The sharing economy is dramatically changing our notion of work, service, and ownership. We are at crucial juncture to even the playing field for all involved.
While I love the convenience of calling up a curbside ride through an App on my phone, and being able to stay in private homes around the world through Airbnb, a recent experience made me see a darker side of the so-called sharing economy, characterized by the reuse of excess goods or services.
“Somebody’s making some extra cash,” I thought to myself when I noticed three tourists boarding a neighboring sailboat at my local marina. Obviously these guys were not planning on sailing—they were just renting a sailboat as a cheap way to spend the night near pricey San Francisco.
I grinned and walked away not giving it much thought until I stepped inside the marina’s restroom the next morning to find it out of toilet paper and a complete mess. Why should I have to deal with the downside of my neighbor’s entrepreneurial endeavor and reap none of the benefits?
I pay a fee to keep those restrooms clean. Is my neighbor passing anything on to the marina for maintenance? I doubt it.
Don’t get me wrong. The convenience and ability to make money using excess goods is an excellent idea. But why should a few make a profit on infrastructure maintained by many?
Sharing the cost but not the profit?
Earlier this year, Techcrunch blogger Josh Constine, called out a series of companies that cleverly capitalize on convenience to the detriment of other businesses.
He called these ventures JerkTech because they don’t really build anything or create jobs. They capitalize on the addictive habit of having everything and anything now.
Need a reservation at that super popular restaurant? Reservation Hop, a crawler that snaps up tables, sells one to you for $5-$10. If no one buys it, the restaurant might miss out but the company loses nothing.
Got a great parking spot on the street that you are about to vacate? You can auction it off through Monkey Parking to the highest bidder. A parking space. On a city street!
Who really takes the risk?
Estimated as a $110 billion industry, companies in the sharing economy have a lot to protect. Look no further than Peers.org, a lobbying organization created by a group of companies in this space whose mission is to grow, mainstream, and protect their industry.
Those are the companies. What about the individuals providing services?
A claim often made by sharing economy advocates is that individuals make extra money off of goods they already own. Ok, but the reality of being a “partner” of these companies in the sharing economy isn’t all roses different.
For example, the Uber car service currently takes a 20 percent commission from its drivers, who also pay their own insurance and gas. Despite Uber calling their network of drivers, “partners,” it does not consult with them when it comes to slashing prices or adjusting commissions.
In fact, UBER drivers have started to protest the company’s pricing policies and profit-sharing arrangements.
As Stanford sociologist Marianne Cooper recently pointed out, risk is being shifted onto workers. Things that were previously benefits of employment—guaranteed work hours, pension, paid vacation time, health benefits—have all but disappeared in the new economy.
One journalist recently took part in this “distributed workforce” with a three-day stint as a Task Rabbit. After spending quite a bit of time cleaning up an apartment, the feedback he receives is discouraging:
“I respect what you are trying to do, and you did an OK job in the time allotted. But frankly, stick to being a reporter.”
For the sake of convenience
The wealth of choices and convenience available to us consumers is unparalleled in history.
A very recent example comes to mind: On the heels of the Apple Watch and iPhone announcement, Task Rabbit reminded us—through aggressive advertising—that all we had to do to get our hands on the iPhone6 was to hire a person through their service to stand in line for us.
These days you can hire expert Ikea furniture assemblers, bread makers, and dog sitters and have them outbid each other for the opportunity of working for you. A new App called Alfred, a personal butler service, will even manage all of these helpers for you so you can keep them straight.
And while this is all incredible for consumers, when does this border on abusive? Just because someone is willing to perform a service at a price doesn’t make it okay.
Although the men and women behind the sharing economy are mostly invisible, many of them have started raising their voices. The most outspoken group are the Uber Drivers, who have already managed to bring about change.
Read the Uber Driver Diaries to find out more about their concerns and challenges.
A role for government in the sharing economy?
Government and regulation: two words that nobody in Silicon Valley ever wants to hear or read about. But the reality is that many services in the sharing economy depend heavily on city infrastructure—and they thrive in urban areas.
It is old news that the taxi industry in San Francisco is hurting badly due to all these new ride-sharing services. In fact, taxi companies are having a hard time finding drivers even though there are 8,500 licensed taxi drivers in the city.
The San Francisco Taxi Association estimates that there are 3,000 Uber-type cars zipping passengers around the city. But what does the city get for fixing potholes? Or ensuring that the disabled can still get access to taxis (Ubers and Lyfts do not accept disabled ride requests)? And if cities provide the infrastructure for these services to thrive, shouldn’t they collect taxes from them as they do from other transportation businesses?
From wholeheartedly embracing the sharing economy to completely shunning it, cities are beginning to come to terms with the fact that this phenomenon is here to stay and that they must find a way to regulate these new economic activities.
All together now!
I believe in innovation and above all I believe there’s a real opportunity to make the sharing economy work for us all.
But let’s acknowledge the reality: We must strike a balance between the needs of companies, workers, and consumers. It’s far too easy to sit back and criticize. And it’s also easy to be blinded by the convenience of it all and turn a blind eye to the downsides. History shows us that innovation is far ahead of our regulatory system; but that’s not a reason to shut down this burgeoning economic activity.
We need to find a way to put in place some guidelines, standards, and boundaries that work for everyone.
When conditions were grim for the US workforce during the industrial revolution, labor unions sprang up to fight for their rights. I can only image that today’s new collaborative workforce will be able to organize and leverage the same technology that powers the sharing economy to have their needs met.