The news is full of their names, supposedly the vanguard of a rethinking of capitalism. Lyft, Airbnb, Taskrabbit, Uber, and many more companies have a mandate of disruption and upending the “old order”and they’ve succeeded in effecting the “biggest change in the American workforce in over a century,” according to former Secretary of Labor Robert Reich. But this new wave of technology companies is funded and steered by very old-school venture capitalists. And in What’s Yours Is Mine , technologist Tom Slee argues the so-called sharing economy damages development, extends harsh free-market practices into previously protected areas of our lives, and presents the opportunity for a few people to make fortunes by damaging communities and pushing vulnerable individuals to take on unsustainable risk. Drawing on original empirical research, Slee shows that the friendly language of sharing, trust, and community masks a darker reality.
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About the Author
Tom Slee writes about technology, politics, and economics and in the last three years has become a leading critic of the sharing economy. He has a PhD in theoretical chemistry, a long career in the software industry, and his book No One Makes You Shop at Wal-Mart is a game-theoretical investigation of individual choice that has been used in university economics, philosophy and sociology courses. He blogs at www.tomslee.net.
Read an Excerpt
The normal way in which communities provide shared goods is through government, from municipal swimming pools and soccer fields to public transit to libraries and much more, but there are no government groups in the list. There is no representation among Peers partners from the world of food co-ops, worker co-ops, lending libraries, allotment groups, or other groups involved in non-digital community-sharing initiatives. Zipcar is included (shared access to a vehicle), but the Youth Hostel Association is not (shared access to accommodation). There are many organizations that seem to fit into Sharing Economy mandate, taken literally, but which have no link to Peers, whether they be equipment rental shops, second hand stores, boat rentals, or even the big car-rental companies.
But as you may have guessed, the boundaries of the Sharing Economy are not arbitrary. Almost all the members of Peers, and all the groups mentioned by Botsman and Owyang are technology-focused organizations. If Sharing Economy companies define the name, then it is clear that the Internet is a central part of their self-identification.
Strangely, considering the language of altruism and generosity that is so often used to describe it, the Sharing Economy is also overwhelmingly made up of commercial organizations rather than non-profits. Out of Peers’ 75 partners, over 60 are for-profit companies.
It is the commercial embodiment of author Steven Johnson’s idea of the “peer progressive.” In his recent book Future Perfect, Johnson says: “When a need arises in society that goes unmet, our first impulse should be to build a peer network to solve that problem.” To build a “peer network” means, first and foremost, to build an Internet software platform: a web site and/or mobile application on which consumers and service providers can create a presence and exchange goods and services.
The picture looks different again if, instead of focusing on the number of organizations in each category, we look at the amount of funding the companies have received. Over 85% of the funding for Peers partners went to Californian companies: despite the sprinkling of partners from around the globe, the money shows that the Sharing Economy is predominantly a Silicon Valley phenomenon. (This is one reason why, although I am Canadian and British, this book focuses on American events and debates.)
Following the money also shows that the Sharing Economy is a narrower phenomenon than the talk suggests. Three kinds of service dominate: hospitality (43%), transport (28%), and education (17%). In the world of hospitality most of that funding has gone to one company: Airbnb, which in summer 2014 had raised $800 million since 2009, with the majority coming in the previous 12 months. In the world of transport, the leading fundraiser was Lyft, which had raised just over $300 million, most of that in April 2014. For all the talk of neighbors swapping power drills, these are the kind of companies that are making waves and which are leading the Sharing Economy.
Since summer 2014 the picture has become even more exaggerated. As of July 2015 Airbnb has taken its funding to a massive $2.3 billion. Lyft’s fundraising had also reached $1 billion, and its competitor Uber (not a Peers partner) had raised no less than $5.9 billion, and may be looking for more.
What this all comes down to is that, while the Sharing Economy is often presented as a diverse set of commercial and non-commercial initiatives around the world (from tool-exchange co-ops to pet-sitting and so on), this presentation is a bit misleading. The Sharing Economy is almost entirely a small number of technology firms backed by large amounts of venture capital.
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