The sharing economy has always been a scam • Good Non profit


Written by Susie Cagle via,

& # 39; Share & # 39; had to save us. Instead, it became a Trojan horse for a precarious economic future …

Founded in 2014, Omni is a startup that allows users to store and rent their less used items in the San Francisco Bay Area and Portland. Backed by around $ 40 million in venture capital, Omni announces it on its website they "believe in experiences about things, have access to property, and live lighter instead of being burdened by our possessions."

If you are in the Bay Area, you can currently rent a copy of The Life-Changing Magic or Tidying Up from Marie Kondo at "Lan" for the low price of $ 1 per day; "Charles" rents a small framed lithograph for $ 10 a day; and "Tom" rents a copy of the movie Friends With Benefits (68 percent on Rotten Tomatoes) on Blu-ray for just $ 2 a day. These prices do not include delivery and return costs for the Omni trucks traversing the city and starting at $ 1.99 each way.

In 2016, Omni & # 39; s CEO and co-founder Tom McLeod said so "Borrowing allows Omni members to use their & # 39; sleeping & # 39; assets well in their community. & # 39; Fortune Omni said the same year "Can create a real & # 39; sharing economy & # 39;" For a while, the principles of the sharing economy have been at the forefront of Omni's model: it promised to activate un-deployed resources to preserve a healthier world and build community confidence. In 2017, McLeod said, "We want to change ownership behavior on the planet."

Only three years later, those promises seem to pursue the second goal of profit. In 2019, the Omni field can be summed up by advertisements adorned with their vans: "Rent things from your neighbors, earn money when they rent from you!"

For years, the sharing economy was set up as an altruistic form of capitalism – an answer to consumption went wild. Why own your own car or electric tool or copies of it The life-changing magic of cleaning up if everyone did nothing for most of their lives? The sharing economy would allow strangers around the world to benefit from the usefulness of each asset for the benefit of all.

In a 2010 TED Talk, sharing economy winner and author Rachel Botsman argued that the technology-based sharing economy "could mimic the ties that had previously taken place directly, but on a scale and in a way never possible before." Botsman quoted one New York Times piece in sayings, "Sharing is about ownership what the iPod is for the eight songs, which is solar energy for the coal mine." In 2013, Thomas Friedman stated that Airbnb's true innovation was not the platform or the distributed business model: "It is & # 39; trust. & # 39;" At a conference in 2014, Uber investor Shervin Pishevar said that sharing would bring us back to a mythically long gone era of low-impact, communal village life.

More than ten years after the outbreak of the sharing economy, these promises sound painfully old-fashioned. Why rent a DVD from your neighbor or own a DVD if you can stream your movies online? Why use Airbnb for a single room at your home when you can sublet an entire apartment and perform a lucrative off-the-book hotel operation? Uber, Lyft and Airbnb – startups that keep the promises of the sharing economy – are now worth tens of billions, with plans being made public. (Lyft filed a stock market launch on March 1.) These companies and the experts who hypnotized them have given up anything but the partial argument that this industry gave birth and allowed them to circumvent government regulations for years. Sharing had to change our world for the better. Instead, the only thing that we share is the mess it left behind.

The first glimpses of the sharing economy came about years before the term became popular. In 1995, Craigslist integrated the direct donation, rental and sale of everything from pets and furniture to apartments and houses. From 2000, members of Zipcar are allowed to rent cars for daily shopping and short trips with the aim of getting more cars off the road. And CouchSurfing, launched as a non-profit organization in 2004, suddenly turned every living room into a hostel. This first wave of sharing was eclectic and sometimes even profitable, but before the massive adoption of the smartphone it failed to capture the imagination of the public.

Although its origin is vague, the introduction of the term & # 39; sharing economy & # 39; praised by many in the broader technical lexicon by Lawrence Lessig, who wrote about parts in his 2008 book Remix: let art and trade flourish in the hybrid economy. The Great Recession had just begun, and the sharing economy was advertised as a new DIY social safety net / business hybrid model. The contours of the term were never particularly clear. It was used loosely to describe peer-to-peer projects and rental markets with technical support, but also included old models for barter, co-op and casual carpooling. The sharing economy was a broad, eclectic movement with ambitious or utopian goals. The online magazine Shareable was launched in 2009 to document this "movement of movements".

