Australian politics, society & culture


The share market

Does the future belong to “sharing economy” companies like Uber and Airbnb?

Adapted from a drawing by Peter Durand for Lisa Gansky’s talk ‘The Future Is Sharing’ at PopTech 2010. | CC-BY-SA 2.0
CoverDecember 2014 - January 2015Medium length read

My introduction to what is now called the “sharing economy” came in the mid ’90s on the road to Byron Bay. My boyfriend at the time was a candle-maker; we were driving up to the first Homebake music festival in a Kombi packed with candles, candelabras and an inflatable boat. Squeezed into the front seat with us was one of my ex-boyfriends. The candle-maker was an enthusiastic member of Bartercard, a company that began on the Gold Coast in 1991. He attended events where he would meet, for example, restaurateurs who needed candles and who paid him in points to be stored on his card; he could use the points at their restaurants or at any other business associated with Bartercard. These places, he had assured us, included a number of motels and pubs on the way to Byron Bay. It’s just that when night fell and a violent storm broke, none of them happened to have any vacancies.

We pulled into a roadside clearing in the bush. The candle-maker and I climbed into the back of the Kombi and lay down gingerly on the deflated boat, wedged between boxes of breakable candles and pointy cast-iron candelabras; my ex-boyfriend folded, unfolded and refolded his six-foot-plus frame into the front seat. All night long, rain pelted the Kombi’s roof, lightning flashed and crackled, and thunder crashed around our ears like the wrath of Mammon.

Bartercard is still around. Its website claims more than 20,000 members in Australia and 55,000 worldwide. It was one of the early manifestations of what has become a global phenomenon, also known as the “collaborative economy” or “collaborative consumption”. The phrase “sharing economy” dates back only to the mid 2000s. In the pre-Facebook era, “sharing” referred to what children were supposed to do with their toys, men with the housework, Alcoholics Anonymous members with their stories and diners with dim sum, as well as the sort of thing got up to by commune dwellers, polyamorists, the Amish and other barn-raisers.

All societies are built on the sharing of resources. These can be natural (air, water and land) or built (roads, pavements and bridges). Cultures cohere around shared history, legend or songlines, and communities function on the basis of shared social, political and religious responsibilities. Sharing food is an integral part of celebration, from wedding banquets to Jewish Oneg Shabbat and Muslim Eid al-Fitr; the Igbo of Nigeria traditionally seal a friendship by sharing a kola nut. (Restaurants that offer “share plates” or communal tables evoke – with varying degrees of success – these positive associations.) Nearly all religions prescribe acts of charity, which is sharing in its purest form – the unconditional gift of one’s own possessions, food or money to those in greater need. Sharing is a way of life, an economic fundament, a social bond and a virtue. Sharing, in other words, has long existed outside the sphere of monetisation. The candle-maker, the ex and I considered that we’d shared an adventure, and that was priceless.

You can have too much of a good thing: “overshare” was the Webster’s New World Dictionary Word of the Year in 2008. There have always been people who will confide that one extra, unnecessary detail about their lives. Social media gives them a megaphone – it encourages, thrives on and is built for oversharing. As a result, as Annabel Crabb has written, “the vast galaxies of Facebook and Instagram and Twitter are infested with emotional space-junk emitted by people who could probably, on balance, just have kept it to themselves”. Sharing on social media is also a kind of personal branding: a link to a great article can also be a way of saying, “I read the New Yorker.”

Not long ago I somehow ended up telling a new acquaintance a story from my horse-riding days. I’d had to punch a horse in the face, under instruction from its owner, to stop it from charging at me when I collected my own horse from the paddock. The horse was never going to be hurt by the punch (my knuckles were another story), but after that it kept a respectful distance. Later, I learnt that the anecdote had made it onto Twitter. I was mortified at what might have been lost in the translation to 140 characters. I am confident that my new friend’s motivations were not bad, but there is something to be said for not sharing what doesn’t belong to you.

The problematic, or at least controversial, end of the sharing spectrum includes disseminating copyrighted material without permission. It encompasses extreme, exploitative acts such as hacking into the online accounts of celebrities to steal and then publish their intimate photos. And it includes the idealistically motivated sharing of state secrets that has made Edward Snowden, Julian Assange and Chelsea Manning heroes to some and traitors to others.

