For too long now I’ve been researching and advocating on behalf of systems of shared use. This year, the ‘sharing economy’ has shown itself to be overwhelmingly an anti-regulatory, precariat-creating way of monetizing social interactions. The term has been so exploited by some of the most vile, greedy technolibertarians around that it is time for me to write off more than a decade’s work. (When I do, I will refer to it as my ‘failed research focus startup’ so that it actually bolsters my credentials.)
But because my other primary area of research has recently been revealed to be indubitaly an anti-Semite (I had before now thought that Martin Heidegger was that rare beast, a non-anti-Semitic uber-Nazi), I feel the need to make a last pitch for what I think is and could be the significance of ‘sharing economies.’ In particular, I want to try to defend the term ‘sharing,’ or argue for why it should be reserved for certain kinds of systems, ones that could actually change how our societies work from the current ‘business-as-usual.’
In the 1990s, while writing a doctoral dissertation on Heidegger, I started working at the EcoDesign Foundation, a not-for-profit think-tank that aimed ‘to advance the practice of design-enabled change toward more sustainable futures.’ ‘Green Design’ at that point was a very pragmatic, supply-side, reformist project of cleaner production. The EcoDesign Foundation tried to up the ambition of ‘green design,’ advocating the need for systems-level change and exploring the power of design to bring about those changes. Over the course of that last decade of the 20th Century, it became apparent to everyone involved in ‘ecologically sustainable development’ that not only were their efforts only ever amounting to the ‘less bad,’ but that economic growth was quickly absorbing and then over-taking any eco-efficiencies they did accomplish.
While USAians were over-investing in the Web 1.0, some Europeans started talking about ‘dematerialization’ as a better sustainability strategy. The argument went: over and above problems with this or that toxin or pollutant, societal unsustainability mainly derives from how much stuff is needed. The ‘materials intensity’ of our economies needs to be radically lowered — to at least 10% of current levels, suggested the Factor 10 Club.
The standard manufacturing approach to dematerialization is lightweighting, which has limits and rebounds. At the time — early 2000s — it looked like the internet was not going to be a major source of dematerialization — computers were energy hungry, everyone still printed everything and the tubes were not fat enough for online activities to displace face-to-face ones. So the dematerialization research focus promoted by a number of rounds of EU funding was ‘product service systems’ — facilitating the switch by manufacturers from the selling of goods to the selling of the use of those goods, or servicization. In these systems, businesses retained ownership of the goods they made and so were incentivized to invest in resource productivity, which included what is called these days ‘the circular economy.’ From the customer’s side, this meant shifting from ownership to ‘use without ownership,’ or ‘usership.’ Most of the cases explored were ‘B2C’ as we used to call it in those days — i.e., leasing, hiring, but also pooled access (Kinko’s and car-sharing fleets), and then ‘full-service’ or ‘results-based’ business models (a cleaning service rather than the shared use of a vacuum cleaner). Because of the ‘value proposition’ shift involved, designers were brought into the research.
From the other side of the world — the EcoDesign Foundation was based in Sydney, Australia — this appeared to be exactly the sort of example of sustainable design that aimed at ambitious restructuring of the economy that we were promoting. So from about 2001 I began to research shared use.
On the one hand, the proposition is simple. Let’s say I manage to ‘ecodesign’ a lawnmower to be 25% more efficient in manufacture and use. If I manage to sell 30% of them, the world is no better. But if one of those lawnmowers is used by 10 different households instead of sitting idle most of the time in a shed, I have made a factor reduction in the world’s material intensity. On the other hand, I have a whole series of other design problems, situations that require design to go against most of what it had been doing through the 20th Century:
1. designing the product for multiple users, not just one owner-user (design for shared use)
2. designing the product for more intense use (design for reliability, repairability, modularity)
3. designing the business model that keeps the manufacturer in business (business design, strategic design, change management)
4. designing the scheduling and logistics system for convenient use of the product (service design)
5. designing the social system for making participants feel comfortable (social platform design)
Before the Great Recession killed off generous EU research funding for university-led innovation, the conclusion of the researchers was that the design challenges were too great. The demand-side was not yet ready, and the supply-side ‘race-for-the-globalization-bottom’ had not yet bottomed out. Most significant was that the small scales of the systems being developed and their logistics were not delivering the dematerializations they promised.
So, longish, boring background. But two important summary points:
A. Sharing = Not Owning
For me, a primary motivation for getting (back) into sharing is sustainability. And in this context, sustainability means society needing fewer things. If a system affords people a way of not having to own things in under-utilized ways in individual households, I am going to call it sharing.