Sharing would help to reduce over-consumption and our impact on the environment. Durant capitalist and tech trend spotter Mary Meeker said that the Americans were moving from an "asset-heavy lifestyle to an asset-light existence" and the sharing economy was in charge. Environmental and political researcher Harald Heinrichs stated that the sharing economy was a "potentially new path to sustainability." Annie Leonard from Greenpeace interpreted sharing as opposed to consumption: the sharing economy, she wrote, would save & # 39; resources, give people access to things they could not otherwise & # 39; i admit and build community. "

Sharing also promised social benefits. It would be the instrument by which we could get to know each other again, a counterbalance to the alienation of a budding tech dystopia. Sharing economy expert April Rinne said that sharing would recreate the social fabric of close-knit communities. "Being involved in shared consumption – and getting used to it – lowers the confidence barrier over time," she wrote on Shareable. new ones startups such as TrustCloud collected all our disparate platform assessments and social routes from across the web and compiled them into a new type of social credit score that would enable trust and responsibility in the sharing economy.

The new opportunities to earn money through part-time freelancing as a handyman, innkeeper or taxi driver would bridge the prosperity gap and reduce global inequality. CNN employee Van Jones said so in 2013 Sharing could lead us to "a more sustainable, prosperous future".

Adam Werbach was president of the Sierra Club and a sustainability advisor for the company before founding the Yerdle used goods market in 2012 together with Yerdle. A kind of proto-Omni, the original Yerdle slogan was "Stop buying. Start sharing." The site encouraged tenants to rent their own things by rewarding them with credits and recycling used goods in the Yerdle community .

"There was a mix of venture capital-backed companies, social benefits and non-profit organizations all in space and fighting for it. And all companies were small and all founders were hanging around – it was a community," says Werbach about those intoxicating early times.

"I had hoped that this would be taming of capitalism."

Janelle Orsi, attorney, co-founder and director of the Sustainable Economies Law Center, called himself a sharing attorney, which according to her now & many people thought it was a joke & # 39 ;. Orsi helped set up small employee cooperatives and worked on cottage foods legislation to enable people in California to sell food they have cooked at home on a small scale, both on and off digital platforms.

For Orsi, the sharing field had some value in selling an idea that was uncomfortable at the time. "It took a certain kind of community-oriented person to take a risk and book an Airbnb or get into an Uber early," says Orsi. For her, and probably for many of the early sharing users, truly cleaner, brighter life through platform technology was tempting and incredibly promising. But that innocence was short-lived.

"I had a basic-level community vision," she says.

"And then suddenly, the big tech companies come here. It was completely hijacked."

Perhaps no company is as emblematic for the sharing economy sector and its rapid evolution as Lyft. Zimride, the original parent company of Lyft, was a service focused on college campuses and long distances in areas with few other transit options. Co-founder Logan Green told reporters that he was inspired by the slow grinding of traffic in Los Angeles, thick with cars with one passenger. If he could find a way to entice more people to carpool, Green would argue, there would be less traffic on the road.

In 2012, Zimride launched Lyft for shorter journeys in cities. Lyft advertised "friendly journeys" and encouraged passengers to sit next to the driver and pay a suggested donation if they felt like it. The company argued that since the platform only acted to connect drivers and drivers, with payment optional, this could not be regulated as a taxi service provider. But just a year after it was printed, Lyft set fixed trip rates and had already raised $ 83 million in financing. It was a success story for a sharing economy: in 2015, Lyft was recognized by the Circulars Economy Awards in Davos as & # 39; helping to relieve roads & # 39 ;.

In the first half of the 2010s, the so-called sharing economy has become a powerful new economic model of several billions of dollars. Around the same time, the definition of "sharing" began to shift. Sharing still called the peer-to-peer model of using under-utilized assets – sharing our goods with each other – but it was also increasingly applied to more traditional centralized rental models.

