There is no such thing as a sharing economy

My neighbor and I share a snow shovel because we share some stairs that need to be shoveled when it snows and we share responsibility for doing the work. If I owned the stairs and charged him a small fee every time he walked in our out of the house, that would be the opposite of sharing.

Excerpted from Matthew Yglesias:

“This is a dumb term and it deserves to die.”

(after you read Matthew, please read the excellent rebuttal/reply from Neal Gorenflo here)


Photo by Spencer Platt/Getty Images

Matthew writes:

“It started, as best I can tell, with Zipcar which predates most of these companies and from the get-go described its product as “car sharing.” The main problem with that description is that it wasn’t car sharing. Zipcar was not and is not a service that facilitates the formation of automobile co-ops in which multiple households combine to collectively own and share a fleet of vehicles. That would be an interesting idea for a business, but it’s not Zipcar’s business. The way Zipcar’s business works is that a firm owns a fleet of vehicles and then offers them as short-term rentals to its customers. They made up the word “car sharing” because the rental car business was well-established already and Zipcar wanted to rent cars in a different kind of way, so they needed a way to signal to people that it wasn’t a head-to-head competitor with Hertz.

But of course things metastasized. So when cities started creating municipally chartered short-term bicycle rental entities, those were known as “bike sharing.” Things really got nasty when AirBNB launched a short-term rental platform for residential housing, because both the housing and hotel sectors are heavily regulated and taxed in different kinds of ways. Wouldn’t it be better to just say we’re sharing rather than running a hotel? Tom Friedman’s latest sharing economy column is about a website that seems to be a platform for selling used clothing.

These are mostly great businesses. The sale of used durable goods has always played a role in the economy, and insofar as the Internet lower search and transaction costs its role will grow. For rentals I think the case is even stronger. Traditionally, in order to make renting viable the goods-available-for-rent had to be stockpiled in huge centralized depots that were easily discoverable. Thanks to digitial technology, it’s now feasible to do what Zipcar does and disperse the cars throughout the city. Since the cars are dispersed, they’re more convenient. But none of this is sharing.”

1 Comment There is no such thing as a sharing economy

  1. AvatarChris Cook

    Well, it would be sharing if the cars, tools and bikes were owned in common, and managed on a surplus sharing basis by a service provider partner, rather than by a private or public intermediary organisation.

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