: There is a way in which champions of the Sharing Economy — whether they are actual Silicon Valley leaders or simply the provincial lieutenants tapped to do their bidding — describe the transformations that they promote as inevitable. They tell policy makers and others that the types of exchanges associated with their platforms are here for good and that policy makers better adapt to the new reality or risk being reduced to backwater status. Do you see this sense of personal destiny as part of the California Ideology that you described earlier?

TS: Uber’s CEO Travis Kalanick was very involved in the design of their new logo, which represents the coming together of bits and atoms. The merging of physical and digital worlds. Could you paint yourself in bigger, more spectacular colours? No. For them, it’s very useful to conflate the march of technology with the march of their businesses. But while technology does advance, individual businesses can come and go very quickly. A few years ago Groupon was the future of shopping. And then, boom! What’s Groupon? I think governments run the risk of closing down future innovations by being too friendly to the first big kid on the block.

DH: So we have these platforms that describe themselves as revolutionary, transformative, etc., and there is certainly a lot of truth to that. But insofar as they are pursuing a relatively straightforward deregulatory agenda, are they not, in many ways, simply recapitulating a well-established form of right wing politics?

TS: Sure, I think they are. I think it comes from a peculiarly American worldview as well. I don’t think you would have seen the same kind of development if things had started elsewhere. There is a Sharing Economy conference in Paris called OUIshare which happens every year and it has been through a few crises of conscience over this because it wasn’t the original vision that they started with. To generalize, I think we can say that Americans are more likely to see the government as a thing to be got out of the way. They simply don’t see it as having a useful role. Whereas, I think most of the Left elsewhere has a much more complex relationship with government. I mean, of course there is the Snowden revelations, there is a lot of surveillance stuff, and there are a lot of coercive problems with the state. But at the same time the state can be a bulwark against the ravages of free market capitalism, so we have a more tortured relationship with it, I think. Most defenders of the Sharing Economy don’t seem to be at all troubled by internal conflict on these questions.

Lead Image: On January 13, 2015, around 70 of Portland’s 460 Taxi cabs protested fair taxi laws by parking in Pioneer square. Organizers want city leaders to make ride-sharing companies play by the same rules as cabs and Town cars. Photo by Aaron Parecki.

The post The Sharing Economy Blues appeared first on P2P Foundation.

The sharing economy held great promise when it first emerged. It was seen as a way to help people build community, reduce unnecessary consumption, and generate extra income. It was based on the brilliantly simple notion that when we share, everybody has more.

But this vision quickly vanished. Tightly controlled, profit-driven corporate platforms corrupted that promise with their brand of transactional “sharing” that all too often depends on externalizing the costs and risks to users and individual service providers — Airbnb hosts and Uber drivers, for example. In addition, those that create most of the value on these platforms usually have no say in how the businesses are operated. Such practices are part and parcel of an effort to grow quickly at all costs, and sometimes with the ambition to establish a global monopoly.

This drive has a number of negative consequences which undermine the admittedly great promise of these services, including poor service, racism, and inadequate safety measures. It also leads to declining trust in these companies as they appear to take advantage of users in order to reap outsized financial windfalls. Uber and Airbnb are among the most well-known examples, but these winner-takes-all “sharing” platforms are emerging in other industries across the globe.

The good news is that there is an alternative — one that places control and ownership of digital services into the hands of its users. It’s called a platform cooperative, or platform co-op.

Outline

• What is a platform co-op?
• What are some examples of platform co-ops?
• What’s the difference between platform co-ops and platform cooperativism?
• How did the platform cooperativism movement start?
• How do platform co-ops differ from corporate internet platforms?
• How would platform co-ops handle user data differently than existing corporate platforms?
• Who are platform co-ops for?
• Who makes decisions in a platform co-op?
• How are platform co-ops created?
• Additional reading

What is a platform co-op?

A platform co-op is a digital platform — a website or mobile app that is designed to provide a service or sell a product — that is collectively owned and governed by the people who depend on and participate in it. That includes those who deliver the underlying service by contributing labor, time, skills, and/or assets. Where corporate “sharing” platforms extract value and distribute it to shareholding owners who seek a return on their investment, platform co-ops distribute ownership and management of the enterprise to its participants — those working for the platform or those using the service.