Two important consequences:
First — Way before all this talk of ‘sharing economies,’ businesses offered this kind of sharing: libraries, coffee shops, formal wear hire, etc. Sharing economies are not new but rather a new way of understanding the value propositions of businesses, one that recast businesses as potential sources for dematerialization.
Second — If a ‘sharing economy’ service creates a new practice that does not replace another practice that depends on owned goods, then it does not meet this aspect of my definition. An interesting example is when car-sharing enables a household to have a second car. In one instance that I would call sharing, the household still owns one car but the sharing system has allowed them to avoid buying a second. In another instance, the household uses the car share to do away with their previous use of public transport — not sharing.
B. Sustainable Sharing = Scale Dilemma
What the EU research from a decade ago found was that sharing systems depend on density. There need to be a large number of participants in geographic proximity for the shared used of goods to be viable from the business side, convenient from the users side, and low in carbon intensity on the sustainability side.
For instance: There are a huge number of equipment sharing websites, some specializing in sports or gardening or cooking equipment, others sharing anything of a shareable size. But almost none have the scale for you to be able to find what you might need when you need it, and if they do, you will have to undo the sustainability of the transaction by driving a fair way to get it. So for ecological sustainability reasons, sharing systems need to be on the larger side in terms of participant numbers. But this leads to some ‘social sustainability’ problems.
The EU work on PSS-based Dematerialization never substantively arrived in the USA. (There was work on Sustainable Servicization, primarily in chemicals industries — selling pest management or lubrication rather than pesticides or lubricant — but no significant work on materials intensity.)
When I moved to NYC at the beginning of 2008, the sharing economy was nascent. When I ran a course on ‘Sharing Economies’ at The New School in the Fall of 2009, Rachel Botsman and Roo Rogers came to speak about the book they were writing, published the following year, What’s Mine is Yours. As their book suggested, ‘Collaborative Consumption’ was primarily a product of Web 2.0 — fatter, faster tubes; web-enabled mobile; investors desperate to make money; but, more important than all the others, new generations normalized to the web’s mess. Web 2.0 is a cultural shift more than a econo-technical one.
I believe that it is important to take seriously that digital sociality has many new aspects. These are easily occluded by the use of pre-digital terms like ‘like’ and ‘friend,’ but also ‘trust’ and, of course, ‘share.’ But the sharing system startup scene that was emerging around that time did seem to evidence a capacity for people to engage with strangers they encountered on the web in ways that were not and perhaps could not have been well anticipated a decade earlier. Certainly, all that those ‘sharing economy’ startups traded on was exactly what was missing from the EU PSS work only 2 or 3 years earlier.
It is certainly not — as many hoped — that new practices like sharing digital goods (like images or music files) just spilled over to physical goods; the difference between a rivalrous good (one that two people cannot use at the same time without degrading the use value for one or both involved) and a non-rivalrous one is ontological. The capacity for shared use of physical products and spaces seems more likely to be a consequence of the lowered risk expectations (or the capacity to undertake low risk trials) that came with the
- shift from web user anonymity to identifiability,
- enhanced searchability and even locatability
- pervasive immediacy of internet interactions that came with smart phones
- payment infrastructures
Other factors should not be discounted, but these now seem ‘chicken and egg.’ Sustainability discourses had shifted from qualitative problems like pollutants or habitat destruction to quantitative problems like greenhouse gas emissions; and from production-side environmental management to issues of sustainable consumption. Early sharing economy startups therefore did mention the waste reduction their systems enabled. But green groups also appropriated these ‘good news,’ ‘grass roots innovation’ stories. Sharing also played into wider ‘postmaterialist values,’ and the interchange is evident in an e-zine like shareable.
Most significant is The Great Recession. Prior to 2008, sharing systems had to appeal to extra-mainstream-business values because on the supply side, the earnings returns were never significant compared to regular jobs, and on the demand side, the transaction costs were always greater than buy-to-own. Consequently, the reason you participated in a sharing system was because you endorsed the value of sharing itself, not its economic returns.
With the Recession — and more significantly, the fact that the pain of the Recession continues as the wealthy retain ownership of assets (like real estate) while wages and employment remain depressed — systems of shared use look more economically viable: any earnings and savings would help.
So, people with less interest in the postmaterialist value of sharing begin to use sharing systems. Each sharing economy startup then develops positive feedback loops:
- as participation increases, the systems become more convenient, which increases participation
- as volumes increase, the systems become more attractive to investors, whose money buys systems improvements, but also regularizations of the revenues for transaction skimming returns on their investments;
- participants on the supply side only interested in earnings see convenient if not large sources of money, and participants on the demand side see cheap options, and so participation by those less interested in sharing per se increases.
Monstration (the hideousness showing itself)
It is now apparent that the Sharing Economy is manifesting the worst of both worlds.
