Why Is the ‘Sharing Economy’ Starting So Many Arguments?
Demonstrators surround a private taxi in Paris. (Associated Press)
In London, Paris, and other European cities, widespread taxi strikes against the startup Uber have been gridlocking traffic. In New York, renting out spare living space to short-term visitors via Airbnb has become a heated regulatory issue. In San Francisco, the city attorney has just ordered Monkey Parking, a service built around auctioning off public parking spaces, to knock it off.
The uniting source of all this controversy is a concept that sounds like a friendly idea but that’s sparking some startlingly unfriendly responses: “the sharing economy.”
If you’ve bumped into these controversies, you may be confused about how this “sharing economy” thing can sound so virtuous — it’s sharing! — yet spark such vociferous opposition.
Here, then, is what you need to know about the sharing economy and its discontents.
What is it?
Thanks partly to all the squabbling, most any definition will be nitpicked by somebody. But as broadly as I can, here’s how I’d describe the sharing economy, using Airbnb as an example:
In short, it’s a system that uses technology to link supply and demand in previously impossible ways. For instance, lots of people own extra space — from a spare room to a vacation home that sits unoccupied most of the year. And lots of people need somewhere to stay while traveling — and end up anywhere from a friend’s couch to a hotel.
Suppose there was a service that could match these parties up in a way that benefited both? The traveler gets somewhere to stay that’s better than a couch but cheaper than a hotel. The space-owner makes some cash.
Apply that idea to short-range car travel and you have Uber (and similar outfits such as Lyft), matching someone who needs a ride to the airport with someone who will handle that for a fee.
Now apply that idea to … whatever you can think of. Parking spaces? Parking Panda is on it (and, for now, so is Monkey Parking, but that’s the one San Francisco’s city attorney dislikes). Laundry? Washio is doing that. Odd jobs? TaskRabbit matches those who need them done with those willing to do them. And so on.
What’s so great about it?
Silicon Valley types go gaga over all this because it represents “disruption” — tech-driven change that redefines entire business categories, crushing established players and richly rewarding innovators (and their investors). Thus sharing economy darling Uber is said to be worth $18 billion and Airbnb, $10 billion.
That said, most sharing-economy advocates tend to place their emphasis on social benefits. Author Rachel Botsman’s oft-cited May 2010 TEDxSydney talk on “collaborative consumption” serves as a pithy opening argument for the principal virtues of the sharing economy.
First: It’s efficient. Whether it’s an extra room, a DVD we’ll never watch again, or even spare cash, lots of what we own may have what Botsman termd “latent value to someone else.” She points to bartering platforms, car-sharing services, and peer-to-peer lending mechanisms.