Platform co-ops bring the longstanding tradition of cooperative enterprise to the online economy. The two key traits that these digital co-ops must realize are democratic control and collective ownership. Some advocates insist that in order to be counted as a platform co-op, an enterprise must uphold the International Co-operative Alliance‘s cooperative principles.

What are some examples of platform co-ops?

Even though the concept of a cooperative enterprise is not new, there are still relatively few of them in the digital services industry. Here are three examples of successful platform co-ops.

• Stocksy is an artist-owned cooperative that sells stock-photography. The co-op is based in Victoria, British Columbia, and is built on the idea that the artists who contribute photos to the site should receive fair pay and have sustainable careers. Artist-members license images to Stocksy and receive 50 percent commission on sales and share any surplus-income at the end of each year. The co-op was created after the founders sold their previous venture, iStock, to Getty Images. By 2014 Stocksy had a revenue of $3.7 million, and over time, it has paid several million dollars in surplus to its artists. (The images used in this article have been purchased from Stocksy.)

• Modo is a Vancouver-based carsharing co-operative. Member-owners are shareholding members of the co-op, which means they make decisions collectively through voting. It was incorporated in 1997 with just two cars and 16 members. Today, it has more than 16,000 members and a fleet of over 500 sports cars, sedans, trucks, SUVs, vans, and hybrids — all of which are available at $4/hour through their mobile app and website. Modo is the first carshare co-op in North America.

• Fairmondo is a cooperative online marketplace that is an alternative to eBay and Amazon. It is owned and run by its buyers, sellers, workers, and investors, and sells ethically-sourced products from small fair trade companies. Fairmondo was originally launched in Germany in 2012 as a cooperatively-owned marketplace to promote fair goods and services as well as responsible consumption. The Fairmondo team has created a federated model in which an affiliate can launch a co-op in another country using the Fairmondo brand and platform to serve the local market. The company is currently building Fairmondo UK and plans to create a global network of country-based cooperative marketplaces.

What’s the difference between platform co-ops and platform cooperativism?

The broader movement towards collective, democratic ownership of digital services is called platform cooperativism. It encompasses a wider range of enterprises because it describes a technological, cultural, political, and social transition into the next economy — from one based on shareholder-owned corporations towards one that comprises democratically-owned and controlled enterprises. The goal of platform cooperativism is to bring about more equitable conditions to the online economy, especially in regards to labor standards, transparency, and cultivation of the digital commons.

For example, if a digital services company only gives partial ownership or control to its worker-users, it is not a platform co-op. However, because it’s taking steps to broaden its ownership of its digital platform, the company could be considered as part of the platform cooperativism movement.

How did the platform cooperativism movement start?

Like most movements, it’s a challenge to pinpoint exactly when the concept of platform cooperativism came into existence. The idea came out of an emerging critique of the extractive sharing economy and is the result of numerous people’s work. An early call for a more equitable alternative came at the SHARE conference in San Francisco in 2014, when Janelle Orsi, executive director and co-founder of the Sustainable Economies Law Center, challenged corporate sharing companies to share their ownership and wealth with users.

Later that year, Trebor Scholz, associate professor of culture and media at the Eugene Lang College of the New School for Liberal Arts, coined a term that gave the movement its name in his piece “Platform Cooperativism vs. the Sharing Economy.” Scholz questioned the premise of corporate “sharing” services in which a few owners and investors are the main benefactors. Scholz suggested that instead “developers, in collaboration with local, worker-owned co-ops could design such a self-contained program for mobile phones.”

Scholz wrote:

Let us apply the power of our technological imagination to practice forms of cooperation and collaboration. Worker-owned co-ops could design their own apps-based platforms, fostering truly peer-to-peer ways of providing services and things, and speak truth to the new platform capitalists.

Days later, Nathan Schneider, scholar in residence of media studies at the University of Colorado Boulder, wrote a piece for Shareable about the platform cooperativism trend that he saw unfolding. The piece, “Owning is the New Sharing,” established platform cooperativism as a movement with many concrete examples and introduced it to our global community of readers.