On balance, however, the act of sharing makes those who give and those who receive a little happier as a result. Now, as a result of the rise and rise of the sharing economy, it’s making a lot of people a little richer as well. The Economist predicted last year that just as online shopping forced retailers to change the way they did business, “so online sharing will shake up transport, tourism, equipment-hire and more”. The sharing-economy giant Airbnb, a platform where members rent out spare rooms or whole homes to other members on a short-term basis, was recently valued at around US$10 billion. The global ride-sharing service Uber could soon be worth $US30 billion. They are two of the largest players in a global economy estimated to be worth more than US$100 billion.

People around the world are renting out their yards to campers and their tools to DIYers, and hiring bicycles, jewellery, books and even washing machines “peer to peer”. A local hero on the sharing scene is GoGet. This car-share service that rents cars on an hourly or daily basis to its members has grown from managing a few dozen vehicles in inner Sydney to more than a thousand across a number of Australian cities. Collaborative consumption is about services as well as goods: the Madrid-based Fon offers free wi-fi hotspots (13.9 million and counting) to global-roaming “Foneros”, who in return share a portion of their own wi-fi with the network. (Non-members pay for access.)

The internet, and more specifically the collaborative and interactive Web 2.0, is the great enabler of the sharing economy: the fact that South Korea has high-speed broadband and excellent internet infrastructure has helped to make Seoul one of the “sharing capitals” of the world.

The American entrepreneur Lisa Gansky has written one of the movement’s essential texts, The Mesh: Why the future of business is sharing. Gansky was one of the people behind the world’s first commercial website, Global Network Navigator, or GNN, which launched in 1993, and she was part of the team that designed the first online transactions and web advertisements. Gansky was also a co-founder and chair of the pioneering photo-sharing website Ofoto (later sold to Eastman Kodak) and has been an adviser, investor or board member for dozens of American companies, including collaborative economy leaders such as TaskRabbit (matching people who need jobs and errands done with people who can do them) and Sidecar (facilitating ride-sharing). In The Mesh, Gansky says the book “is about a simple idea: some things are better shared”.

You would hope we would not need an entrepreneur to remind us of this. But in an age when doctors and universities call us “clients” rather than “patients” and “students”, and even the government often seems to consider us consumers first and citizens second, maybe we need to take lessons on the importance of sharing where we find them. Because it involves trust, respect and generosity, sharing makes us feel good. So why doesn’t it already rule our world?

Any Buddhist can tell you the answer – it’s all about “attachment”. We like owning stuff. The corporations that sell us stuff encourage us to develop an emotional attachment to it – to identify and comfort ourselves with it. Are you a Mac or a PC? Nike or Converse? There’s no therapy like retail therapy. Just do it!

But consumer capitalism in its current form is also inextricably tied to planned obsolescence. Get attached to your stuff and you’ll only have to buy more stuff when it goes. The idea of making products with a fixed shelf life was first mooted during the Great Depression as one way of getting the economy going again. The old manufacturing ideal was that of making something of quality that would last and could be repaired. But that was no way to get people spending and thus supporting industry, which hired people, who then bought more things in a cycle that they called “virtuous”. By the 1950s, it was just part of the way capitalism worked: a relentless push-pull of fashion that makes last year’s model (of car, clothes, anything) seem so, well, very last year.

As far back as 1960, the cultural critic Vance Packard warned in The Waste Makers against “the systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals”. But anyone who has bought a computer or smartphone in 2014 knows that planned obsolescence still rules our world. At the same time, we are beginning to realise that the old-fashioned values of reusing, repairing and recycling are one key to the future. We are beginning to understand that in a “throwaway” culture of limitless consumerism, “away” translates to some other place on Earth – or in the sea, where plastic and other debris have coalesced in infamous floating “garbage patches”. We are also becoming aware that our shopping obsessions are enslaving and poisoning kids from Vietnam to the Congo and super-charging climate change. We are in the midst of a global (if glacial) economic, political and social shift towards greater sustainability – and that logically involves less owning and more sharing. As Gansky says, “Our Earth is the ultimate ‘share platform’.”

Sharing also redistributes goods and resources in a way that contributes to economic justice. That notion was given its most essential and controversial formulation in 1839, when the French politician, advocate of workers’ co-operatives and historian Louis Blanc published his influential essay ‘L’Organisation du travail’, in which he observed that economic competition punished and impoverished the weak. Blanc’s solution, later popularised by Karl Marx, was “from each according to his ability, to each according to his needs”. (Communism, in its ideal, theoretical form, is the ultimate sharing society. Reality is another story.)

