Why The Sharing Economy Isn’t | Hacker News Reader

Why The Sharing Economy Isn’t

tomslee.net

196 pointsrainysunday40 comments

This article really clears up for me the skepticism I felt about these new companies. I've heard the term the Sharing economy before but I didn't know these companies were trying to reappropriate the word. It takes quite a bit of cognitive dissonance to be convinced that what you're doing is sharing even when you're taking people's money.

Back when I was a teenager, I dreamt up that the women's rights movement was ultimately a ploy by the capitalist class to dilute the value of labor in the market. Technology has done the same with our time by making us surrender the concept of off time. Now this sharing economy wants to take away our space and stuff. We retreat a little to bide time but it's easy to permanently lose ground.

Sharing is good as long as no company takes advantage of it.

We'll end up with a bunch of rental companies, where only big companies own stuff and you have to rent everything...

"women's rights movement was ultimately a ploy by the capitalist class"

Rather it was about family not working as advertized.

Movements don't start your social troubles, they react.

> Back when I was a teenager, I dreamt up that the women's rights movement was ultimately a ploy by the capitalist class to dilute the value of labor in the market.

This is most certainly a dream, because in reality women's rights and feminist movements are in part about getting women actually paid for the labor they perform.

> This is most certainly a dream, because in reality women's rights and feminist movements are in part about getting women actually paid for the labor they perform.

The idea that capitalism subverted feminism in the pursuit of cheap labour is shared by some feminists, and isn't necessarily inherently antifeminist.

I've not heard this before, from what I've seen and read feminism has been partly about the exploitation of women's labor, an exploitation that has occurred for a long, long time. That women's labor isn't paid for or is underpaid is a long standing issue.

I remember when the web and later peer2peer was just taking off: "this is the death of the middleman".

And here we are, as the "masses" joined in the fun, we're surrounded by not just middle-men but huge middleman-concerns, walled gardens, "siren servers".

Turns out AoL and Yahoo had it about right, they were just 15 years too early and a tad too innocuous ;D

(Only tangentially related but remember why Skype took off? It was (branded as) "fully peer-to-peer". Freeing millions from the shackles of the telcos, yay! Now flip it to eBay first, to MS next and here we are, the world's biggest NSA backdoor and botnet. Neat!)

With most of the architectural decisions of skype known... why wouldn't anyone create an alternative?

I don't know I think closed just seemed natural human behaviour as oppose to opening things up. There is a different realm in custom hardware like phones and tablets where vendors are just dicks. They don't make it possible to run any other software. I have been waiting for years to run Linux on a consumer device. After years of Android and iOS all we have is the Nexus 4,7 and 10 which are still in beta so their experience isn't so great.

The biggest influence for the industry was created by Apple, and Steve Jobs is definitely sour at what Bill Gates and then later Eric Schmidt did to Apple. It's not really surprising, these large companies will naturally go towards more closed down systems.

Skype took off because they were masters of evading firewalls and corporate network blocks. People used it because it worked when nothing else would.

That it was P2P was always an implementation detail, not a selling point.

Is this not a shameless land grab for the term "sharing economy"? I've always associated the term with actual grassroots things like Freecycle, LETS systems etc. Or maybe people have actually started to think AirBnB is part of the "sharing economy" and I just missed it.

It absolutely is. Freecycle, Couchsurfing, etc.

Now you have Uber joining the fray as "ride-sharing". No, these are professionally licensed drivers cruising around town in sleek, jet-black towncars. They are not "ride sharing" any more so than that restaurant is "food sharing" to me.

Does anybody really think of Uber as "ride sharing"? I think of it as "app that calls you a black car cheaper and faster than if you went through a car service".

Some of these like Lyft or RelayRide are truly car sharing - peer to peer facilitating hitchhiking by unlicensed "cab drivers" for tips.

But still, the "economy" part is more in evidence than the "sharing" part. Obviously, people expect to be paid for doing services, even if it's an informal and off-the-books part of their income.

I would guess they are going for an IPO soon and tries to attach themselves to something sufficiently vague that seems bigger than themselves.

Maybe it's because I work for a nonprofit, but this piece seems like speculation and paranoia. Oh, so this group Peers is actually funded by a handful of wealthy patrons? Guess what--all nonprofits make 90%+ of their revenues from the top 10% or less of donors. Some nonprofits only really have ONE donor. That's just how the nonprofit sector works. All of it. By the author's logic, the Red Cross is astroturf.

