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Sharing Not Always Caring: Problems With The ‘Sharing Economy’

by John Harvey with Marcus Costello
23 April 2015

The sharing economy has the potential to disrupt virtually any industry. Otherwise known as the peer-to-peer economy or collaborative consumption, people share rather than own products or services. Workers respond to on-demand micro-jobs with a smartphone rather than an employment contract. It’s been heralded as a force for good: creating new communities, creating new ways of making money, saving consumers money and saving the environment. But researcher John Harvey is not entirely convinced. He speaks with The Ethics Centre’s Content Producer and Editor, Marcus Costello.

When it comes to disruption, do you think we have a duty to protect those industries that support a large number of low-skilled workers? Here I’m thinking of the threat Uber poses to career taxi drivers.
In the grand scheme of employment woes there are bigger threats to jobs on the horizon than the challenges the peer-to-peer economy presents. I certainly have sympathy for those drivers finding themselves out of work, but I think in about 15 years’ time, there won’t be much need for taxi drivers. Google has already demonstrated the viability of self-driving cars and their recent purchase of Waze, the world’s largest traffic and navigation app, means they’ve got all the data they need. So I think the real threat is the cannibalisation of jobs by one or two enormous companies.
What about employment contracts, or lack thereof for on-demand workers, does that concern you?
These platforms change the way we conceptualise work. You could argue that there has been some social progress made insofar as people can structure their work around their lives in ways the conventional working week hasn’t allowed. You can do a couple of hours behind the wheel as an Uber driver when it suits you, for example. That’s great. But we need to ask ourselves, who benefits most from this kind of arrangement? With this new kind of flexibility comes a raft of issues associated with job security and minimum wage standards.
You mean because on-demand workers aren’t represented by a union?
Right. If you work for a conventional taxi company, say, unions exist to represent your interests as a worker. So we need labour unions to react to the changing status of how we want to work. The idea that people might work with greater autonomy than if they’re tied to employment contracts is a good thing; but with that ‘freedom’ comes risk.
In the UK at the moment in the run up to the election, there’s been a focus on ‘zero hour contracts’. In a similar way to on-demand jobs, it’s a matter of perspective as to whether you think it’s a good thing. More people can have jobs, but less people can be guaranteed a living wage. A White Paper written on the sharing economy in the UK was really positive about its future – I think it goes hand-in-hand with a certain political ideology.

It’s interesting, and perhaps ironic, that the language of sharing – historically invoked by communists and anarchists – is now being adopted by companies that essentially skim profits from a decentralised labour force.

I think it’s interesting, and perhaps ironic, that the language of sharing, which has historically been invoked by communists and anarchists, is now being adopted by companies that essentially skim profits from a decentralised labour force. So you can see how the ‘sharing’ economy is actually a kind of super-charged capitalist development. It relies on people who have very limited opportunities for buying into or influencing the strategic vision of the companies that they’re working for.
So is the “sharing economy” just the “rental economy” by another name?
Yes, I think that’s a fair observation. What we’ve seen, in effect, is that commercial organisations have colonised language that we normally use to mean ‘kindness’ or ‘benevolence’ or ‘generosity’. While there are some platforms that are genuinely devoted to sharing - where there’s actually no money involved - the majority are ‘exchange’ platforms, but they all get lumped together and this is problematic when it comes to drawing up regulation.
At the moment it would seem that the majority of people working in on-demand jobs or ‘sharing’ their things are doing so for a supplementary income - people aren't quitting their day jobs, so to speak...
That’s the case in the UK and I expect it’s similar in Australia. There are more people in the US where the labour market is less reliable who depend more for on-demand work. Airbnb, however, is used by a lot of people to generate primary income.
That makes me think of New Yorkers listing their rent-controlled apartments on Airbnb for more than they pay in rent.  Some commentators have raised concerns that this behaviour could artificially increase rental prices in the broader community. How might Airbnb resolve this – and is it their responsibility?

Airbnb has already attempted to challenge and transform the law, particularly in America.  It views New York, for instance, as a case study of how its business model can overcome regulatory obstacles to become legitimate and socially acceptable. They argue that regular people renting out their own homes should be able to do so. Their defence includes a study conducted in Berlin, which highlighted the local economic impact of Airbnb, which was a contribution of more than $130 million in a single year. Perhaps more importantly though, it argues money spent through Airbnb provides a greater contribution to the local economy than if the money was spent in large international hotel chains.

Money spent through Airbnb provides a greater contribution to the local economy than if the money was spent in large international hotel chains.

Speaking of building real estate, surely the sharing economy is a win for the environment. Airbnb is limiting the construction of real estate, Uber is taking cars off the road and other platforms are taking consumer goods out of production.
That’s a really challenging question to answer because very few examinations of this industry look at the rebound effects. So, for instance, you don’t buy a car, where do you then spend that money? Are you spending that money you save on things that might generate more carbon emissions or exploit more resources? Is the earth really in a better state because you rent one resource instead of buying it? I’m not convinced it’s that simple.

John Harvey is a senior lecturer in the Business School at Nottingham Trent University. His broad research interests include non-monetary exchange, altruism, gift giving, and interdisciplinary issues in economic anthropology. Image: Susie Cagle.