The Current Situation of the Sharing Economy: A Deregulated Free Market.

TOPICS:

Posted By: WEIJIE ZHANG 2023-10-02

“The sharing economy is expanding a harsh, deregulated free market into previously protected areas of our lives.”

— Tom Slee

In 2017, Tom Slee, an opponent of the sharing economy, posted this prediction about the future of the sharing economy. As the sharing economy rapidly expands into various areas, let’s see how much of Slee’s prediction has come true today.

The sharing economy and its vision

In the current stage of development of the Internet, the concept of the sharing economy based on information and communication technology (ICT) has attracted global attention and brought benefits to the world’s economic development. From the initial European market represented by Airbnb and Uber for shared space and shared traveling to today’s shared charging treasure and shared bicycle, etc., the sharing economy is rapidly developing in various fields. Nicholas A. John, a sharing economy supporter, argues that,” sharing is a natural and innate human behavior and that we have never stopped sharing, but that new technologies are driving these practices. “Sharing is a complex concept on the Internet.

As the sharing economy continues to proliferate, Rachel Botsman introduced us to the idea of the sharing economy in her 2010 TEDx Sydney talk. Echoing John, she argues that “sharing” is something humans are born with and that the Internet is changing human behavior online, with ripple effects in the real world. For the betterment of the sharing economy, Rachel presents a vision of the future in “What’s Mine is Yours: The Rise of Collaborative Consumption.” In this vision, access to goods and services is prioritized over ownership, and collaboration and trust are the foundation of economic and social interaction. Rachel argues that the sharing economy can lead to a more sustainable, efficient, and community-oriented society facilitated by technology and social networks.

A Profit Driven Business

However, at the same time, another group of critics, represented by Tom Slee, argues that as the ‘sharing economy’ grows and changes, the term ‘sharing’ has come to mean more than is reasonable. This suggests that companies operating in the sharing economy, such as Uber, Airbnb, and TaskRabbit, are driven by the need to maximize revenue and market share. They use technology and innovative business models to create platforms that facilitate transactions and generate profits for themselves and their stakeholders. The sharing economy is primarily a business model driven by profit and market expansion. They claim to be a sharing economy because it is easy to be attracted by the vision of “sharing.” Still, they are just business models under the banner of the sharing economy that does not care about the realization of “sharing.”

Sharing economy: Uber

In “What’s Yours is Mine: Against the Sharing Economy” by Tom Slee, the author critically examines the sharing economy and its various platforms, including Uber. Slee’s argument says that while Uber positions itself as a sharing platform, its primary operating model is a profit-driven business. Its focus is maximizing revenue and market expansion rather than promoting true sharing or community. Slee questioned the extent to which Uber truly embodies the principles of sharing. He argues that the transactional nature of the platform, where drivers provide services in exchange for payment, is more in line with traditional business models than a true sharing economy.

In February 2021, one of the representatives of the sharing economy, Uber, was handed down a judgment by the UK Supreme Court. The court ruled that Uber must treat drivers as workers from the moment they log into the app until they log off. But Uber objected strongly to this judgment, arguing that it would only work for some drivers. Reflecting on this matter leads to an interesting question: Why would Uber oppose the court’s ruling, and what’s the negative impact on them?

Uber drivers celebrate as they listen to the court decision on a tablet computer outside the supreme court in London.

Employee exploitation

The sharing economy is perfect for storytelling in the Internet age, and many people will believe it. So capitalists use the slogan of “sharing” to attract consumers, but in essence, they are not doing business. Uber is a good example. Obviously, the driver meets the criteria of a full-time employee, but they only need to use the slogan of “sharing” to announce that we share the drivers’ free time. By using the slogan “sharing” and announcing that we’re sharing our drivers’ free time, they can be categorized as independent contractors rather than employees. This categorization allows Uber to avoid providing benefits such as health insurance, paid vacation, and other protections the employees typically enjoy. As Slee observes, uber’s success is largely due to its ability to avoid the costs of insurance, sales tax, and vehicle mechanical inspections and provide a uniform, accessible service.