I think it's a fair point that these companies aren't building a sharing economy. They're building companies that let people sell individual surplus of capital or time or skills through a convenient platform. That might not be sharing, but there's real economic value in that. They wouldn't be able to take a cut from these small transactions unless they genuinely offered some valuable service to the other parties. I just recently stayed in a wonderful AirBNB apartment while on a trip, and I know I wouldn't have managed that without the AirBNB service, and I know I would have paid more and gotten less for a hotel.

The author assumes--wrongly, from my experience in public policy--that the status quo organizations and regulations exist for the common good. Some do, but many don't. Lots of bad laws and crooked organizations raise unjustifiable barriers to entry--not just for Silicon Valley start-ups, but for the mom-and-pop businesses too.

I can't say for sure whether Peers is good, bad, or neutral. I can say with certainty that this article is heavily biased, ignorant of how most nonprofits work, and ignorant of the public policy process.

> By the author's logic, the Red Cross is astroturf.

It would be like that if the Red Cross claimed to be a grassroots organisation and engaged in advocacy for its funders. As far as I know neither of those things are the case, and if they are I hope somebody will write critical blog posts about it.

If you speak to people who were involved in Occupy Sandy -- a real grass-roots effort to relieve the aftermath of Superstorm Sandy -- they can tell you what dealing with the Red Cross is really like. [typo edit]

I think it's a fair point that these companies aren't building a sharing economy.

That's the point. They're directly manipulating gullible people into thinking they're "sharing" and "doing good" when in reality the entire mission is to sign up more people so sites can take their 30% cut of actual work happening (then, if reported properly, taxes take 50% of the 70% paid out to the user, so the user is left with... not much).

The words "astroturf" and "grassroots" refer to political movements. Wealthy people create the appearance of a broad movement representing the public interest that advocates for certain policy positions, but this is just to disguise the primary mission of the organization, which is to expand the wealth of the donors. If wealthy donors used the Red Cross to lobby governments for favorable legislation, then your analogy would be reasonable.

And the nearest thing to a mission statement of peers.org is "We educate our peers and community leaders about the benefits of sharing. Together, we can help protect and grow the sharing economy."

"Educating our peers" sounds a lot like customer acquisition efforts for the relevant startups. "Protecting the sharing economy" probably refers to the startups' regulatory issues.

I think you're coming at this from the wrong direction.

Peers is a lobbying organization for SV companies that are trying to enter long regulated industries with a business model that does not work when regulated.

They attempted the "This market needs disruption! We're cool and big government regulation is lame!" message at the beginning, and it was working alright. Then there is backlash after some AirBNB users trashed and robbed a house and an Uber driver in DC was arrested for sexual assault (charges dropped), etc. People are being reminded of why the regulation is there in the first place and that's not going to get those regulations relaxed in the american party politics system.

Peers is an alternate strategy emphasizing a positive (sharing is great!) instead of a negative (regulation is bad!) and they appropriated the language and vocabulary of the existing culture/movement/whatever-you-want-to-call-it because it's great language and already tested as having a positive emotional impact on people. The American right gets the anti-regulation angle and the American left gets the "sharing culture" angle now.

This guy is taking that appropriation personally, since some of these businesses are not at all compatible with the core tenants of the sub culture he belongs to. I can't blame him for that, he's absolutely right about that part. They are appropriating the language of a movement they are fundamentally at odds with for marketing/political purposes.

> I can say with certainty that this article is heavily biased, ignorant of how most nonprofits work, and ignorant of the public policy process

It's a personal blog post so of course it's biased, it doesn't pretend not to be, and there are no nonprofit groups involved (although there are a few non-profit groups that have partnered with peers) so throwing around the word "ignorant" when you have got your basic facts backwards is unwarranted.

What would be ideal, I figure, would be if we could have the infrastructure to enable a sharing economy, but without centralized gatekeepers taking a cut and ultimately being a middle-man.

Until then, there is certainly disruption happening (hotel chains, taxi firms, airport parking businesses are worried about all this), and that is a market positive - but it's certainly not the all-round-benevolent model that the name 'sharing economy' would suggest. There are winners and all you have to do is follow the money/data.

