The “Share Economy” is a Stinking Fraud, but It’s Not Inevitable

Andrew Leonard at Salon makes a number of good points about lobbying efforts by ride- and housing-share startups to defeat municipal regulations. Now, although ride sharing companies must carry liability insurance and conduct training and background checks on drivers, they are emerging in San Francisco as a legit competitor to traditionally licensed taxi companies, at least for the smartphone set. And in the no-longer gritty Silver Lake neighborhood of L.A., an outfit called Peers helped to pack a neighborhood council meeting with AirBnB supporters who denounced pending legislation that would ban short-term leases of private residences.

Supporters are adamant that these are backward-looking regulations that are stifling the kind of innovative programs that will usher in the urban utopias of the future: greener, less hierarchical, and more livable.

The problem, as Leonard astutely points out, is that the same “sharing” applications that allow the young, affluent, and connected to call car services and make short-term sublets in hip neighborhoods across the country are owned by capital-flush investors.

But maybe, first, we should stop calling what’s happening the “sharing economy.” What Silicon Valley and its media lapdogs call the “sharing economy” does not correspond to what any 2-year-old would understand as “sharing.” Airbnb is a platform for facilitating short-term subletting. Uber and Lyft are platforms for hiring taxi drivers, or some pink-mustachioed simulacrum thereof. The connections made between individuals are perhaps more horizontal — more “peer-to-peer” — than the traditional Holiday Inn or Yellow Cab arrangement, but they are still fundamentally transactional relationships. We aren’t “sharing.” We are purchasing services from each other.

While these applications are notionally horizontal, relying on networks to distribute services, it’s much more accurate to describe them as very very squashed pyramids. Somebody’s still on top. And that’s where the money goes, as

Marc Andreessen and Peter Thiel and Google are going to make a killing while the rest of us drive each other around town for rock-bottom fees? Wonderful!

I admire Leonard’s willingness to call out the venture capital money behind these endeavors and their hypocritical appropriation of communitarian ideals, and he makes one crucial point. For ride-sharing networks to truly be cooperative they should serve the interests of the people who are making a living providing the rides, rather than their bosses. But the capital flowing into Lyft and Uber are helping to undercut the operation of anything like worker-organized cooperatives by getting out in front of the app and smartphone side of the business. It’s not a coincidence that the labor practices of these companies have come under fire from the Sustainable Economies Law Center. Leonard nails it here:

 And that’s where the embrace of idealistic rhetoric by these companies becomes so obnoxious. We are being played by these companies, made to feel like we are doing a good thing by reducing greenhouse gas emissions when we eschew buying a car in favor of relying on car-sharing, or help someone struggling to pay the mortgage by renting their spare bedroom through Airbnb. But what we are really doing via our penny-pinching is helping to concentrate even more wealth in the hands of a smaller and smaller group of investors.

And you can bet your bottom dollar that the regulatory changes that we see in municipalities will be primarily designed to suit the needs of corporate interests and not worker-owned cooperatives.

But as clear as he is on the downside of the sharing economy, Leonard is oddly willing to treat it as inevitable, chalking its spread up to the

Irresistible momentum [that] accrues when consumer demand intersects with new technologically enabled possibilities and ample investment capital.

Why irresistible? Why is “the  tune of millennials getting what they want” something that “we’d better get used to,” even though there are far more of us who are too old, poor, or old-economy to join that charmed circle? And why are aren’t the millennials who want to rent an affordable apartment entitled to get what they want, rather than lining up for the leftovers when AirBnB helps to subsidize the mortgage payments on condo conversions? As Thomas Bender has quite effectively argued, when people in now-distant times viewed their city governments as instruments for public problem solving, rather than as footservants of capital, those city governments accomplished tenement laws, rent controls, tenant rights, and comprehensive and regulated transportation networks. Plus sewers and waterworks and power plants. People even made living wages working to provide these public services! Why not again? Why not now? Even if they’re richer, are the nerds behind AirBnB tougher than a Mott Street slum lord? If Richmond, California can take on Wall Street and the mortgage industry, who’s afraid of a car with a stupid mustache?

Emergency Management for Spite and Profit?

From Gin and Tacos:

We’ve all realized by now that the 1987 Paul Verhoeven splatter-fest RoboCop was actually a documentary about how Detroit would look in 25 years; there may not be police-robots but Omni Consumer Products is getting ready to take over. I hadn’t previously made the connection with Total Recall, though. It didn’t seem plausible that some unelected sociopath would be able to turn off public utilities out of spite here in the United States. As a dystopian literary device, sure. But in real life? In the USA?

Well it turns out that last week’s power outage in Detroit was done intentionally by the Rick Snyder-appointed “city manager” or someone in that office. It appears that on one of the hottest days of the year, “We did start calling our customers prior to taking them down and asking them to turn off air conditioners, but they weren’t responding as fast as we would like them to so we had to send them a strong message by turning the power off.” In the video, the speaker laughs a lot while explaining this. The power was down for four hours without warning.

I’ve written about the Detroit bankruptcy in the past, and was primarily concerned with the prospects of pension funds being looted to cover the massive fees Detroit incurred for playing the  Wall Street debt swap game during the Kilpatrick era. I hadn’t really considered this facet of emergency management–the ability to cut, withhold, or terminate services for spite and profit. But if you can supplant appointed managers for elected officials, why waste the chance to manufacture an infrastructure and service crisis and privatize more?

By the way, the Detroit Free Press has a good look at Detroit’s financial history. The takeaway? Coleman Young was a fiscal conservative and had the city in relatively good shape financially, considering that every white resident with a pulse was leaving town and white politicians were pocketing the silver on the way out of city hall. While the debate has focused on debt and city worker pensions (and for sure the city dropped the ball on controlling those costs), Detroit’s bankruptcy was driven in the long run by the collapse of the city’s tax base, but leadership has helped too:

Missing chance after chance: Contrary to myth, the city has not been in free fall since the 1960s. There have been periods of economic growth and hope, such as in the 1990s when the population decline slowed, income-tax revenue increased and city leaders balanced the budget. But leaders failed to take advantage of those moments of calm to reform city government, reduce expenses and protect the city and its residents from another downturn.

It’s important for historians to try and flesh this political history out a bit. As influential and important as works like Tom Sugrue’s The Origins of the Urban Crisis are, they tend to support (against the author’s intentions) a view of white flight as an inexorable and inevitable. The racism embedded in the market behavior and cultural values of whites who fled Detroit is of course relevant to understanding the city’s problems, and it accounts far more than most people in this “post-racial” age would like to admit for the state of Michigan’s harsh treatment of the city. But it’s not wholly determinative of Detroit’s past or its future. History is about recognizing structures of constraint and opportunity and the contingent moments of action and decision within those structures that open some possibilities and close others, not about a fatalistic story of decline.


What Cities Used to Look Like

Smithsonian has posted a series of interactive maps that allow users to examine the landscape of several American cities in the 19th Century.

The spyglass view shows an old plat map beneath the present-day satellite view. The maps by themselves don’t provide a high degree of visual information, but they do highlight features–streets, alleys, railroad lines, water, open space–that have been remade.

Sorry about the Goldman Sachs ads on the page. I guess the Smithsonian’s gotta get funded somehow.