Referring to storytelling, here’s an interesting case study. In May 2014, Uber claimed on its website that the median annual income for UberX drivers was $90,766 in New York City. This compares to about $30,000 for the average cab driver, a very surprising disparity. But as the investigation developed further, We discovered things weren’t what Uber said. Uber’s numbers are the median number of drivers who work more than 40 hours a week, and they don’t even consider the cost of owning and operating a vehicle for the driver. The result of this report is that if Uber drivers worked the same hours as the average cab driver, they would be paid even less than cab drivers.

Drivers gather outside Uber’s New York City office to protest in September.

Sharing economy: Airbnb

As Rachel mentioned, Airbnb started by providing cheap accommodation to needy people. It is one of the platforms that best fits the concept of “sharing” by allowing hosts to share their unused space with others, reducing resource waste and promoting sustainability. As Airbnb has developed, it has become the largest accommodation provider in the world, and the most interesting thing about it is that it doesn’t own any real estate, which is perhaps the most amazing thing about the sharing economy.

Tom Slee also believes that Airbnb is the company that best exemplifies the sharing economy. It is a company organized by young people who started it by convincing landlords with empty rooms to provide and rent them to others for a fee. The initiative was so well received that orders to the company’s website exploded. Still, a hidden problem emerged: some tenants rented the landlord’s house and then made money by renting it out, thus disrupting the regular, original occupants of the neighborhood.

Illegal subletting has been made easier by online platforms like Airbnb

Illegal subletting in airbnb has resulted in some families having to rent accommodation, lose their homes or pay higher prices. From this, we can see that while some people enjoy the benefits, it is at the cost of violating the gifts of others. Airbnb claims to be about sharing resources and fostering community. Still, through this incident above, we can recognize that it operates primarily as a profit-driven business model like most of the sharing economy.

The founder of the invisible tourist – Alyse

“As Invisible Tourists, we want to support locals of the places we visit, not make their lives more difficult.”

Platform Regulation

In her 2016 TED Summit talk, Rachel notes, “We’ve stopped trusting institutions and started trusting strangers.” She believes that in the future, user-to-user trust will help the sharing economy development.

Solving the trust issue would require platforms to tighten up their regulation of users, but the profit-driven sharing economy is clearly not going to do that. In November 2015, a journalist named Zak Stone shared a heartbreaking experience with us. On a trip, he was lured to a Texas continent cabin by Airbnb photos. But his father was tragically and accidentally killed by a tree in the house’s yard during his stay at the Airbnb’s cabin. After the accident, Zach tried to contact Airbnb to find a reasonable solution. However, Airbnb’s response was always “has no right to control the host’s behavior and reserves the right to exclude all liability.” Although Airbnb offers a convenient and unique experience, it is clearly lacking in adequately protecting consumer safety. Unlike traditional hotels and accommodations, Airbnb hosts are not subject to the same rigorous safety checks and regulations.

Zak Stone’s view on airbnb

“Airbnb is willing to send someone to make sure your trees look beautiful in their photos, but won’t deal with whether or not those trees will fall on your head.”

 There has been no shortage of such safety incidents regarding sharing platforms. However, after each incident, we find that the platforms always have a uniform response – they do not have the right to control the behavior of the hosts. They are not obliged to take responsibility for the safety of their customers because they are just a bridge company. Zach’s case is a good explanation. The hosts are not landlords. They are also users of the platform and only share unused space occasionally. When an incident occurs, Airbnb doesn’t even have to pick a conflict between the landlord and the tenant. It becomes a direct conflict between the user and the user.

Conclusion

By looking at Uber and Airbnb, we realize that the sharing economy is not just about sharing but is a complex business ecosystem with its own challenges and implications. As the sharing economy continues to develop, the issue of worker exploitation and platform regulation must be addressed to ensure a fair and inclusive future for all participants. To realize the vision of the sharing economy, professionals must regulate sharing economy platforms and address the issues that exist within them. Everything’s not particularly bad, and I hope we can look at the future of the sharing economy with inclusive understanding and optimism and work together to address any potential challenges associated with the sharing economy.

References

SHARE TWEET PIN SHARE

Related Articles