Almost two centuries earlier, in 1649, a group of people in England who were facing rising food prices decided to occupy parkland and dig a vegetable garden there to feed themselves, offering what was left over to the poor. The Diggers, as they called themselves, were non-violent. The state under Oliver Cromwell was not. As California Historical Society researchers put it, “they were easily suppressed”.

The reason for the Californian historians’ interest was that in the 1960s a group of San Franciscans, inspired by the 17th-century British radicals, styled themselves the Haight Street Diggers. They collected surplus food (and occasionally stole) from the farmers’ markets to share through their free food program in Golden Gate Park, ran a “free store”, staged free rock concerts, provided free medical care and offered free lifts around town. Some later started communes. Writing in CounterPunch, Bernard Marszalek describes the Diggers as part of the “first generation” in the evolution of the sharing economy.

By the 1980s, the word “hippie” was an insult and even music festivals were big business. The word “free” more frequently attached itself to “markets” in the sense used by Margaret Thatcher and Ronald Reagan. But the sharing economy, if not yet so-called, got its second wind in the ’90s, partly in reaction to the rising economic inequalities fostered by the new ethos. After Bartercard, there was Craigslist and couchsurfing, Napster and file sharing, a new community gardens movement, and the rise of freecycling. Creative Commons, born at the start of the 21st century, facilitates the sharing of creative work and intellectual property on a voluntary, non-commercial basis.

In the mid ’90s, the post-hippie, second-wave sharing economy helped to transform Newcastle from a dying, heavily industrial town to a centre of innovation and culture. In 1993, the NSW city suffered from 17% unemployment (compared with 11.9% Australia-wide) and it would get worse when BHP finally closed its steelworks there at the end of the decade. In 1996, a group of local artists, students and others who, in their own words, “liked the idea of a public access media space”, formed a collective called Octapod that became the incubator for a social, artistic and economic experiment that involved the sharing of information, resources and working space. The group included Marcus Westbury, the force behind the This Is Not Art festival that has put Newcastle on the map for new media. Westbury went on to become the founder and creative director of Renew Newcastle, persuading the owners of buildings that are vacant or awaiting renovation to share their unused spaces with artists, cultural projects and community organisations.

The “third wave” of the modern sharing economy kicked off with the advent of Web 2.0 and the global financial crisis of 2007–8. Some laid-off workers and people struggling to survive on casual jobs became aware that they possessed what economists call “underutilised resources” – cars they didn’t need to use all day, rooms or even whole homes that could be rented out from time to time, and skills that could be helpful to others – and letting people know about it was just a well-designed website away. Although the GFC did not hit Australia nearly as hard as it did many other countries, today youth unemployment is at 13% nationally, 14% of the labour force is “underutilised” (unemployed or underemployed), and more workers are employed under casual conditions than ever before.

As with previous incarnations of the sharing economy, environmental awareness contributes to the popularity of collaborative consumption in this third wave. But there’s also a new social phenomenon at work. As James Surowiecki observed in the New Yorker, among millennials and the new, even younger generation, “the ties between consumption and ownership are loosening”. You can have your entire music library, your games, your homework and all your books on one tablet or laptop. With housing prices as they are, and the casualisation of the workforce making long-term mortgages risky if not unfeasible, you may be renting your whole life. Who needs more stuff?

Besides, if you do need stuff, you can investigate such sites as TuShare, (“Australia’s fastest growing giving network”), where you can find anything from a free hutch for your guinea pig to seeds for your garden and a kettle for your kitchen. You can even give away your crutches and pick up some dancing shoes. Third-wave sharing also includes offline, first- and second-wave-like activities such as book exchanges, babysitting co-operatives, pet-food banks and even pickling clubs. I regularly host clothing swaps: “from each according to her wardrobe, to each according to her desire” (and what’s left to the Wayside Chapel). The Big Lunch launched in the UK in 2009 with nearly one million people sharing food on lawns and streets across the country as a way of revitalising community.

Collaborative consumption may take a while to spread within nations like the newly enriched China. Nearly every conversation I’ve had there about such things as car sharing concludes with my interlocutor telling me that in China ownership is status and you can’t share status. As for social media, homegrown sites are subject to political censorship, and Facebook and Twitter are banned. LinkedIn operates a Chinese-language site but users can’t post long essays or form groups – that would be a share too far.