Due to a burgeoning interest in the movement, Scholz and Schneider organized the first Platform Cooperativism conference in Nov. 2015 at The New School in New York City. It brought together a large, diverse group of scholars, programmers, entrepreneurs, policymakers, CEOs, and venture capitalists.

Following the conference, Scholz published a primer on platform cooperativism this year that further defined the concept with its typology and principles surrounding the movement. Schneider and Scholz are also editing a collection of pieces on platform cooperativism by more than 50 contributors. Their book, which is slated to be published in late 2016, is called Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet.

How do platform co-ops differ from corporate internet platforms?

Since platform co-ops are managed and owned by their workers and users, they are more likely to operate in a manner that puts community first. Corporate-internet platforms are legally obligated by bylaws to maximize profit for their shareholder-owners, so they are more likely to act in ways that undermine their users’ interest in pursuit of this purpose.

Due to this difference, there are many ways in which these two types of enterprise would differ. Here are a few ways, most of which were drawn and adapted from Scholz’s primer on platform cooperativism:

• Decent pay and income security for workers: On a corporate platform, profits are often invested back into the company for further growth. Otherwise, they go to shareholders in the form of dividends, greater salaries, or financial bonuses for the company’s board members. Because co-ops are owned by the workers and users, income security is a top priority. If a co-op is doing well, its worker-owners will decide to pay themselves a fair wage. After accounting for costs and reinvestment in the co-op, any leftover income is usually divided between the worker-owners of the enterprise.

• Transparency: Most corporate platforms are vague, or even secretive, about how they operate their business. Platform co-ops, on the other hand, are transparent with their users about how they are managed in order to be democratically accountable. They are also likely to be open about how they collect and use data, unlike major corporate services that hide behind obscure, complicated terms of use agreements.

• Diversity: Corporate digital platforms are often criticized for lacking in diversity, especially in leadership roles, and for not addressing the needs of users from marginalized communities. Because platforms co-ops have collective decision-making processes, all users can voice concerns easily and directly and play a significant role in coming up with solutions.

• Privacy: Almost all corporate platforms rely on user data to maximize the efficiency and profit of their services, but most of them do little to respect their users’ privacy. Platform co-ops, by the very nature of being owned and democratically-controlled by users, would be obligated to follow procedures that do the utmost to protect privacy. Because privacy is such a critical issue with digital platforms, we’ve included an extended explanation below.

How would platform co-ops handle user data differently than existing corporate platforms?

There are two key issues in how corporations handle data obtained from their users. First, algorithms can manipulate users’ data in ways that bias and discriminate against them in harmful ways. Second, there can be serious privacy implications regarding when and how much of this data is handed over to unknown third-parties like advertisers or government agencies without judicial warrants or other types of public oversight.

Platform co-ops, by the very nature of being owned and democratically-controlled by users, would be obligated to follow procedures that do the utmost to protect privacy. Sound privacy practices may include the refusal to sell or provide personal data to third-parties unless required to by a warrant and using encryption tools to ensure that data would not be intercepted or lay vulnerable to malicious hacking.

Who are platform co-ops for?

Platform co-ops are for anyone who uses the internet or mobile apps for any purpose. As people increasingly rely on the internet for professional, personal, or social reasons, it’s important that its infrastructure is designed to be robust, fair, and secure. Platforms that provide digital services, like websites and apps, are a critical part of the internet’s infrastructure, so it’s important that they are accountable to the people who depend on them.

Entrepreneurs, programmers, and designers who want to create user-centered digital services can look to the platform co-op model to ensure that their enterprises place users and workers at the core.

Who makes decisions in a platform co-op?

Usually, the rules of governance are specified by each co-op’s own bylaws, which are drafted at the time it is founded — these bylaws, however, may evolve over time.

Here are just a few ways platform co-op make decisions:

• Voting on organizational rules: At Fairmondo, 90 percent of the stakeholders have to agree to change anything about their general principles.

• Electing the managing board: Co-op employees have a say in electing the managing board. This incentivizes managers to be transparent and receptive to workers’ needs and critiques.