On the digital platform side of sharing economy startups, identity becomes a project directed at actual financial capital, and not just a social and cultural capital game. I invest in cultivating a reputation that will attract ‘trust’ from strangers-like-me. In so doing, I must make the least authentic role-play in service of others my most authentic self. And the only platforms for projecting that tradable reputation are in turn exploiting my unavoidable performance for their own data-based marketing manipulations.
On the financial side of sharing economy startups, earnings by providers of shared goods and services are constrained to attract demand-side users. If there is surge pricing to attract suppliers during peak demand, the platform’s percentage skim erodes proportions of those increased prices flowing-on to suppliers.
More significantly, the whole system depends on and promotes flexibility: these are systems that offer agile ways of making extra money on top of regular jobs (and/or your creative projects), or allow you to juggle a sharing economy portfolio of service offerings. As with Karl Polanyi’s old adage about the trade-off that accompanied the introduction of capitalism, the cost of freedom is risk.
Lean Startups are deliberately asset-less. Unlike the first dot.com bubble where this extended only to physical assets, this time round it includes payroll. VC-backed ‘sharing economy’ platforms have no employees other than those maintaining the platforms: they have ‘members,’ which means people who have access to selling their goods and services through the databases that the developers own, but who have no employment benefits or earning guarantees.
This — the reliability of the offerings on sharing systems — is a problem also for the owners of the startups. This is why they have surge pricing, and clumsy attempts to improve the service quality of their members.
But their real power lies in connecting the financial side with the digital side via ‘reputation economies.’ ‘Sharing Economies’ have managed to ride the zeitgeist of Web 2.0 by getting users of sharing services to rate providers and vice versa. This audit culture market has become self-policing. ‘Sharing Economy’ platforms are not to blame for this — Facebook pre-exists AirBnB (though Facebook does not pre-exist Couchsurfing, which has user ratings and reviews, nor Ebay)— though the platforms do reinforce it by finding ways of monetizing it more directly than the incumbents with their advertising-based models.
Predictable negative consequences then follow:
- existing regulated industries with benefit-based employment structures are disrupted
- the rentier class increase their real estate ownership as gentrification is paid for by second and third shifts in the sharing economy
- the ideology of culturally undifferentiated technology as liberator is further entrenched.
So here is the most clichéd nightmare of neoliberalism: precarious post-safety-net existence is embraced (for these systems are not being imposed by governments — rather the reverse: people appear to be supporting the new systems themselves) in ways that turn personal identity and social relations into money-making opportunities.
Twentieth Century consumer capitalism stopped at the household door; it could not follow you with the goods you purchased over the suburban threshold. Families, and even neighbors, remained this weird form of socialism within the heart of the capitalist empire. Now sharing economies look like being the privatization of the means of consumption. Every space and product and even moment of time now has earning capacity.
So yes, right: let’s not just hope that ‘sharing economies’ fade away. Let’s resist them; let’s organize in support of traditionally regulated ownership-and-employment-based Freedom.
And we will have to resist hard, because this time round the 1% funding all this has actually enlisted some decent interaction designers.
And Yet… (Friction)
When I teach Service Design, I try to show extracts from a very mediocre Dutch comedy called ‘Rent-a-Friend.’ If I remember rightly, the plot revolves around some guy who does bad art. When his girlfriend leaves him because he has no business acumen, he founds a startup to prove her wrong. The value proposition is people paying to have a companion. The comedy lies in main character’s efforts to police the boundaries of monetized friendship, between prostitution and rent-a-crowd by politicians. The film was released in 2000, way before the dawn of social software.
I show the film to make the claim that the essence of ‘service’ is getting someone who is not your friend to be your friend. You need a retail assistant in a clothes store to give you an honest appraisal of the garment you are trying on if you cannot shop with a real friend. An architect understands your needs intimately enough to recommend the environment you should live in for the next few decades. Just when it starts to rain, a ‘friend’ with a taxi car pulls up on the street and offers to take you wherever you need to go.
Seinfeld did a good job of revealing the trade-offs to this way of understanding service. It can be socially exhausting when all the services you use try to escalate to actual friendships. The value proposition of capitalism, trading with alienated money backed by the rule of law, is the capacity to ‘cooperate without trust;’ you can satisfy your resource allocation needs without having to develop thick social ties. Twentieth century consumer capitalism can be read as the wholesale shift from people-based services to (fossil-fuel powered) owned-goods. The only social contact involved was buying the good from a stranger at a mall, and then a big box retailer, and now online. With a self-reliant set of goods, you could retreat to your asocial suburban bunker and never have to interact with a stranger ever again.
This is how we, in developed economies, got to unsustainable materials intensity.
