Contribution to GTI Roundtable "On the Sharing Economy"
Juliet Schor’s essay provides a thorough evaluation of the mainstream digital marketplaces that have permissively come to be referred to as the “sharing economy.” These enterprises have been the beneficiaries of a seemingly ceaseless stream of hype and diversionary public relations over the last few years. She is correct to be wary of how this form of exchange (frequently dubbed “Big Sharing”) is evolving, especially given the vast investments that have poured into the leading startups.
Schor highlights the most salient points of criticism regarding the putative sharing economy—exploitation of service providers, amplification of income inequality, expansion of resource utilization, and reallocation of business risks toward more vulnerable parties. It is important to emphasize these dimensions because the notion of shared access has a positive valence among many sustainability proponents, and this fallacy needs to be exposed. By drawing on the appeal that underlies the idea of “sharing,” sponsors have manufactured an impression that these startups are predicated on collaboration, solidarity, and ecological responsibility. This is a grievous misconception. The likes of Airbnb, Uber, and Lyft are not the leading edge of more socially and environmentally efficacious lifestyles, and Schor is right to call them out.
Some of the most pressing questions about the sharing economy involve the endgame, and Schor relates several possible scenarios, though it seems to me that her outlook is premised on an implausible measure of hopefulness. The critical point here is that sharing as currently constituted is mostly a product of venture capital. The aim is to quickly scale up and promptly cash out, so the firms are being impelled to grow at a vertiginous rate. It is, however, useful to recognize that we are still in the relatively early days of this disruptive upthrust. In the language of transition analysis, the incumbents have thus far only reacted tactically, primarily by pressing regulatory authorities to intervene on their behalf; they have yet to respond strategically.
Rather than the social mobilization that Schor anticipates (or at least would like to see), the case of Zipcar likely offers hints as to how this process will play out over the next year or two. After insisting for a decade that it had no interest in the hourly vehicle-rental market, the Avis Budget Group acquired the carsharing startup last year for $500 million. My instinct is that the ridesharing outfits will be absorbed by a major mobility company like First Transit, which owns Greyhound, services hundreds of vehicle fleets in North America, and operates one-fifth of the local bus service and is the largest rail company in the UK. Uber and Lyft could also be attractive targets for UPS or Federal Express inasmuch as all of these firms are essentially transportation-logistics companies.
It also strikes me as conceivable that Airbnb could be an attractive target for one of the major hotel corporations. Hyatt, Hilton, Marriott, and so forth do not manage the businesses that sit under their signage; the mundane work of running the hotels is performed by licensees. It would thus be a small step for these companies to recruit Airbnb hosts into regional consortia under a unified brand. The micro-sized scale of individual accommodations, of course, poses complications, but the problems are not insurmountable. In fact, Airbnb has already recognized that its online rating system is fraught with inconsistency and is thus starting to deploy teams of quality-control inspectors. It is useful to keep in mind that when timeshares initially emerged as a novel form of vacation lodging during the 1970s, the innovation was declared to be the death of destination hotels. The thinking was, why would someone rent a hotel room when she could purchase the space outright and use it for two weeks on a recurring basis? With hardly the blink of an eye, the international hotel chains co-opted the timeshare market for themselves.
In terms of the longer-range prospects of a more legitimate sharing economy, this kind of shakeout (or what in Schor’s terms would be absorption into the business-as-usual economy) might not be altogether bad. As Big Sharing fades into the background, more durable and authentic modes for collaboration might be able to expand into the vacated space. Non-profit organizations with a genuine commitment to equitable and communitarian provisioning could become reliable sponsors of time banks, tool libraries, and clothing and food swaps. These manifestations of the sharing economy exist today, but they are overwhelmed and pale in number and cachet. The progression may turn out to be reminiscent of the history of the library, only much more rapid. The first book libraries (so-called gentlemen-only libraries) were established during the eighteenth century and operated on the basis of commercial subscriptions. For an annual fee, readers could select books to rent from a large inventory, and this model proliferated across the UK and elsewhere. After an extended period of popularity, and a variety of mutations prompted by changing economic and social circumstances (one of which entailed stocking instructional manuals for working-class readers seeking to learn a trade), the for-profit repositories gave way to the public libraries of today.
On a final note, Schor’s observation that the sharing economy is globally significant and likely to evolve in accordance with different cultural traditions is valid. Let us take a brief look at recent developments in Europe. In the latest iteration of a see-saw legal battle, the German judiciary ruled in September that Uber was in violation of licensing laws for its drivers and prohibited the company from operating (in keeping with its cultivated reputation, the firm announced that it would ignore the decision). By comparison, one of the most celebrated expressions of the European sharing economy is BlaBlaCar, an intercity ridesharing service where drivers are only able to collect reasonable expenses from traveling companions (the company also charges a modest commission). In other words, the service is more akin to a community ride-board rather than a commercial taxi. While BlaBlaCar now operates across most of Europe, it presently has no plans to expand to the United States.