• Using decision-making tools that enable democratic governance among a large number of users: The collaborative decision-making platform Loomio is used by Wikimedia to gauge the level of consensus among their large number of international community members. It is entirely possible that familiar online voting tools could eventually be adapted to create a seamless, accountable governance structure.

How are platform co-ops created?

Platform co-ops can only emerge out of an ecosystem of tools, institutions, and cultural norms that encourage their creation. New startup platform co-ops can be started from the ground up if they meet an existing need and can easily gain a critical mass of user participants. They can also come out of existing platform co-ops through federation or by spinning off. This is a common practice among offline co-ops.

For now, the easiest way to build a platform co-op is to start off as a conventional, investor-backed start-up, and then transition to the co-op model. After the founders of an early-to-medium stage company have gotten their platform off the ground, they could arrange a transition in which their users and other stakeholders buy the co-op from them and their investors. Although this means that the platform would start off with a corporate, top-down structure, this process allows the enterprise to first develop a user base that is enthusiastic to oversee and govern the platform into its future.

Specific rules around how to incorporate as a cooperative can vary between countries, or even states or regions. No matter where the co-op is based, it must have a set of bylaws and operating agreements that establish its principles and governance structure. The following resources may be a helpful entry point into getting a platform co-op started:

• Co-opLaw.org: A collaborative legal resource library created by the Sustainable Economies Law Center (SELC) and the Green-Collar Communities Clinic that is specifically designed for U.S.-based co-ops, and primarily for Californians. The website provides a broad range of definitions, general guides, and sample bylaws for prospective founders to become acquainted with the process of starting a co-op. If you are based in the San Francisco Bay Area, SELC staff members host regular legal cafés where they answer any preliminary questions about starting a platform co-op.

• The Hive: A website by Co-operatives UK and the Co-operative Bank that gives advice and training on how to start a cooperative or community business in the UK.

• NZ.Coop on Starting a Co-op: This resource offers ideas on how to start a co-operative business in New Zealand. By becoming a member of NZ Co-Op, you can receive direct advice on the process.

Since the platform cooperative movement is still in its infancy, we welcome readers to weigh in with any insights or resources that will help us develop this explainer. Special thanks to Trebor Scholz, Nathan Schneider and Ambika Kandasamy for contributing to this piece.

Additional reading:

• The Internet of Ownership: a directory for the online democratic ecosystem
• Platform Cooperativism: Taking Back the Internet, by James Sullivan
• Platform Cooperativism Primer, by Trebor Scholz
• Owning is the New Sharing, by Nathan Schneider
• 11 Platform Cooperatives Creating a Real Sharing Economy
• Not a Co-op? Not a Platform Co-op!, by Josef Davies-Coates
• How Platform Co-ops Can Beat Death Stars Like Uber to Create a Real Sharing Economy, by Neal Gorenflo
• Platform Cooperativism: Challenging the Corporate Sharing Economy, by Trebor Scholz
• Platform Cooperativism vs. the Sharing Economy, by Trebor Scholz
• Platform Cooperativism wiki, P2P Foundation
• The Platform Cooperativism Consortium (PCC): Supporting online cooperative enterprises through education, outreach, legal and technical support, experimentation, research, and funding
• Digital Labor Conference

The post A Shareable Explainer: What is a Platform Co-op? appeared first on P2P Foundation.

The evolution of STRs is a success story for the many STR platforms that broker transactions between STR hosts and guests, but for cities and communities dealing with the adverse social and economic impacts of the activity, STRs pose a unique new challenge.

On the one hand, STRs have a strong contingent of proponents, including the well-resourced STR platforms themselves and property owners who benefit from the flexibility and economic opportunity STRs afford them. On the other hand, unbridled STR activity has caused renters and tenants’ rights advocates to argue that profit incentives and lack of regulation have led many property owners to evict tenants and convert long-term residential rentals into STRs — removing bedrooms and entire units from the rental market and displacing and driving up housing costs for local residents.

