Opinion: the PR spin belies a predatory business model, designed for bourgeois bohemians and funded by venture capitalists

The sharing economy may be the harbinger of a just transition to a low carbon economy, if it promotes local businesses, values unpaid love and care work, increases social capital and inclusion. But does the feel-good language of the 'gig' economy sound more fun than it actually is?  

High profile, successful, for-profit companies like Airbnb and Uber, bask in the approval of the sharing economy. The term has symbolic value but does not describe all the technology enabled practices attributed to it. It was designed to enable the utilisation of underused assets, with freelancers facilitated by big data platforms.

The platform provider is a matchmaker, whose market knowledge and networks enables them to create a brand and inspire trust. Network effects mean that being well-known increases customer base, which makes the brand well-known, which increases its customer base.

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The feel-good public relations and media feeds belie a predatory business model. The sharing economy operates in the manner of extractive industries, only mining data. The anti-capitalist rhetoric of the sharing economy is just that. Some commentators are critical of its limited capacity, to respond to the ecological emergency or facilitate a just transition to a low carbon economy.

The benefits of these markets are not proven to be widely distributed. Neoliberal platforms justify non-compliance with tax, employment, competition, non-discrimination, and licensing laws by criticising out-dated legal systems. They want deregulation or self-regulation and problematise and challenge regulatory systems to enhance their profit margins.

There is a distinction between hitching a lift or carpooling, and Uber. The latter is more accurately described as on-demand economy. Consumers selling to each other via eBay is part of the second-hand economy. In a peer-to-peer economy, there is no intermediary, for example, opensource software, which is more of a sharing economy.

READ: How the gig economy was a fact of life in the 18th century

The gig economy is promoted as flexible, with workers functioning as entrepreneurs rather than employees, but it means companies no longer provide contracts of employment with holidays, sickness cover or pensions. The risk for service providers is the lack of welfare benefits and employment benefits and for customers the risk is the lack of redress in the event of service failure. Long term relationships between suppliers, companies and customers are gone.

As it exists the sharing economy is no threat to business as usual. It is designed for bourgeois bohemians by private interests funded by venture capitalists. Unless the sharing economy is separate from commercialisation, it will not be a change agent for sustainability.

Governance is crucial in creating a genuinely sharing economy. True sharing means sharing profit as well as risk and consensus decision-making. However idealistic some of the original innovators were, their creations were co-opted by neo-liberal capitalism and effectively contribute to inequality.

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The public discourse around the sharing economy is not yet about the commons, public goods, or a just transition. Transformation happens when people operate from intrinsic values, commitment to social justice, equality, equity, human rights, democracy, and sustainability. True sharing is sharing wealth and risk, power and decision-making, knowledge and information, resources, and efforts, but that is not how most companies in the sharing economy operate.

There are guaranteed economic benefits for platforms. Valuable ratings are freely given freely to secretive platforms, who refuse access to user data to independent researchers. Services are introduced without any consultation. Schor argues that social cohesion is undermined by services such as Taskrabbit as educated, middle class people take work from blue and pink-collar workers.

Bag, Borrow or Steal and Rent the Runway enables women to access high end fashion items for a short time appeals to a consumer instinct as distinct from a community farm or a toy library, which are anti -consumption. Cooperatives prioritise collective ownership. This raises political questions about privatisation of public assets, unjust power dynamics, and participatory democracy. Janelle Orsi makes a compelling case for democratic, redistributive cooperatives.

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A strong sharing economy is local, circular, funded through social finance, supporting a community currency, with time banks creating value for unpaid love and care work, governed democratically by its stakeholders, designed for the public good to enlarge and protect the commons, build and strengthen community.

The UK platform Freegle enables people to give away unwanted items in their locality, achieving social, environment and economic outcomes. Policy makers could support innovative models to ensure that the sharing economy is not solely commercial, eroding workers’ rights, and perpetuating negative externalities.

As it stands the question may be ‘who is sharing with whom’?


The views expressed here are those of the author and do not represent or reflect the views of RTÉ