Would you get into a car driven by a total stranger? Would you give total strangers keys to your home while you're on vacation for a few weeks? Would you like The Internet to tell you what it thinks of who you are and how you live your life?
Most reasonable people would say "No!" But the new sharing economy says "LIKE!"
The sharing economy is creepy, dystopic, and it gives me the jim-jams.
These sharing companies all have a few things in common:
- They use mobile phone apps and websites as their method of access
- They all act as "clearinghouses" or dispatchers, skimming profits off of every transaction while steadfastly ignoring or denying most liability and responsibility, and not actually "employing" any of the people or owning any of the assets used. They're middlemen.
- They typically ignore, avoid, or subvert regulations and laws that have constrained similar businesses.
- All the hype aside, none of these companies are really "tech companies". Their innovation is typically limited to cute names and nice-looking app design. In other words, the emptiest of marketing, coupled to a billing platform.
- You could get most of what they offer done with a Craigslist search.
What's Wrong Here?Recently, the CEO of AirBnB appeared on the Colbert Report. He told a mildly charming story about how he founded his empire: He and his roommate were short on rent in San Francisco, so they (almost certainly illegally) sub-let their apartment during a convention. The proverbial lightbulb went on, and AirBnB was born.
These guys straight-up broke the law. That's not uncommon for young people desperate for cash. But is that model (breaking the law!) and mindset (do whatever you need to for cash!) something we should scale up?
Disrupting Regulation By Ignoring ItThe most immediately contentious element of most of these new sharing businesses is their disregard of existing regulations. Uber, Lyft, Sidecar, and other car-sharing services are taxi or limousine services in every way that matters. They refuse to admit it publicly. Privately, they morph from one thing to another depending on where they're operating and which officials they're talking to. They'll claim to be one kind of service in one city, and then claim the exact same business is a totally different kind of service in another, just to avoid regulation.
There's two problems here.
One problem is these regulations the sharing services are ignoring were put in place for a reason. Maybe society only wants a certain number of cabs on the street, or wants the drivers tested, insured, and certified. Maybe you don't want a hotel (or several) on your block or near your kid's school. As a democratic society, these regulations and laws were things We The People wanted, voted for, and implemented. If we don't like the results, change the laws.
It's as though the AirBnB CEO said "my roommate and I were having a hard time making rent, so we sold drugs. It was awesome and we made a lot of cash. So we started an app for people to buy drugs from us!"
To be clear, the new sharing economy literally makes you agree they have no liability for your injury or death. And when you scratch the thin veneer of cute-and-cuddly-and-harmless-and-hip these companies all desperately try to project, you will see the same corporate law-speak and cash-think underneath. They aren't in this to make your life better. They're in this to make their lives better, chiefly through taking your money.
Government moves slow. It hasn't cracked down on some of these businesses because of bigger problems, the sudden massive scale of the opportunity, and short-term thinking about how some of this business might be "helping" people get by. It's not wise, and sets a bad precedent of ignoring law when it's convenient.
The other problem is this selective law enforcement is patently unfair to existing players in the market. The taxis, hotels, and restaurants that followed existing laws at great expense and inconvenience are now having to compete with a flood of new players who haven't made those kinds of investments and don't feel bound by such old-fashioned concepts. How is that right? Why does booking through a website or iPhone suddenly change the rules for some people?
I have little sympathy for the government here as well. Instead of moving swiftly to prosecute flagrant violation, most governments have waited too long to maintain any moral high ground, and then in the face of a small group of loud people, bent and tortured laws to find a way to say "well, maybe if you cut us in". It's the worst possible outcome.
Professionals Still WinThese services are being pitched as ways for "regular people" or "hard working families" to make "extra money" or, in the inevitable press releases, to "make ends meet".
But these are cherry-picked anecdotes, and the reality is the professionals are rolling in and will dominate the space. Some hotels are already putting some rooms up. There are already cases where traditional rental units are being yanked off the market for far easier and more lucrative "sharing". The people who do this full time are thrilled - less regulation, less oversight, less hassle, more money.
Same goes for the car services. Not everyone has an Uber Black-ready ride. I guess you can always strap a moustache on and go on Lyft. Still, the closer you already are to professional grade at what you do, the more business you're going to get.
Ultimately, this economy will be like any other economy. Aside from a few outliers, the winners will be companies who leverage resources you don't have to push you to the margins.
Even if you "win", it's still a far cry from an actual living.
Reputation is literally "what a bunch of other people say or believe about something". In other words, it's not the truth, it's Family Feud.
Reputation can be easily gamed by those with a lot of cash and few scruples. Think about the problems with eBay, or the accusations of extortion or gaming leveled at Yelp. Now imagine those weapons being trained on you, because the guy you took to the airport wants a discount.
It will be bad enough when you can no longer trust the reputations of the services or businesses you patronize through these new apps (because they're paying firms to game up their scores).
