The ‘Sharing’ Hype

Do companies like Lyft and Airbnb help democratize the economy?

Rebecca Burns

Those cars with the pink mustaches may not be smiling for long, if regulators get their way. (via Lyft)

Those cars with the pink mus­tach­es? They may not be smil­ing for long, if some reg­u­la­tors get their way.

How can a movement that has been started by corporate and venture capital be any kind of socialism?

Last year year marked mete­oric growth in the new shar­ing econ­o­my” — a catch-all term for web­sites and apps that let peo­ple charge oth­ers for use of resources such as cars and rooms. Ride-shar­ing com­pa­ny Lyft saw a twen­ty­fold increase in users of its sig­na­ture mus­ta­chioed cars, and room-shar­ing plat­form Airbnb gained 6 mil­lion cus­tomers.

But 2013 also exposed the iffy legal­i­ties of shar­ing,” as ride-shar­ing ser­vices tan­gled with city reg­u­la­tors and taxi unions, and Airbnb faced off against New York State Attor­ney Gen­er­al Eric Schnei­der­man in what For­tune mag­a­zine called the sem­i­nal legal dis­pute” for the bur­geon­ing shar­ing econ­o­my. In Octo­ber, Schnei­der­man sub­poe­naed Airbnb for infor­ma­tion on its hosts, alleg­ing that some are using the plat­form to oper­ate de fac­to hotels. The com­pa­ny is fight­ing the order in court.

Pro­po­nents of the shar­ing econ­o­my bill it as a way to reduce con­sump­tion and cre­ate jobs, and say that the crack­down on Airbnb would harm New York­ers just try­ing to pay their bills. But crit­ics argue that beneath their feel-good veneer, shar­ing busi­ness­es are lit­tle more than a new way for cor­po­ra­tions to cir­cum­vent reg­u­la­tions, rob city cof­fers and under­cut union­ized labor.

In These Times con­vened a dis­cus­sion on the shar­ing conun­drum with David Golum­bia, assis­tant pro­fes­sor of Eng­lish at Vir­ginia Com­mon­wealth Uni­ver­si­ty and author of The Cul­tur­al Log­ic of Com­pu­ta­tion, Neal Goren­flo, co-founder and pub­lish­er of Share­able Mag­a­zine, and the Sol­i­dar­i­tyNYC col­lec­tive, which sup­ports the growth of coop­er­a­tives in New York City.

Pro­po­nents of the shar­ing econ­o­my tend to por­tray it as ben­e­fit­ing ordi­nary peo­ple by giv­ing them a leg up over cor­po­rate actors like hotel chains. Is this accurate?

NEAL: As the cost to cre­ate, mar­ket and sell an increas­ing­ly wide vari­ety of prod­ucts and ser­vices plum­mets, peo­ple have a new sys­tem to go to: the shar­ing econ­o­my. Much of what was only pos­si­ble for large cor­po­ra­tions just a few years ago is acces­si­ble to ordi­nary indi­vid­u­als now. There’s a pos­si­bil­i­ty for a pow­er shift in favor of ordi­nary peo­ple, but they must wake up and take action to secure it.

DAVID: Sid­ing with upstart ven­ture cap­i­tal is not my idea of giv­ing ordi­nary peo­ple a leg up.” The shar­ing econ­o­my” doesn’t have much to do with indi­vid­u­als. Instead, it rep­re­sents cor­po­rate cap­i­tal doing what it typ­i­cal­ly does: Mon­e­tiz­ing parts of the social world that have pre­vi­ous­ly avoid­ed it. The dif­fer­ence between rent­ing one’s apart­ment on Craigslist and Airbnb might seem small, but it’s huge: the role of the inter­me­di­ary con­verts the effort from an indi­vid­ual one to a cor­po­rate one that is all about extract­ing prof­it from resources that are not, cur­rent­ly, mon­e­tized enough, in the opin­ion of some ven­ture capitalists.

SOL­I­DAR­I­TYNYC: There’s a spec­trum of shar­ing econ­o­my groups, from coop­er­a­tives to pri­vate com­pa­nies like Airbnb. Airbnb is por­trayed as help­ing cash-strapped indi­vid­u­als, which may be true in some cas­es. But in the long-term, it will like­ly exac­er­bate New York City’s hous­ing cri­sis, by allow­ing land­lords to charge more in rent because their ten­ants can turn to this sec­ondary mar­ket to make up the difference.

DAVID: Yes, and as this pro­ceeds, shar­ing” tends to become required by mar­ket prices rather than vol­un­tary, in a dynam­ic I’ve been call­ing crowd­forc­ing.”

Most of the crit­i­cism of the shar­ing econ­o­my so far has come from con­ser­v­a­tives. Writer Milo Yiannopou­los has called it an ugly throw­back to the dark days of social­ism.” Is the shar­ing econ­o­my in fact social­ist, or in any way anti-capitalist?