Renters are not the only stakeholders with concerns. Hotel interests argue that unregulated STRs unfairly compete with established hotels, local regulators contend that STRs reduce local business and hotel tax revenues, and neighbors complain that a constant turnover of transient STR guests adversely impacts neighborhood quality and cohesion.

Now that the peer-to-peer economy has collided with housing, cities are being called upon to find solutions that protect public interests and meet the needs of all residents in a climate where some criticize governments for failing to adequately regulate STRs, while others criticize government for failing to embrace them.

How can cities regulate STRs in ways that generate inclusive opportunities for local wealth-creation, while still balancing the needs of all members of the community? SELC has some suggestions.

This guidebook will equip cities to respond to STRs in ways that protect public interests — including housing affordability, health and safety, neighborhood quality, and municipal revenues — while retaining reasonable latitude for city residents to host and earn money from short-term guests.  identifies key issue areas, incorporates references to sample STR ordinances from around the U.S., and provides SELC’s recommendations for best practices.

Because there is no one-size-fits all ordinance for STRs, we strongly encourage community stakeholder participation in the formation of any STR policy so that it accurately reflects local circumstances. Please share this guidebook widely: with neighbors, with community organizations, with city council members, and with mayors. We created this guidebook for people like you.

For questions or press inquiries, contact Yassi Eskandari-Qajar: [email protected]

Photo by Mechanoid Dolly

The post New SELC Report: How to Equitably Regulate Airbnb-style Short-term Rentals appeared first on P2P Foundation.

The phony corporate “sharing economy” is not a sharing economy at all, but a walled garden economy in which corporations use proprietary apps to interpose themselves between drivers and riders, hosts and guests, etc., and extract a surplus for allowing them to connect with each other. A lot of people in the peer-to-peer and cooperative movements have argued that the proper response to companies like Uber and Lyft is not to restore the medallion cab monopolies and the local regulatory cartels they depend on, but to take competition one step further and destroy the legal monopolies the business model of the corporate “ride-sharing” services depends on.

The idea is to undermine the monopolies of companies like Uber, Lyft, Airbnb and the like with a genuinely cooperative, horizontal and P2P model directly controlled by the users themselves, and cut out the corporate middleman altogether. Advocates for this model have coined the term “Platform Cooperativism” for it (if you search the #PlatformCooperativism hashtag on Twitter, you’ll find links to a lot of great articles on it).

You can even take it a step further and attack Uber, Lyft and their ilk from within by jailbreaking their apps or subverting their workforces. From what I hear it’s fairly common for Uber and Lyft drivers, fed up with the exploitative nature of their relationship to the company, to quietly pass their personal business card along to trusted customers and make future private arrangements that cut the company out of the deal. Of course that no doubt violates all kinds of “non-competition clauses,” but as far as I’m concerned Uber and Lyft can put that on their TS list.

And that’s exactly the kind of thing a lot of Austin drivers and riders are doing, now that Uber and Lyft have withdrawn from the local market. According to Tuccille,

“in the wake of a ‘victory’ for pro-regulation forces, there’s been a big surge in completely unregulated rides arranged by word of mouth, through closed social media groups, and through peer-to-peer services. On Facebook, Austin Underground Ride (currently around 6,500 members) urges former Uber and Lyft drivers to join. ‘You can post your availability and info on this page and continue making the money you need to feed your families and pay your bills. Riders can post here their needs for a ride as well. We don’t need anyone. We can make our own deals as people and take care of ourselves.’”

Open-source apps like Arcade City are also making increased headway in Austin since the referendum. In other words, actual ride-sharing — the kind of genuine P2P model that should have supplanted the medallion cabs in the first place — is the biggest growth industry in Austin. And the city government and local voters, deliberately and inadvertently (respectively) doing the bidding of the medallion cab companies, are responsible for bringing it about. By outlawing the fake, hybridized form of “ride-sharing,” they opened up an ecological niche for the real thing.

Government attempts to regulate industry are almost always motivated by the interests of the regulated industry itself. But with governments and corporations being the stupid things that they are, sometimes their plans backfire.

Photo by Storeyland

The post Austin Inadvertently Promotes Open-Source Ride-Sharing appeared first on P2P Foundation.