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?

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

  1. […] Thorough analysis by Tom Slee in Jacobin of the controversy surrounding municipal regulation of short-term rental-by-owner and ride-share companies, something I’ve discussed, albeit more briefly and considerably less diplomatically. […]

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