Apparently everything was part of this new economy: bicycle sharing sponsored by multinational banks, apps that enabled people to rent parking spaces on public streets, and platforms that allowed the sale of used clothing to others. Sharing was the non-profit Wikipedia funded by donors and it was the massive unicorn WeWork. When the Avis Budget Group purchased ZipCar for short-term car rental in 2013, investor Steve Case said it was an indicator of the growth potential of the sharing economy. "Sharing is not a passing whim," he wrote in the Washington Post. "Fasten your seat belts: it's just the beginning."

Even though the term & # 39; parts & # 39; quickly stripped of all meaning, industry insiders still cited social benefits. In 2014, Airbnb global head of community Douglas Atkin told a conference on a sharing economy: "The sharing economy deserves to succeed. There is a decentralization of wealth and control and power. That is why this economy is a better economy."

By the middle of 2010, the story of the innovative, all-in-one-sharing economy had begun to turn sour. Then platforms running on & # 39; collaborative consumption & # 39; banked, bordered on valuations of several billions, the sharing of shares began to feel naive.

"I kind of saw the changeover at the beginning of 2016," says labor lawyer Veena Dubal, who worked with freelance taxi drivers in San Francisco before sharing. "There was a moment of newness, but then a realization that these were the same things. Just a lot cheaper and unregulated."

Three years ago, in a piece co-authored by entrepreneur and model Lily Cole, Adam Werbach also suggested that companies had hijacked sharing. "Although modern rental platforms offer tremendous value, they do not reflect the sense of sharing that communities have defined as communities for thousands of years." Instead, it offered another word: rent.

In some cases, the sharing economy seemed to ignite the problems it claimed to solve. The assumed activation of underutilized resources has in fact led to more, albeit slightly different, use of resources. A number of studies have shown that the convenience and subsidized low costs of Uber and Lyft journeys increase traffic in cities and apparently pull passengers away from a real form of sharing: public transport. UCLA students reportedly take roughly 11,000 journeys a week that never leave the campus. By putting more cars on the road, rides companies have encouraged owners to consume more by buying cars with subprime loans or renting them directly from the platforms themselves.

In addition to making it easy to rent out guest rooms, rental platforms encouraged speculative investment in real estate. Whole houses and apartment buildings are taken from the rental market to act as hotels, putting more pressure on the markets in already priceless cities.

Early sharing champions were ultimately right about technology that made a shift possible from a property company, but what came next was not sharing. The emergence of streaming services, subscriptions and short-term rentals exceeded the promise of non-monetary sharing of resources. The power and control was not decentralized; it was even more concentrated in the hands of large and valuable platforms.

Why would you make an effort to exchange your own DVD & # 39; s for a copy of Friends with benefits, finally, when you can stream it via Amazon Prime Video for $ 2.99? The idea of ​​paying for temporary access to albums instead of owning them in full may have been creepy at first, but we find it increasingly easier to rent all of our music, along with our software and books. Downloading and sharing the material that lives on these streamed sources is impossible, illegal or both.

The new trust has never come true. Government regulation usually plays an important role in mediating consumer relationships with business companies and for good reason. Peer-to-peer platforms can make discrimination easier, and they often claimed that there was little or no liability when something went wrong. New reputations for social media could not prevent unavoidable problems, especially when participating companies did not set background controls for their freelance employees or inspect houses and vehicles for safety.

Delen also did not provide broad financial stability. The jobs that were ultimately created by the sharing economy were poorly regulated and accelerated the broader growth of contract labor, which has already pushed low wages to both freelancers and employees. Some frequently cited studies have claimed that most of us will soon be freelancers. But most of the freelance work seems to be extremely part-time and only an additional income, and the rhythm of the drivers in particular is high.

Sharing does not have the positive market power it used 10 years ago. Since 2016, tech entrepreneurs and their promoters in the press seem to have largely left the language of sharing. This now concerns & # 39; platforms & # 39 ;, & # 39; on-demand services & # 39; or, most recently, & # 39; the gig economy & # 39 ;.

