The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism

by Arun Sundararajan

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Overview

The wide-ranging implications of the shift to a sharing economy, a new model of organizing economic activity that may supplant traditional corporations.

Sharing isn't new. Giving someone a ride, having a guest in your spare room, running errands for someone, participating in a supper club—these are not revolutionary concepts. What is new, in the “sharing economy,” is that you are not helping a friend for free; you are providing these services to a stranger for money. In this book, Arun Sundararajan, an expert on the sharing economy, explains the transition to what he describes as “crowd-based capitalism”—a new way of organizing economic activity that may supplant the traditional corporate-centered model. As peer-to-peer commercial exchange blurs the lines between the personal and the professional, how will the economy, government regulation, what it means to have a job, and our social fabric be affected?

Drawing on extensive research and numerous real-world examples—including Airbnb, Lyft, Uber, Etsy, TaskRabbit, France's BlaBlaCar, China's Didi Kuaidi, and India's Ola, Sundararajan explains the basics of crowd-based capitalism. He describes the intriguing mix of “gift” and “market” in its transactions, demystifies emerging blockchain technologies, and clarifies the dizzying array of emerging on-demand platforms. He considers how this new paradigm changes economic growth and the future of work. Will we live in a world of empowered entrepreneurs who enjoy professional flexibility and independence? Or will we become disenfranchised digital laborers scurrying between platforms in search of the next wedge of piecework? Sundararajan highlights the important policy choices and suggests possible new directions for self-regulatory organizations, labor law, and funding our social safety net.

Product Details

ISBN-13: 9780262533522
Publisher: MIT Press
Publication date: 04/21/2017
Series: The MIT Press
Edition description: Reprint
Pages: 256
Sales rank: 781,606
Product dimensions: 5.90(w) x 8.90(h) x 0.90(d)
Age Range: 18 Years

About the Author

Arun Sundararajan is a Professor at New York University's Stern School of Business. A recognized authority on the sharing economy, he has published op-eds and commentary in such publications as Time, the New Yorker, the New York Times, Wired, Le Monde, Harvard Business Review, and the Financial Times.

Table of Contents

Author's Note and Acknowledgments xi

Introduction 1

Airbnb-Design Your World Right 7

Lyft-Hospitality in Transportation 9

The Rise of the On-Demand Workforce 10

BlaBlaCar-Global Infrastructure Built on Trust 12

The Melding of Commerce and Community 13

La Ruche Qui Dit Oui-Redefining Perfection 16

How to Read This Book 17

I Cause 21

1 The Sharing Economy, Market Economies, and Gift Economies 23

What Is the Sharing Economy? 26

How Key Early Thinking on the Sharing Economy Evolved 30

Is the Sharing Economy a Gift Economy? 35

The Sharing Economy Spans the Market-to-Gift Spectrum 38

Accommodation 38

Funding 41

Service Platforms 43

The Sharing Economy and Human Connectedness 44

2 Laying the Tracks: Digital and Socioeconomic Foundations 47

Precursors: eBay, Craigslist, Kozmo 48

Digital Determinants of the Sharing Economy 52

Three Fundamental Forces 52

The Consumerization of the Digital 54

The Digitization of the Physical 55

Decentralized Peer-to-Peer and the Blockchain 58

The Digitization of Trust 60

Socioeconomic Drivers of the Sharing Economy 65

3 Platforms: Under the Hood 69

Markets and Hierarchies 70

How Digital Technologies Reorganize Economic Activity 72

Are Platforms a New Firm-Market Hybrid? 77

Gansky's "Meshy-ness" Grid 79

Botsman's Four Quadrants 82

Owyang's Honeycomb 82

4 Blockchain Economies: The Crowd as the Market Maker 85

Understanding Decentralized Peer-to-Peer Exchange 87

Bitcoin 87

OpenBazaar and Smart Contracts 91

Decentralized Service Platforms 94

Value Creation and Capture in Decentralized Exchange 95

Attention, Search, and Discovery 96

Trust and Reputation 97

Logistics 98

Some Challenges and Opportunities 99

II Effect 103

5 The Economic Impacts of Crowd-Based Capitalism 105

The Trouble with GDP 109

Additional Measurement Challenges in the Digital Economy 111

Four Key Economic Effects 114

Altering Capital "Impact" 114

Economies of Scale and Local "Network Effects" 117

Increased Variety = Increased Consumption 121

The Democratization of Opportunity 123

A Deep Dive into Peer-to-Peer Rental Markets 125

6 The Shifting Landscape of Regulation and Consumer Protection 131

Why Regulation Still Matters 138

Information Asymmetry 139

Externalities 140

Blurring of Boundaries 141

The Evolution of Regulation: Trust, Institutions, and Brands 142

A Historical Example: The Maghribi Traders 142

Economic Institutions and Brand-Based Trust 144

Where the Sharing Economy Is Taking Regulation 146

Future Regulatory Models 150

Peer Regulation 151

Self-Regulatory Organizations 152

Data-Driven Delegation 155

7 The Future of Work: Challenges and Controversies 159

"Freelanceability," Off shoring, and Automation 162

Off shoring 162

The Second Machine Age 164

The New Digitally Enabled Workforce 167

New Marketplaces 167

New Generalists 171

Immediacy of Labor Supply 172

Task Economies 173

Invisible Work 175

8 The Future of Work: What Needs to Be Done 177

Independent Workers and Dependent Contractors 178

The New Social Safety Net 187

How Entrepreneurial Is Your Platform? 192

Incubation 192

Independence 194

Infrastructure 195

Sharing Ownership in the Sharing Economy 196

Data Darwinism 200

9 Concluding Thoughts 203

Notes 207

Index 229

What People are Saying About This

Hal Varian

Information technology is disrupting a host of industries including transportation, hotels, banks, and marketplaces. The very nature of work is changing. Sundararajan offers an insightful guide to the forces shaping our economy today—and tomorrow.

Erik Brynjolfsson

Fortunes have already been made in the sharing economy, yet the biggest impact on business and our daily lives is yet to come. There's no better guide to this transformation than Arun Sundararajan's book.

Clay Shirky

Sundararajan has taken all the loose talk about the sharing economy and given it a rigorous and readable treatment. He makes it clear that there is no one model for these new economic forms, but that taken together, they represent a profound shift in how we think about everything from utility to capital to labor to employment.

Endorsement

Sundararajan has taken all the loose talk about the sharing economy and given it a rigorous and readable treatment. He makes it clear that there is no one model for these new economic forms, but that taken together, they represent a profound shift in how we think about everything from utility to capital to labor to employment.

Clay Shirky, author of Cognitive Surplus and Here Comes Everybody

From the Publisher

Information technology is disrupting a host of industries including transportation, hotels, banks, and marketplaces. The very nature of work is changing. Sundararajan offers an insightful guide to the forces shaping our economy today—and tomorrow.

Hal Varian, Chief Economist, Google

Fortunes have already been made in the sharing economy, yet the biggest impact on business and our daily lives is yet to come. There's no better guide to this transformation than Arun Sundararajan's book.

Erik Brynjolfsson, co-author of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

Sundararajan has taken all the loose talk about the sharing economy and given it a rigorous and readable treatment. He makes it clear that there is no one model for these new economic forms, but that taken together, they represent a profound shift in how we think about everything from utility to capital to labor to employment.

Clay Shirky, author of Cognitive Surplus and Here Comes Everybody

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