DAVID: How can a move­ment that has been start­ed by cor­po­rate and ven­ture cap­i­tal be any kind of social­ism? If we reframed Airbnb as Hilton wants access to every Man­hat­tan resident’s apart­ment when he or she is out of town,” we’d see more direct­ly what is happening.

NEAL: The best parts of the shar­ing econ­o­my are bot­tom up, self-gov­erned phe­nom­e­na. It isn’t lim­it­ed to tech com­pa­nies, either — think about coop­er­a­tives, as well as depos­i­tor-owned cred­it unions. At Share­able, we use the term shar­ing econ­o­my” in the broad­est sense pos­si­ble, as the whole­sale democ­ra­ti­za­tion of the economy.

But we def­i­nite­ly need to use resources more wise­ly, so star­tups that help us bet­ter use idle assets have tremen­dous val­ue. One shared car replaces up to 13 owned cars. Noth­ing else but shar­ing has the poten­tial to rad­i­cal­ly reduce resource use, rad­i­cal­ly increase access to resources, and act as a big, local eco­nom­ic stim­u­lus package.

DAVID: Shar­ing” can be seen as a form of resis­tance to the cap­i­tal­ist econ­o­my. But the shar­ing econ­o­my” becomes a way of cap­i­tal­iz­ing on that resis­tance. This strikes me as a strong instance of cyber­lib­er­tar­i­an­ism, which is the yok­ing of far-right ideas about free­dom” and gov­ern­ment to an appar­ent­ly apo­lit­i­cal dig­i­tal utopi­anism. The polit­i­cal mushi­ness of the rhetoric sur­round­ing such projects masks what the lead­ers of the projects want, which is the extrac­tion of prof­it from sec­tors so far insu­lat­ed from such mon­e­ti­za­tion. The only free­dom” such efforts ulti­mate­ly serve is the eco­nom­ic free­dom of con­cen­trat­ed capital.

SOL­I­DAR­I­TYNYC: Sol­i­dar­i­ty econ­o­my” orga­niz­ers define and try to frame our work through five prin­ci­ples: democ­ra­cy, coop­er­a­tion, social jus­tice, mutu­al­ism, and eco­log­i­cal sus­tain­abil­i­ty. With­out the explic­it com­mit­ment to some or all of those val­ues, then the shar­ing econ­o­my — or the social econ­o­my, the new econ­o­my, or what­ev­er oth­er label we use — is just a new space of cap­i­tal­ist exchange where it didn’t pre­vi­ous­ly exist or pre­dom­i­nate. It’s the pol­i­tics of the stuff that real­ly mat­ters here.

How should urban pol­i­cy address the legal chal­lenges pre­sent­ed by shar­ing” busi­ness­es like Airbnb?

NEAL: The shar­ing econ­o­my doesn’t hinge on one rul­ing, or one com­pa­ny: There are many prac­ti­cal pol­i­cy direc­tions to increase the capac­i­ty cit­i­zens to co-con­sume, co-pro­duce, and cre­ate their own jobs. Share­able and the Sus­tain­able Economies Law Cen­ter recent­ly put out the first ever shar­ing econ­o­my pol­i­cy primer for urban lead­ers. In the case of hous­ing, poli­cies sup­port­ing hous­ing coops, micro-units, and moth­er-in-law suites can increase den­si­ty, make more afford­able hous­ing avail­able, and build social capital.

DAVID: But the NYC case is emblem­at­ic because it expos­es what Airbnb is real­ly up to: get­ting around tax­a­tion and reg­u­la­tion for prof­it. While there may be noth­ing wrong with indi­vid­u­als offer­ing their apart­ments for short-term rental them­selves, coor­di­na­tion of these efforts togeth­er by a cen­tral cor­po­rate enti­ty was always about get­ting around laws that were put in place by the demo­c­ra­t­ic process and are most­ly there for the pro­tec­tion of the pub­lic. Airbnb, like much of the shar­ing econ­o­my,” is a project designed to bypass demo­c­ra­t­ic gov­er­nance, which is some­thing no pro­gres­sive should favor.

SOL­I­DAR­I­TYNYC: Yes, and the kind of prof­it-mak­ing that Airbnb enables can also act as back­door gen­tri­fi­ca­tion that pre­vents com­mu­ni­ties from hav­ing a say in whether a neigh­bor­hood is most­ly long-term res­i­dents or a col­lec­tion of pop-up hotels and the busi­ness­es that cater to them.

It’s also worth not­ing that Airbnb takes busi­ness from the hotel indus­try, which offers many liv­ing-wage union jobs in the pri­vate sec­tor in New York. Those jobs are backed by a com­plex web of reg­u­la­tion, col­lec­tive bar­gain­ing agree­ments, and cul­tur­al cus­tom that has gen­er­at­ed eco­nom­ic well-being for a large­ly immi­grant work­force. Under­min­ing democ­ra­cy and labor isn’t shar­ing, in our book. Democ­ra­cy and social jus­tice will need to be includ­ed and pro­tect­ed with­in shar­ing econ­o­my ini­tia­tives from the start if it’s going to be more than a tool for extrac­tion and exploitation.