Yet to China’s north-east, Seoul, with its excellent infrastructure and democratic political system, has become a model of sharing. In 2012, Mayor Park Won-soon launched Sharing City Seoul to address the problems of pollution, an ageing population and youth unemployment. Federico Guerrini has written for Forbes about how, within two years, nearly 300,000 people in the densely populated city (with a total population comparable to Australia’s) had joined car-sharing services. More than 30,000 had exchanged children’s clothing through a dedicated service called Kiple. The government also makes public spaces and government facilities available to the community when they are not needed for official purposes. The organisers see their work as having just begun; Forbes quotes Nan-shil Kwon of Creative Commons Korea as describing nothing less than the creation of “a new culture” as their “biggest challenge” and “ultimate goal”.

Andrew Leigh, the Labor MP and 2011 recipient of the Economic Society of Australia’s Young Economist Award, strongly advocates “collaborative consumption” as the kind of “disruptive innovation” that allows for progress. Collaborative consumption, he told me in an email, has “the potential to democratise access to many things which might otherwise be out-of-reach luxuries”, including private transport and holidays.

Yet in a number of cities around the world, including New York, San Francisco (where Airbnb was born) and even Sydney (whose lord mayor, Clover Moore, is a long-term advocate of sustainable, collaborative-consumption businesses like car-sharing), reaction and resistance have set in. The hotel industry, for example, protests that while its members pay taxes and must meet safety and health standards, platforms like Airbnb not only represent unfair competition due to lower overheads but also pose a potential danger to consumers thanks to the lack of regulation and inspection. In Sydney some local councils, responding also to complaints from neighbours about noise and zoning, have warned Airbnb hosts that they could face fines of up to $1 million if they do not follow the same regulations, some quite onerous, applied to regular B&Bs. Another issue, raised by labour advocates, is that sites like Airtasker (where you can find someone to clean your house, assemble your Ikea furniture or even queue for your new iPhone) threaten to undermine the minimum wage and raise questions of insurance and liability. The fact that a single shared car typically replaces about nine private vehicles, alleviating parking problems, hints at one reason why car-sharing schemes typically enjoy a far greater level of local government support.

There may be problems but that doesn’t mean there are no solutions. Airbnb has already agreed to collect hotel taxes in a number of cities, including New York and San Francisco. Leigh suggests that in Australia we need to explore “how federal or state regulation can best balance the need to protect consumers with supporting innovation and growth in the sharing economy”. He points to Portland, Oregon, as a potential model. The city government there, for example, inspects Airbnb-listed properties for safety, and issues cheap permits to hosts, who in turn pay a tax that goes straight into “an affordable rental housing fund”.

Dominic Perrottet, a Liberal Party MP and the NSW minister for finance and services, has also praised the “collaboration society”. He has even requested that his department explore ride-sharing for government employees as a way of cutting costs. “As someone on the Liberal side of politics,” he told the Sydney Morning Herald in August, “we should welcome the sharing economy as something profoundly conservative.” He describes it as “the free market on steroids”, “grassroots” entrepreneurship, and “an efficient use of resources” that is “a mix of technology, trust and low-cost options to effectively meet demand – and it’s all done without government intervention”. He has yet to convince some of his colleagues in cabinet. (None of the federal government ministers I emailed for comment on the issue bothered to reply.)

Yet while regulators cavil, corporate capitalism is coming to – and buying out – the party. At first, telecoms vehemently opposed Fon. Then some began to twig that, in the words of Fon’s CEO, Martin Varsavsky, “we actually created a new incentive for people to sign up for DSL or broadband connections”. Deutsche Telekom, BT and Telstra now count among Fon’s partners.

Evgeny Morozov and Bernard Marszalek are two of the more radical critics of the direction that the sharing economy has taken. “At its worst,” writes Morozov in the Observer, it “turns us into perpetual hustlers”, putting “everything that we own, from tangible assets to intangible thoughts” on the market. He warns that we shouldn’t forget that inequality still thrives, and a world of sharecars couldn’t offset the damage done by polluting industries and the consumption excesses of the rich.

