Sunday, August 30, 2015
This afternoon while Crow and I were chatting about this and that the subject of the sharing economy popped up as it often will. It does, doesn't it? Don't we tell our children to share their toys; don't we share a plate of cookies with a friend; don't we share space when we chat with an old friend? Sharing happens all the time as a natural part of life. You can imagine my surprise when Crow informed me that all the above is not what is meant by the words 'the sharing economy'.
Crow: The problem with these 'sharing economy' companies is that although they hold themselves up to be champions of the people they are actually exploiters. Renting isn’t the same as sharing. When someone pays someone else to sit on the back seat of their car they've rented it out. They've rented the person who drives the car. They rent a couch for the night or a spare bedroom or an apartment when the owner or official renter is away. There is no sharing in the 'sharing economy'. In actuality, what they've undertaken is to participate in a black market economy.
me: Aren't these companies better, cheaper, more convenient?
Crow: Why are they cheaper and more convenient? It's because they bypass normal regulatory frameworks. The laws of a country. Where do laws come from and why do they arise? Well, the law follows and reacts to circumstance. The laws on installation of heated water systems for example arose after several disasters with boilers during the Victorian era. The laws on regular maintainence of fire safety equipment have arisen similarly. Hotels and other public places comply with those laws in order to protect people. Air BnB is cheaper because those who host on it do not have to comply as they are private residences, therefore they avoid legitimate overhead costs.
me: But people who provide these services need the extra money.
Crow: These businesses can only succeed if the people undertaking the work break the law and/or have no employment rights or protection. For example - Uber only works because the company doesn't care about disability legislation or taxi licensing laws. Air BnB only works because people renting their houses out ignore the raft of legislation that hotels and B&Bs have to comply with.
If the regulators get involved because these microbusinesses are breaking the law, the sharing economy company either stands back and says 'we are only an internet platform' or campaigns that the 'old economy' is trying to stifle personal freedom while conveniently forgetting the fact that much of the legislation is in place to protect the customer.
While putting across the view that they are small, hip, entrepreneurial companies, they are in fact bankrolled by companies like Google and Goldman Sachs and are simply a computer platform with a very good legal department and extremely well-funded Government lobbyists. Posing as martyrs of progress and bastions of the free world, all they are is a company trying to create a global monopoly with little regard to any of the social effects their technology entails. The Ubers of this world are just strip-miners. Posing as some kind of 'champion of the people' they use the fruits of the public realm, ie. the internet, public education, roads, etc, to diminish the wealth of that same public realm by killing jobs and thus eroding the tax-base.
me: I guess I won't be putting that 'Couch to Share - One Night Only' sign in the window. Goodness knows what laws I'd be breaking with that one.
With thanks to Olivier Blanchard.
note: Hope you won't mind seeing a reprise of Crow's Sanctum picture from a few years ago. It's still one of our favorites.