As a side-note, I think the kind of naming used for new technologies and business models is increasingly manipulative - I certainly share a lot of the author's skepticism, and agree that the mere name 'sharing economy' will likely encourage people of genuine good intention to put their energy into it without seeing the full picture.

I remember when dis-intermediation was the big buzz-word. Nowadays it seems to be all about business schemes with intermediaries at the core who make the process less efficient than it has to be in order to extract profits for themselves.

All platforms can be thought of as positioning themselves for rent seeking - that is app stores, linkedin, and yeah airbnb.

Things that require a network effect, after they get it, are in a super leveraged position that they can cash in.

That said, the platforms that choose not to cash in on this tend to not be as successful. Couchsurfing wasn't. Cash and the promise of cash for investors allows a company to spend a great deal to market and secure with insurance this sharing economy. These are important functions to make the public understand and get used to this new weird future.

In the end, we need those rent-seeking-seeming fees to jumpstart this whatever-you-want-to-call-it sharing economy. We don't get an airbnb without a large commission on every renting agreement made.

I believe that once the public is comfortable with 'sharing economy' as an integrated part of our lives, then the race to the bottom platforms might start happening - when companies are competing on price and features. Of course, those incumbents will fight tooth and nail to keep their monopolies and may well succeed. We'll see.

Right now is the golden age for these types of companies.

> That said, the platforms that choose not to cash in on this tend to not be as successful. Couchsurfing wasn't.

By what metric? The people I know who use couchsurfing.org seem very enthusiastic about it, which is obviously anecdotal but it's odd to be reading that it's a failure.

Probably total number of people sleeping at Couchsurfer vs AirBNB places per night. In this sense, AirBNB is introducing more people to the concept.

I have used both, and AirBNB is much easier in cities, where Couchsurfing hosts probably get way too many requests.

"Live by disruption, die by disruption." - Bruce Sterling

That is one interesting piece. I highly encourage reading it all, as well as the articles linked within.

I had not been aware of this 'sharing movement', and how this perspective was being force-fed by some SV folks. And now that I've found about it I find this to be very off-putting, I was expecting better from SV.

The BI article on TaskRabbit (http://www.businessinsider.com/confessions-of-a-task-rabbit-...) I think nicely outlines the problems with this wave of 'sharing' startups:

    The whole thing about TaskRabbit, again it's "neighbors 
    helping neighbors," as if my health and safety don't 
    matter, as if I'm willing to put up with whatever you 
    dish out no matter what.  And it's required that 
    TaskRabbits always have a smile on their faces.  You 
    know what, I'm not going to smile at you while you lie. 
    It's a health factor, it's a safety risk.  I don't want 
    to get covered in cat shit and if I do, I should know 
    about it and get paid for it. 

    There really is an element of disregard for the 
    Rabbits. Then the email I got from TaskRabbit about 
    being unprofessional — my answer to that is, if you 
    actively suppress what you actually foster, it is 
    abuse. Then people will figure out that they can lie 
    and manipulate the TaskRabbits to get what they want. 

    BI: Do TaskRabbits ever meet?

    Not so much.  I've met a couple of them because either 
    I've posted tasks myself or I was assigned a task that 
    involved another TaskRabbit.  That's part of the 
    strategy of TaskRabbit — to keep us apart from one 
    another.  We can't message each other on the website. 
    The only way you get to meet another TaskRabbit is if 
    you post a task, and I think they do this to keep us 
    apart because they don't want us fixing the process. 
    They don't want us unionizing.  They don't want us to 
    get together and say an Ikea run is $50 minimum. 

    If it's a $25 job, how much will TaskRabbit take?

    Here's how it works.  I wish I had access to their back 
    end numbers.  Certainly a task that costs, let's say, 
    $30 or more, the markup is actually about 70%.  At a 
    lower price point the markup is smaller and it could be 
    as low as 15%.  For example, if I bid $20 on a grocery 
    run, the poster will probably pay a price of $23.  So 
    that is fair.

    But as the price goes up, so does the cut.  And I know 
    once you hit about $30 for the task, the markup is 70%.

Craigslist is more of a 'sharing economy' company than this -- it gives you the option to directly interact with people about jobs... and products... and apartments.. and so much more... for free. The rent-seeking-type sharing economy startups of http://peers.org are simply VC-funded, sophisticated, money-making schemes. At the end of the day, money is less fairly distributed in society because of these "sharing" startups, and I think the fact that they seemingly deny this is particularly shameful.

