The sharing economy is born with arguments, preconceptions, and fairy tales. Those who are neutral call that arguments and supporters of the sharing economy call it preconceptions. The opponents call the sharing economy a fairy tale. In my earlier blogs, I mentioned that the sharing economy is not a new business model but a social movement; and it can serve to solve some social issues if we utilize it properly. However, some professions disagree with the idea of the sharing economy while some think the sharing economy can be a good way to build up a green economy worldwide.
So the issue is, is the sharing economy a wolf in sheep’s clothing or should the sharing economy be promoted?
The size of the sharing economy worldwide is expected to be 335 billion U.S. dollars by 2025 from only 15 billion dollars in 2014 according to Statista. In the United States, 44.8 million adults were using the sharing economy services in 2016 and this number will increase to 86.5 million by the year 2021. Behind these huge profits, many sharing economy countries exist and cover every need in urban people’s life. As for now, there are 100 and more sharing economy companies. The main five categories are transportation, accommodation, space renting, good, and labor. Among that, transportation and accommodation are more popular. Two acknowledged leaders are Airbnb and Uber. Airbnb is an online marketplace arranging short-term lets and it is now the most successful example of the sharing economy; it was valued more than 31 billion dollars in 2017. Airbnb builds its “kingdom” worldwide without owning real estate listings in more than 192 countries. Besides, Uber is a ridesharing company that provides peer-to-peer driving services, food delivery, and a micromobility system with electric bikes and scooters. In most of the major cities in the world, we can frequently find Uber or its similar products which provide peer-to-peer driving services.
We are not sure when did the sharing economy birth but it has been widely discussed in the last decade till now. In a famous book “What’s Yours Is Mine: Against the Sharing Economy“, the author Tom Slee talks about many reasons that the sharing economy is evil by analyzing some main sharing economy services. The three main issues he found were about employment, investment, and intention.
In Chapter 5 of the book, Slee discusses the first company in personal and home services, TaskRabbit. TaskRabbit is designed as an online marketplace to connect neighbors to help out neighbors. For example, if you need to fix your lightbulb in an emergency, you can simply go to TaskRabbit and get your neighbor to help by paying a service fee. Meanwhile, your neighbor can get some extra money. However, the problem here is, for those who are willing to provide such a service are mostly unemployed people. They worth more but they are not guaranteed to get minimum wages even though working hard on heavy tasks. The initial intention of TaskRabbit is brilliant, to let neighbors help neighbors. However, as becoming a job, it seems unfair to have workers working hard while the company does not need to guarantee them minimum wages, sick hours and health insurance. Similarly, Edward t. Walker says so in his journal article “beyond the rhetoric of the ‘sharing economy’ ” in Contexts “… ‘be your own boss’ light, but it’s worth noting that contractors aren’t offered the health and social safety-net benefits of conventional workers.” Yet they are independent contractors; taking the whole market, the existence of these sharing economy companies took jobs out of the traditional market but did not create as much as jobs.
Also, as I mentioned in my second blog, Uber drivers are getting themselves from independent contractors to formal employers which makes the story of Uber different. The California Assembly Bill 5 (AB5) passed in fall 2019 required companies like Uber and Lyft to treat contract workers (drivers) as employees. It is great for full-time drivers since they can get their employee welfare. We don’t know yet what will this bill acts on to consumers and the whole market. Maybe the price will increase and maybe not. Unlike other sharing economy services, Uber and Lfyt set prices by running calculations which means drivers cannot adjust the price. Nonsuprisly, Uber is currently testing a new feature in California that allows some drivers (in 3 airports) to set their rates so that drivers can have more control as independent contractors (Uber still wants to keep as much as contractors they can) according to a news report in NPR. For other sharing economy companies, both the service providers and consumers have the ability to be price takers (which means their actions can affect the market price). Thus, Tom Slee analyzed that many sharing economy companies look forward to Adam Smith’s idea of the “invisible hand” of the free market and use that as an excuse to ignore some overpriced situations and the minimum wage issue.
Furthermore, Slee indicates that “The main impulse that drove the writing of this book was a sense of betrayal: that what started as an appeal to community…and sharing, has become the playground of billionaires, Wall Street, and venture capitalists extending their free market values ever further into our personal lives.” (Slee, 161) Otherwise speaking, Slee againsts the sharing economy as an incarnation of capitalism, a tool that been played by rich. He mentioned that the sharing economy brings tones of jobs to software engineers and computer engineers but not ordinary. Relative to this issue, another issue is about the story of the sharing economy. Look through all the stories of the sharing economy, one connection found is about sharing makes the world better. A sharing economy maginze, Shareable, believes that “The sharing transformation shows that it’s possible to govern ourselves, build a green economy that serves everyone, and create meaningful lives together.” In another world, they believe that sharing economy means to have consumers in hand of our economy and make everyone better off. The story of the sharing economy is perfect as a fairy tale in the opponents’ interpretation. There are many biases, however, in the sharing economy system.
The sharing economy, nowadays, is presenting in many ways in our daily life. It changes the way we take a ride, get some food, rent a place, walk a dog and even more. The reason that we care whether the sharing economy is making us better off or not is not just because we are the participants, but this topic affects the whole world. It doesn’t matter if we ever took Uber or not, our life is relative to Uber already. To care about the world economy is to care about your own life.
The issues named above are the tip of the iceberg. As the sharing economy extended and developed, more and more disadvantages are shown. In this issue series, we separated some main issues; but is the sharing economy not worth? Is it a wolf in sheep’s clothing? The next issue series will continue to present more on this topic.
Reference:
- Lock, S. “Sharing Economy Statistics.” Statista, 9 Aug. 2019, http://www.statista.com/statistics/289856/number-sharing-economy-users-us/.
- “What’s Yours Is Mine.” What’s Yours Is Mine: Against the Sharing Economy, by TOM SLEE, OR Books, New York; London, 2017, pp. 161–178. JSTOR, http://www.jstor.org/stable/j.ctv62hf03.12. Accessed 1 Mar. 2020.
- Walker, Edward t. “Beyond the Rhetoric of the ‘Sharing Economy.’” Contexts, vol. 14, no. 1, 2015, pp. 15–17., http://www.jstor.org/stable/24710514. Accessed 1 Mar. 2020.
- “Assembly Bill No. 5 CHAPTER 296.” Bill Text – AB-5 Worker Status: Employees and Independent Contractors., California Legislative Information , 14 Sept. 2019, leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB5.
- Rodd, Scott. “Due To New California Law, Uber Allows Some Drivers To Set Their Own Rates.” NPR, NPR, 28 Jan. 2020, http://www.npr.org/2020/01/28/800437791/due-to-new-california-law-uber-allows-some-drivers-to-set-their-own-rates.
- Majaski, Christina. “Dispelling Mysteries About the Invisible Hand.” Investopedia, Investopedia, 29 Jan. 2020, http://www.investopedia.com/terms/i/invisiblehand.asp.
- “About.” Shareable, http://www.shareable.net/about/.
NEW ERA: Sharing Economy and its post products 