How about the grow­ing num­bers of peo­ple who work in the shar­ing econ­o­my? The car-shar­ing com­pa­nies Uber and Lyft have both become the sub­ject of law­suits from dri­vers who say they were ripped off. But shar­ing econ­o­my com­pa­nies tend to argue that those pro­vid­ing ser­vices are users of their plat­forms rather than employ­ees, poten­tial­ly mak­ing labor action more difficult.

DAVID: I would sug­gest refrain­ing from get­ting involved in large-scale ven­ture cap­i­tal-backed projects to begin with. Any­one who doesn’t is mak­ing not just them­selves but their peers and rela­tions into tar­gets for cap­i­tal, and his­tor­i­cal­ly cap­i­tal tends to get what it wants out of such relationships.

SOL­I­DAR­I­TYNYC: The abuse of labor can exist in any enter­prise or orga­ni­za­tion, no mat­ter how pro­gres­sive. Instead of sign­ing up as an Uber dri­ver, these dri­vers could form their own com­pa­ny as a taxi col­lec­tive — like Union Cab in Madi­son Wis­con­sin. Anoth­er way to do this that would improve upon the labor issues and the allo­ca­tion and dis­tri­b­u­tion of the sur­plus would be a con­sumer coop­er­a­tive in which the vehi­cles were actu­al­ly owned and shared by peo­ple who were the con­sumer-own­ers. You could even com­bine the two: a con­sumer-coop­er­a­tive that had stake in the equi­ty and gov­erned a work­er col­lec­tive, which would run the ser­vice as drivers.

NEAL: The pos­si­bil­i­ty to com­bine com­mu­ni­ty financ­ing, a coop­er­a­tive busi­ness form, and an inter­net-based shar­ing plat­form exists. Why not a Fairbnb?” The chal­lenge, how­ev­er, is that com­mu­ni­ty financ­ing and coop­er­a­tive busi­ness­es take more time and mon­ey to set up. You typ­i­cal­ly see coops exe­cute on well-under­stood busi­ness mod­els like retail, dis­tri­b­u­tion, and man­u­fac­tur­ing. I don’t see coops tack­ling unusu­al, risky tech ideas. I think that this can change, but it’ll take a lot of time and hard work. 

Giv­en these chal­lenges, how should pro­gres­sives approach the shar­ing econ­o­my at this juncture?

NEAL: Pro­gres­sives need a busi­ness mod­el. Repub­li­cans and Democ­rats have cor­po­rate Amer­i­ca; pro­gres­sives have a col­lec­tion of issues to appeal to people’s moral instincts. But that can only go so far when peo­ple can’t house, feed, or edu­cate them­selves. Pro­gres­sives need to get behind the peo­ple-pow­ered econ­o­my, all those ways ordi­nary peo­ple co-own what they need to thrive, as their main strat­e­gy. Until pro­gres­sives play the need­ed role as an insti­tu­tion builders in the new econ­o­my, they will con­tin­ue to fade in importance. 

DAVID: Pro­gres­sives should be very sus­pi­cious of any and all lib­er­a­to­ry claims stem­ming from ven­ture cap­i­tal­ists, includ­ing those being made about the poten­tial of the shar­ing econ­o­my.” The advent of cyber­lib­er­tar­i­an­ism has pro­vid­ed cap­i­tal­ists with a means to attract Left activism with­out mak­ing clear how diver­gent their goals are from those of the Left. Many exist­ing coop­er­a­tive enter­pris­es have clear­ly artic­u­lat­ed their rela­tion­ship to Left pol­i­tics, and it is impor­tant to sup­port them. New­er shar­ing econ­o­my” ini­tia­tives should be looked at very skep­ti­cal­ly, espe­cial­ly if they appear to have back­ing from ven­ture cap­i­tal­ists, and we should think very care­ful­ly about what the ulti­mate pic­ture such efforts paint appears to be. While vol­un­tar­i­ly shar­ing some extra space in one’s apart­ment may well be appeal­ing, the prospect of being essen­tial­ly com­pelled to share” one’s liv­ing space in order to afford it is much less so.

SOL­I­DAR­I­TYNYC: We should be orga­niz­ing around eco­nom­ic activ­i­ties that con­tribute to com­mu­ni­ty wealth and that include all peo­ple, not just those with the abil­i­ty to access cap­i­tal for a start-up based on shar­ing tech­nol­o­gy. Pro­gres­sives need to ensure that the idea of the shar­ing econ­o­my” is trans­lat­ed into real poli­cies for eco­nom­ic democracy.

Rebec­ca Burns is an award-win­ning inves­tiga­tive reporter whose work has appeared in The Baf­fler, the Chica­go Read­er, The Inter­cept and oth­er out­lets. She is a con­tribut­ing edi­tor at In These Times. Fol­low her on Twit­ter @rejburns.
Subscribe and Save 66%

Less than $1.67 an issue