Labor lawyer Dubal is also not happy with the new "gig" language. The term may seem fair – it places the precarious nature of the contract at the center and in the workplace – but it does not remove wider structural concerns. "Even people who have stopped using the & # 39; sharing economy & # 39; have not necessarily seen the light in terms of what kind of work the company has propagated more widely," Dubal says. "They have normalized unregulated business. "

Some of the earliest, most outspoken champions of Sharing have distanced themselves from the term. Originally launched in 2013 as & # 39; a grassroots organization supporting the sharing economy movement & # 39 ;, the non-profit organizations Peers claimed that they should & # 39; grow, mainstream and protect the sharing economy & # 39 ;, and essentially act as a lobbying company for sharing, on-demand and acting startups. Peers' partners included Lyft, Airbnb, TaskRabbit, Getaround and dozens of other primarily for-profit companies. The organization said most of the funding came from & # 39; mission-aligned independent donors & # 39; and foundations, but it also had investments from Airbnb.

In 2016, Peers opted for portable benefits – an infrastructure to support gig workers while working without a safety net for employment. Peers became "an organization for people who worked in new ways", and it merged with the newly created Indy Worker Guild. Co-founder of Peers Natalie Foster co-founded the Economic Security Project, which is lobbying for a new solution to help struggling workers and job seekers: universal basic income.

In April 2018, Rinne acknowledged, previously the promise of a sharing economy of a & # 39; tighter social structure & # 39; enforced, & # 39; the dark side & # 39; of the sharing economy but wrote that "the challenges facing the sharing economy today are largely the result of its success." Rachel Botsman, who stated that sharing would allow us to trust each other again, now writes about how technology and the concentration of power on large centralized platforms has led to "An erosion of trust."

The demand for Botsman & # 39; s myth-shared public drilling machine never seemed to come true. Neighboring Goods Sharing Platforms Crowd Rent, ThingLoop and SnapGoods have all been dead for many years and Josephine meal sharing ended long ago. CouchSurfing has taken a profit with venture capital investments.

It turns out to be sharing "is not really a mass market idea, that's a bit depressing," says Werbach, who has driven Yerdle into a logistics company for major brands interested in reselling their used goods. "Kindergarten teachers are interested in that, but consumers are really interested in what they have to offer."

Some of the early, true sharing believers have paved the way for the growing cooperative movement of the platform. "Now there is a whole consortium of platform cooperatives," says Orsi of the Sustainable Economies Law Center.

And these companies don't take parts into account. Organizations such as Loconomics, Fairbnb and Stocksy see their efforts in the field of cooperative consumption and production less as altruism and more as joint ownership of the means of production.

Delen ended in a unique and ultimately profitable way on economic fear, isolation and frustration with modern American civilian life. It was another iteration of the unbearable trope of Silicon Valley to change the world through disruption, wrapped in a soft package of environmentally friendly, feel-good liberalism. We were encouraged to give companies such as Lyft and Airbnb a chance to cherish them and help them in the public interest. If we didn't believe in parts, we were not just cynics but enemies of progress.

Many of the companies and experts who have sold us the promises of parts have stopped using the term because consumers no longer found it credible or attractive. But it was consumers who really participated. A true sharing economy is full of friction and discomfort, and the margins – if any – are paper thin. Real sharing takes a lot of time and is not particularly profitable for anyone.

To make money, especially the kind of money that technology investors expect, venture-back companies could not just activate under-utilized resources – they had to earn more. For-profit companies demand growth and platforms demand scale. More than a decade in the partial experiment, we have been able to fully estimate the costs. Capitalism was not tamed, as Werbach had hoped – it was stoked.

"Now it's just a transaction," Says Werbach.

"It doesn't have to be dressed in any language to change the world or whatever."

And although sharing is largely dead, other tech-driven models have taken their place: VC-supported companies that are still skating on solving the inequality promise, promoting justice, repairing broken systems, and doing what regulators and large, old businesses don't have done for decades.

Today it is not a shared exercise that redefines trust and replaces institutional intermediaries; it's the blockchain. Botsman now says that the blockchain is the next step in shifting trust from institutions to strangers.

"Although most people barely know what the blockchain is, about ten years or so, it will be just like the internet," she writes. "We will ask ourselves how society once functioned without."

The ambitious promises all sound very familiar.