Similarly, while acknowledging that “sharing has the power to release ethical impulses in all of us”, Marszalek cautions that the transformation of trust into currency has created nothing less than “a micro-entrepreneurial economy of extreme commodification”. He points out that “voluntary lending, pooling, allocating of resources and authorised use of public property” have nothing to do with “renting and leasing”. And if sharing is “drained of its traditional meaning”, we are in danger of losing the kind of sharing that is unchained from profit. Marszalek notes that unlike the first generation of modern-day sharers in the ’60s, the second, in the ’90s, was less politically motivated and less confrontational. Now, he says, we have “the spectacular emergence” of the “Moguls of Sharing”, and “they, I am sorry to say, are the exploiters”. Marszalek’s words came to mind when I learnt that Google Ventures is a major investor in Uber.

Besides, according to the entrepreneur Pascal-Emmanuel Gobry in a Forbes article titled ‘The Distributive Implications of the Sharing Economy’, as the collaborative economy becomes increasingly dominated by big global corporations, we can expect a “relentless downward pressure on prices” and even further inequalities in the distribution of wealth. If the sharing economy means, as James Surowiecki wrote in the New Yorker, “no boss, the ability to set your own hours [and] control over working conditions”, then “it also means no benefits, no steady paycheck, and the need to always be hustling”. In October, Slate’s Alison Griswold reported that while Uber has boasted that drivers for its UberX service in New York City earn a median annual income of US$90,766, the truth is closer to half that amount, with take-home pay something like $12 an hour for many; Uber drivers in London, San Francisco and Los Angeles have gone on strikes and protested against Uber’s recent fare-cutting policies.

I love Airbnb as much as the next traveller; maybe more, for as a novelist it’s hard to deny, to quote Meg Watson in the Saturday Paper, “the pleasure of being inside someone else’s home”. And I’m proud to have been one of GoGet’s earliest members. But it’s worth considering how we think about the sharing economy. Morozov notes the extraordinary “talent for spin” of those who profit most from the linking of “sharing” to “economy”. He points out that Airbnb’s “global head of community”, Douglas Atkin, published a book in 2004 called The Culting of Brands: Turn your customers into true believers, which explores what lessons religious cults have to offer the corporate sphere. Hearing that, my friend Stephanie Bennett suggested the term “sharewashing” for the way in which for-profit giants like Airbnb want us to think that no businesses have ever before fostered such feelings of trust and community – as though no one has ever before been on first-name terms with their local bookseller or left their keys for someone at the corner shop.

Perhaps one answer lies in removing the word “sharing” from all for-profit enterprises, using terms like “collaborative consumption” or the “peer-to-peer economy” instead. That is not to imply there is something inherently bad about commerce, only that it is not a virtue like charity. We could reserve the phrase “sharing economy” for transactions that allocate or re-allocate resources regardless of profit: community gardens, the use of vacant or underutilised spaces by artists and community groups, clothes swaps and projects like the UK’s Big Lunch.

As Confucius observed two and a half millennia ago (here in James Legge’s translation): “If names be not correct, language is not in accordance with the truth of things. If language be not in accordance with the truth of things, affairs cannot be carried on to success.” In an age of dwindling resources and global warming, sharing – as a concept, a practice and an ideal – is too important to trust to the likes of big corporations and their spinmeisters.

Perhaps we could then direct the conversation to the notion of shared values as well – and how these are different from identifying, for example, with a “team”, a word associated with competition and exclusivity. We could broaden the discussion to how to better share knowledge in a country where educational institutions are under pressure to be profitable and information in a media environment is dominated by commercial or ideological agendas. One new media model is The Conversation, a website that is supported by private, university and government sector partners and provides independent “explanatory” journalism in the form of articles that are free to share under the terms of a Creative Commons licence.

We also have to ask why it is that, even as we enthusiastically embrace the “sharing economy”, we are so reluctant to share our land and our wealth with those in need at home and abroad (the most popular item in the recent budget was the cut to foreign aid) – or even, on a mundane level, our streets with cyclists. Perhaps the answer lies in Annabel Crabb’s proposition that there are two types of sharing: “one that is convenient and cheap for the giver” and “one that requires sacrifice”. Let’s have that conversation – and share that thought.

About the author Linda Jaivin
Linda Jaivin is an author and translator of Chinese. Her books include Eat Me, The Infernal Optimist and A Most Immoral Woman. Her most recent novel is The Empress Lover.