Be careful about making the flawed assumption that economics is a zero-sum game. That if craigslist earned money, it must somehow be stealing it.

Actually, the opposite is true. I think craigslist is so focused on being barebones and profit-free that it actually is doing a disservice to the economy. It took a lot of pressure for Craigslist to add a basic feature, maps integration, and it only did so recently. If craigslist wanted to really contribute to society, it should try earning a bit more money and using it to hire people to make the service better for end-users. Everyone wins.

Middle-men are not necessarily evil just because they earn a profit. A genuinely useful middle-man can benefit both himself as well as the other parties in the transaction. Again, don't fall into the trap of zero-sum thinking.

Craigslist is an enormous benefit to people in general. The economy is only valuable in its benefits to people.

If any other business can figure out a way to provide a better value service, they're free to start at any time.

Man, saying craigslist does a disservice to the economy sure rankles. I feel like a similar argument might be that peace does a disservice to the economy, too. And imagine what a lack of disease would do to the healthcare economy.

Sorry if I was being unclear. I wasn't trying to say craigslist does a disservice to the economy in general; it's clearly beneficial and I don't want to diminish that. Rather, I think that its attitude of being barebones and avoiding profit is doing a disservice, by holding it back from becoming a better, more useful service.

If that was the case , one would expect a for profit craigslist to have dominated by now.

Two-sided marketplaces are notoriously difficult to get going. Craigslist benefits extensively from network effects, and they're good.

You can't beat them by being just a little bit better.

They have, just on a category-by-category basis. Many of the sharing economy companies are included.

http://cdixon.org/2012/11/23/some-problems-are-so-hard-they-...

Small nitpick, but to be clear: Craigslist is a for-profit company, and has been registered as such since 1999. The job listings cost money to post. That's where the site is believed to make most of its revenue.

The .org domain, and the fact that a lot of users haven't experienced posting a job, create the popular misperception that CL is a nonprofit. To be fair, it's a strange kind of company, and I'm not sure if profit is its overriding goal, per se. But it's a for-profit enterprise. It may be the most laid-back for-profit I've ever seen, though. :)

The internet makes rent-seeking massively scalable.

So great piece with a lot of valid criticism but I also feels like it keeps judging the speech on a claim it doesn't continue to make.

The author continues judging the speech as a claim to counter capitalism when in fact the speaker comes clean early on. This is unfortunate because it muddles the argument.

The way I understand the argument its more that instead of companies making money on individuals its individuals making money on each other. It's removing the middle man so to speak.

For instance when he write

"The laws that he is talking about are licensing laws and other laws put in place to protect employees, customers, and neighbourhoods. These laws are not all perfect. But the sharing economy has nothing to replace them beyond magical thinking about “trust” (with little accountability)."

He is basically cherry picking. There is also quite a few laws that are actually hindering progress.

Technology does move faster than legislation.

> There is also quite a few laws that are actually hindering progress.

Definitely. I think this is one of those areas where the right way lies somewhere in the middle between the two extreme positions. Yes there are a lot of shit laws - but there are also a lot of great laws enacted for citizen protection and we should be careful this joyful wave of "disruption" does not throw the baby out with the bath water.

The 'sharing economy' described in the article is not so much about sharing as it is about making money. You don't share your apartment on AirBnb - you sell it.

I believe that is exactly what he said:

> "The sharing economy is not an alternative to capitalism, it’s the ultimate end point of capitalism in which we are all reduced to temporary labourers and expected to smile about it because we are interested in the experience not the money."

The term "sharing economy" is an oxymoron as it stands, firmly rooted in the Smithean notion of a greater good being advanced through individual and ultimately selfish actions. Either somebody shares, or somebody sells, but you cannot have both. The dichotomy of sharing and selling is essentially that between (pre-capitalist?) trade (quid pro quo) and sale, where the first one is based on utility value while the later is based on abstract commodity value.

At some point, society needs to digest this 'sharing economy' and understand its pros/cons. On one hand, it provides a way to make money. On the other hand, the laborers are often putting themselves in situations where legally they should be covered with various forms of insurance as well as wage regulations (paying them as 'consultants' is the current method by which all of this is sidestepped).

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