Posted by: karisyd | June 26, 2016

Principles of the Sharing Economy

This is an edit of a video talk I gave last year for a course on Sustainable Development at The University of Sydney Business School – see video at the end of this article

As the name suggests the “sharing” economy is all about sharing. The basic idea is that, as a user of these services, I don’t have to own everything, I can share things with other people in the economy. I can participate and benefit from other people sharing their assets, products, service or their time with me.

There are many different examples, businesses that claim to be part of the sharing economy. It is worthwhile taking a closer look at the phenomenon and see what we might truthfully call “sharing” (and what not).

For example, are there services that we call sharing (or that claim to be all about sharing), but that are not actually about sharing at all? I am going to argue that there are actually two different notions of the sharing economy.

Some Examples

An Australian company called TuShare set itself the task to reduce waste and landfill (note that the company no longer exists, but the idea is still a good example). The idea was that, if we don’t need a certain item anymore, say a bike, a camera, a piece of clothing – we can make it available to a community of people registered on the platform who would then be able to receive this item and share their own items. This is well and truly a sharing idea.

There are other, similar examples, such as MamaBake, run by parents who join forces to cook together; who cook large batches of food, and then share this in the community with other people, who will then in turn, cook on a different weekday for the community.

On the other hand, we are all aware of examples like Uber and Airbnb, which are often discussed as the front-runners in the sharing economy. The idea here is that as users we share with other people “assets” that we own, like our houses or our cars, because they might sit idle, and might not be used most of the time. If we have spare time we can act as drivers and earn some money “on the side”.

Further examples include TaskRabbit or Airtasker. The idea here is that, if people have spare time, they can take on certain tasks that other people put up on the platform, which they carry out to earn some money on the side. So the asset here, more broadly speaking, is time being shared – that people make available on the platform.

Clearly those examples have certain commonalities, but they also have some very important differences. Let’s look at two main principles that underpin the sharing economy.

Principle 1: Sharing of things and services

The first one, quite obviously, is sharing. The sharing of things, the sharing of what we might call assets, more broadly, such as cars, rooms, time. Using various services people share these assets among each other. But if we look at definitions of the sharing economy and where it came from, where it started out – its roots – it’s an idea that is based on sharing more broadly.

Principle 2: Shared ownership, decision-making, collaboration

The second principle is based on a peer-to-peer, or collaboration aspect, revolving around shared decision making, shared ways of deciding on the rules by which this particular part of the economy is operating, fairness, the greater good, sustainability, reducing waste and alternative ways of organising and doing business. If we look at these principles, we could ask the question (by way of example):

Is Uber actually part of the sharing economy?

First, there is certainly the sharing aspect: people sharing their cars with other people who they drive around. On the other hand though, the peer-to-peer aspect, the collaboration aspect is lacking because Uber is owned and organised centrally. Uber is a commercial entity with a clear profit goal. The actual transactions on the platform are not organised in a peer-to-peer way.

What is also quite noticeable is that, if we look at the conversation around Uber, it’s not so much about sharing itself, but about the convenience the service offers its customers. This individual aspect of Uber is very important, to the point where this is almost defining its narrative now. It’s not about peer-to-peer sharing, about collaboration between drivers at all. In fact, Uber doesn’t quite encourage drivers to talk to each other. Those drivers are individuals, they compete. They provide a service for other individuals.

So the collaborative, the collective, the actual sharing aspect is somewhat lost in the Uber narrative. In the end it is much more about the exploitation of underutilized assets by a central company that incidentally organizes this as a form of sharing among individuals. This however has a very different quality to the second principle I outlined earlier.

The concierge economy

If we take a closer look at this narrative we can see that there’s a lot of other – often smart phone app-based – businesses that have emerged in the market, who claim to be the next Uber, or the Uber of something. Services with which we can outsource picking up parcels from the post office, our washing, or other daily chores to people who have spare time and will take on these tasks. Sharing in these models is very much reduced to: people with spare time “sharing” this time with people who don’t have enough time. These apps bring those two together.

But this is a far cry from the principles of the sharing economy outlined earlier, to the extent that this is model has been called the “concierge economy”. A recent article in the Guardian, for example, makes a good point: this is no longer about sharing, it is about exploitation.

In these examples the sustainability aspect is lost. If we looked at this in a more cynical way, we might say that some of these services are exploiting unemployment, people who have spare time but no access to the primary employment market. But the work arrangement that these apps create can be quite precarious.

What is more, those apps black-box, in a sense, the kind of employment they create. People using these apps, they lodge their tasks, but often they don’t get to see the people who are doing their washing, doing their window cleaning, at the other end of the app. I have heard the term “exploitation economy” being used for this kind of service.

The issue is that these services water down the sharing idea. The moniker “sharing” does not befit these latter cases in my view. Call it “concierge economy” or “on-demand” economy, but Uber hardly embodies the idea or ethics of sharing.


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