Air Me‘n’Me. Or, how the sharing economy turned us into unreasonable consumers (& why that’s bad for everyone)
The peer-to-peer economy promises a means for “collaborative consumption”—delivering on affordable prices, new jobs and sources of income for people and amazing experiences for everyone. But these exchanges also have the tendency to breed unrealistic expectations, leading users to take advantage of providers in ways made uniquely possible with this rise of a distinctly new virtual middle-man.
When I was growing up, my dad worked as an automotive parts salesman. He owned a big truck which he filled with brake cleaner and hose clamps and air filters and windshield wipers and every day he’d stock his truck and drive it across Eastern Massachusetts distributing them around. He made calls, took orders, made deliveries, stocked, re-stocked, invoiced and all too often, followed up with repair shops who were three months overdue on their bills. And for almost 25 years he made a decent living off of it, self-employed, a one man show. If you asked him what he did for a living, he’d tell it to you straight: he was a middle-man.
The term middle-man doesn’t necessarily conjure up the most positive connotation and probably never has. People have long associated it to being that step you want to cut out — the cost-adder, an extraneous layer. But whether or not we realize, we interact with middle-men every day without calling them that. Whether we order something on giant Amazon or little Etsy or we book a flight through CheapTickets or listen to music through Spotify. All product middle-men, in their own ways. And of course, the sharing economy has extended this beyond products, to services. The [Uber/TaskRabbit/AirBnB, etc.] app is delivering a person who does a service to a customer; the app is delivering a customer to a person who does a service. Like my dad, these companies are merely glorified distributors. Like my dad, they are simultaneously only as good as the products they peddle and only as successful as the customers they reach.
What’s great about the sharing economy is that it’s opened up new opportunities for us to find cheaper and easier ways to do the stuff we always did. We always booked vacations, always needed someone to watch the dog while we were gone, and always needed a ride to the airport. But amidst this culture shift, false expectations emerged: when people learned they could do all the stuff they used to do, more affordably and efficiently, they also began to think that meant they could get it better, too.
Which is interesting, and it leads me to wonder why, exactly. When did the age-old, “you get what you pay for” become, “you can have it cheaper and better and easier”? As a friend mentioned the other day, if he gets into a cab and it smells like cigarettes, he’s not surprised. If he gets into an Uber and it smells like cigarettes, he’s leaving a bad review. So where does this sense of entitlement come from?
Put simply, every sharing economy app is serving as an accountable agency that vets their service providers by way of the simple reality that their app is only as good as the people driving the cars/walking the dogs/cleaning the houses. One terrible story catching on in the news could rattle or even shutter their company, and the newer the company is the truer that statement is. And as consumers we know this.
So, why do we so easily “forget” that the service we’re getting is coming at a discount anywhere from 20-50% off the market rate? Because we can. Because it’s easy to take advantage of services via the peculiar position these companies are in. Because for the first time, the middle-man is getting rich by cutting costs for the consumer, and the service provider is caught paying whatever the difference is. Basically, it’s back asswards, as they say.
The old-school middle-man structure made sense. That middle-man offered some additional value and passed it along in a mark-up to buyers. This new structure is problematic, and the consumers themselves play a role in its inherent dysfunctionality. But it doesn’t have to be like that, does it?
You pay for what you complain enough about.
I never felt the “you get what you pay for” truth more than the time I booked a $45/night room at an AirBnB in Williamsburg (Brooklyn, not Virginia but that will become self-explanatory in a moment). You can smell where this story is going, probably, if you’ve ever known the joy of staying in a $45/night room in Williamsburg. Around 5am the first night of my weekend stay, Todd the Next Door Over Roommate whose intimate relations I’d had to listen to through thin walls for about an hour earlier in the evening, walked into my room buck-naked (sleep walking?) to find me under covers screaming to get the [expletive] out of there. Hours later I packed up and left and messaged the AirBnB host (who was away at the time and claimed this Todd character had recently moved in). He promptly refunded me for the second night when I told him I would not be staying there any longer. He did not refund the night of the Incident, and I didn’t press for him to.
Do you know why? Because I had chosen to stay at a $45/night AirBnB room in Williamsburg so I decided to shake my head and say, well, it sounded like it might get weird, and it did.
The reason I tell this story aside from it being kind of hilarious (in retrospect) is to highlight what I believe were the reasonable interactions of a service provider and a consumer. I hadn’t looped in AirBnB, I had issued my complaint in a message and explained why I wasn’t staying for Night Two with Todd, and the host had apologized and sent me a refund for my unused night. I left him a generously positive review, considering the overall experience, though I did caution guests to lock their bedroom doors. That AirBnB appears to be doing fine; so good in fact that they’re now listed as a $50/night room in Williamsburg. Hopefully Todd-free.
A few months later, while staying at an AirBnB in Austin, I tweeted about the awesome experience I was having with a host who was giving me a mini-tour of the city by car after scooping me from the airport. AirBnB saw it and sent along a $50 Visa gift card just to say thanks for the kind words. In some strange karmic way, my experience with them had met back at a good place.