It will be worse when or if you decide to participate in this new economy yourself, and find yourself with no reputation when you start out (if you're lucky), or more likely, with a negative reputation built on terrible and totally false feedback.
As Joan Jett said, "I don't give a damn about my bad reputation". But in the brave new world of the sharing economy, you won't be able to participate casually. You'll either be completely excluded as a buyer or seller because you have no reputation, or you will have to invest significant time and effort into "reputation management", and the sketchy, shady world of borderline extortion that accompanies it. (Note to self: next million-dollar idea is "Better Business Bureau", but for people).
Managing your public reputation is different from investing time in actually being a good customer or vendor. You will be expending resources simply to adjust what other people think of you, or what other people think about what other people have thought about you.
It's inefficient, and it's creepy.
For example, here's a new app that lets you avoid neighborhoods with a bad reputation. People are saying it is racist, partially because it is based on reputation and not facts (though I suspect it probably doesn't matter where the "data" comes from).
Go read any site built on reviews. There's always someone with a one-sided tirade about how someone done them wrong.
Shadow WorkIn 1981, Ivan Illich coined the term "shadow work" for unpaid labor in the form of self-service. The classic example is self-checkout at the supermarket. This is a job that (until recently) people were paid to do. When you choose self-checkout, you are doing that job yourself, for free. The workers don't get paid. And you don't get paid for performing said labor. Once you start looking for shadow work, you will see instances of it everywhere.
The new sharing economy takes shadow work to a new level. Now it is not enough to own or have something like a place to sleep or a form of transportation. Now you must become a rental agency for said assets, or you'll be "missing out".
How do you feel about that? Only the very wealthy will be allowed the luxury of owning things and not renting them out to strangers on the side. The slightly wealthy will hire people to manage the renting for them. It's still work, either way.
You can expect some...interesting experiences, or at least memorable ones from your new job(s).
From Optional to MandatoryIn the post-World War II economy, some households became 2-income families. These families enjoyed some prosperity relative to single-income folks, for obvious reasons. And for several decades, this was a path families could use to add greater flexibility or wealth.
But over time, the world changed and this became expected, and then for many, required. And one day, people realized that instead of having "one job to stay afloat, and one job as backup", they had "two jobs required to stay afloat". No backup. Now you're at risk all the time - you need both people to stay healthy and working.
The two-income household became mandatory, not optional.
This is the future of the sharing economy for many, especially at the lower end of the economic spectrum. You'll be balancing multiple part-time jobs just like today, but now you'll also be balancing "sharing" any asset you can get your hands on and maintain.
And you'll be competing against the professionals (who will be more experienced, more skilled, and have lots more positive reviews) in an unregulated, reputation-based economy. Good luck!
The End of PrivacyJust when I thought it couldn't get worse, I read this article. The author understands (and shares) the concerns I am stating here. However, they come to a different and somewhat more disturbing conclusion, which is that you might as well rush out there and embrace all that shit, and get ready for the trolls, because once they've doxxed you and are calling your house and harassing you 24/7 online, you'll be stronger, baby!
And once we've all given up privacy and are sharing everything we do with the entire wide world, well, then the world will just be a way better place, right? No. Not at all.
Aside from a complete loss of privacy, you'll also be facing the entire world as a mob all the time. Large mobs are not known for tolerance, clear thinking, or standing up for the outsider. They're violent, reactionary, and frequently target the wrong things for the wrong reasons. And now they're your judge, your banker, and even your boss.
The Jim-JamsPerhaps it's just a passing fad. Maybe a few more bad stories and things will correct a bit. The sharing economy will be constrained and fill some market niches without swallowing everything.
I don't know. Maybe people want to pay $470 for an 11 mile cab ride during a period of peak demand.
But in America, where poverty is frequently framed (if not perceived) as a deficiency resulting from laziness, people will argue the best solution to poverty is to simply make it easier for everyone to work harder, and in ever "innovative" ways. That has not worked out so good yet for the workers, and has become an excuse for the plutocrats to become wealthier, even as we all work longer and harder for less pay. The thought of that mindset reaching further into our cars, our homes, and our very lives is chilling.
Musicians and other artists have seen what happens when big business shows up with a package marketed as "sharing". How did that work out for them?
The new sharing economy companies are directly and indirectly attacking industry regulation. Maybe you think that's a good thing. Maybe a little of it even is. But I would prefer that we all have a voice in those regulatory changes. Those laws were all passed for a reason, and I'd trust We The People over any of these companies any day of the week.
The new sharing economy gives me the jim-jams. It won't be optional. It will become compulsory, both to stay afloat, and because not participating will starve you of precious "reputation". Without avid participation, you will enter a downward spiral.
Participation itself will erode your autonomy, your privacy, and your ability to be yourself. What is at risk? Literally your life, liberty, and pursuit of happiness.
Gotta go, my Uber is here!