In trying to understand how it happened, I’ve come to the conclusion that for the most part, leaving out extremely rare circumstances, positive experiences are bred from human-to-human interaction. When you hide behind your screen and lean on the virtual middle-man instead of just communicating like a person, you enter a slippery cycle of neglecting the “share” part of the sharing economy, and you compromise the integrity of the system. The system should be benefiting both sides, or it doesn’t really work.
Can’t we all just work things out?
I also know first-hand the service provider side of the sharing economy as well. I’m a DogVacay host, along with my roommates. We aren’t full-time dog-sitters (it’s a side gig), but we are responsible and loving and offer our services at about half off what you’d pay a kennel. After over a dozen successful vacays and many positive reviews, we recently got our first negative one, and I was really upset about it. Not just because it feels terrible to have your dog care-taking skills publicly questioned, but because the review was unreasonable. After hearing both sides, DogVacay agreed it was unfair enough that they moved it to the bottom and asked us to let them know if we felt it was hurting our business. I think that was nice, and I should mention that I do feel that they “get it” and truly do care about and value their hosts.
But I can’t help but wonder if the apparent grievances this owner had when he picked up his dog (a day late, by the way, which we happily accommodated) might have been worked out had he just voiced them to us in person, or in a message. We’d be more inclined to take the “customer is always right” route and offer someone a refund, warranted or not, if it meant avoiding a nasty review. DogVacay wouldn’t have lost their fee cut, the owner would have saved money and we would’ve kept our 5-star rating. Doesn’t it benefit all three parties a bit more to work things out like the civil human beings we are?
And there’s real risk to letting users take advantage of the system (via unfair reviews, for example): these companies could lose the service providers that constitute their only real value.
Some unsolicited advice.
So where does this all leave us? Can we meet halfway? Below, my advice for companies, for users, and for providers.
- If you’re going to make public reviews available for one side, you should make them available for both sides. At the very least, you should allow provider responses to user reviews on public profiles. This enables and empowers both consumer and service provider to make informed decisions about who they do business with (i.e., gives providers the right of refusal) and be accountable for how they treat one another. Uber offers this to drivers, for example. For consumption to be truly collaborative this is the only review system that is fair. Period.
- Develop a means for rewarding your top service providers. This might mean bonuses or perhaps offering benefit programs similar to the ones offered to your employees. You could also consider a structure that would build in small additional user-side fees/tips for some top providers, or all providers if possible, which would help you to fund benefit programs so that users who are using your company to support a full-time job are covered in terms of health and other normal perks. You have a stake in your providers staying happy. Keep in mind that over time they’re gaining the experience and connections needed to market their services alone. There’s no guarantee they won’t leave your site to take their business off on it’s own, so make it advantageous for them to stay.
- Keep in mind that the service you’re ordering is provided by a human being. A small fairy is not dropping by your house to clean. A robot is not picking you up in their car. Have some empathy for your fellow man. Have a conversation with them.
- Do the math on the sharing economy expenses you’re incurring. Every $8 UberX ride that means you didn’t have to pay $12 for a cab ride, or $200 to replace a phone that was stolen while walking through a bad neighborhood. Every $80 AirBnB that means you didn’t have to pay $300 for a hotel room. Consider the alternatives and put these services into perspective.
- Be a responsible consumer (i.e., ‘vote with your wallet’) by paying attention to the practices of the companies/apps you’re using. Don’t use services if you disagree with their practices.
- Do your own math as well. Make sure it’s profitable for you to continue using the company you’re listed on versus another company or versus marketing your own services.
- As much as permitted/possible, create authentic points of contact with your customers. Encourage them to leave you a review. Follow up and ask them to share their feedback.
The sharing economy has come under a bit of scrutiny lately for reasons that dance around what I’ve mentioned so far here, labor issues and the like. But up until now all the blame seems to be squarely placed on companies. The thing is, companies are just trying to deliver what consumers are demanding. So it begs the idea that perhaps consumer demands are unreasonable. And the providers are paying the steepest price. But for how long?
My dad was a great salesman. He was a good talker, but he also knew the in’s and out’s of auto repair, what products to order and what was worth the money. Despite mark-up pricing, his customers ended up better off because he provided that element of customized support. The thing about my dad though, no matter how good he was at his job, he never really got rich. The Uber’s of the world know why.
But in their efforts to control their system, they’re compromising that certain element that I believe kept him in business, be it a small business, that element that you optimistically imagine collaborative consumption will offer. Because beyond auto repair, he knew his customers’ kids names and he brought them my mom’s homemade fudge and cookies at Christmastime and he always had treats on his truck for the dogs that hung out at all the shops. Service with a smile, as they say. Maybe there was something about buying from a guy who also had grease on his hands and a Labrador by his side that kept people loyal. Maybe he put some humanity into selling car parts.
But if the old-school middle-man created human connection, it sometimes feels like the new sharing economy is chipping away at it, slowly, in a way most people haven’t bothered to notice. But I think eventually we will.