So an indicator of potential dematerialization might just be the re-emergence of social service interactions — the kinds of exchanges that make rent-a-friend amusing. In the frictionless flow of hyper-commodified materialism, grains of friction, person-to-person encounters that give pause — because they are Seinfeldly awkward or postmaterialistly delightful — could be interpreted as signs of hope. They do not represent a reversal of the Great Transformation, a return of community (which never existed, unless xenophobic), but they might represent something like a re-embedding of economic interactions in new kinds of social relations.
Let me explain. When you interact with a concierge at a hotel, it is permitted to not make too much of a social effort. You shouldn’t be an asshole, but you know that this person is an employee, being paid to be your temporary friend, so you are allowed to be a busy business-person exhausted from travel. And vice versa. When your concierge says, ‘If there is any way I can be of assistance, do let me know,’ he or she does not mean ‘any’ — unless they have sold their soul at too cheap a price to too expensive ‘an hotel.’
When you interact with an AirBnB host, he or she is not an employee. He or she is just the owner — or more likely, the renter; owners tend not to do the social interaction bit in my experience — of the place you will be staying in. He or she is doing this with more of their lifeworld than you could ever grant an employee. There is no hiding that they are doing it to make money, or conversely, to meet people. Even if compelled financially to do it, that this person is taking care of all aspects of the service and not just doing one aspect of a job, is very apparent.
In short, there is something inalienable about this economic relation. And it manifests in the weirdness of all interactions. AirBnB struggles to lower the social costs of these encounters through the interaction design of their platform (profiles, house rules, ratings, etc), but there are frictions, especially in the face-to-face moments — how much of a host are you willing or wanting to be? how social a guest must I be? — that will always be impossible to remove. You can relish these social miasmas — ‘they were such strange people, but it was interesting to meet them’ — or you can dread them — ‘well for the amount I am saving to be this close to the center of town, I will try to talk with them over breakfast’ — but they are inherent to the fact that in these kinds of ‘sharing systems’ people cannot hide behind alienated service employment roles.
This same ‘encountering otherness beyond economic utility’ happens in any of the face-to-face peer-to-peer economies, whether buying or renting or borrowing a piece of a equipment from a stranger in your neighborhood for instance. The ‘fist bump’ you have to do when you get into a Lyft ride is an embarrassing piece of performative branding. But that embarrassment nevertheless still contains potentialities that I at least thought were being eviscerated by neoliberalism. It is not the end of capitalism, but it feels like it might not just be another iteration of capitalism. It seems to be something other than just ever more stuff to privately own.
Note that what I am suggesting as the real value of the ‘sharing economy’ — and by value, I mean, has the potentiality for shifting what our society values — derives directly from what makes the ‘sharing economy’ a source of increased precarity. It breaks with existing models of ‘work’ and the asocial interaction modes they allowed.
What I find particularly interesting is how this aspect of sharing works in the opposite direction as well — in equally dangerous ways. The communitarians are optimistic that the rise of the ‘sharing economy’ indicates that we are starting to be nicer to each other again, recovering neighborliness. Hard liners have had fun skewering the naivety of these liberals with ‘I told you so’s as CEOs try to flout regulations.
But to only see the monetization of social relations is to maintain the fiction that social relations are and should be distinct from monetization. Remember that when Marcel Mauss went searching for something better than exchange relations he found even more indebting gift relations. There is plenty of not so nice power play in any gifting.
Obversely, actual friendships are not exclusive of money, exchange and economics. I might lend my friends money; I certainly lend them emotional and physical labor; I get annoyed at them when they don’t make as much of an effort with my birthday as I did for them. It is no less a friendship for all these reciprocations (though it might be if they turned into calculations).
When solidarity amongst a community amounts to no more than empathetic identification, and is not backed up with resource flows, it is gestural. This is exactly what the neoliberal ideology insists: ‘the most important thing is love, which money can’t buy, so just tolerate your precarious lot because all that really matters is family or nation or religion, etc.’
The ‘sharing economy’ affords me having social interactions, that are also (awkwardly) economic, with strangers, who nevertheless cannot hide behind their roles but are encountered as people. Or at least, this is when it seems to me that the ‘sharing economy’ is more than its VC-backed exploiters or superficial journalistic promoters think it is. This when there seems to be a surfeit within these strange interactions that looks unrecouperable and so resistant to current modes of exploitation.
This is what the ‘sharing economy’ could and should be, what the term should actually refer to. This is what needs to be preserved even as we forcefully resist the rest of what is arriving under that label.
This will be tricky. Less and less of AirBnB is the type of encounter I have described. As investors demand commodified returns, AirBnB looks more and more like every other vacation rental in which you never meet the owner of the property you are staying in. Uberites place false orders on their competitors’ less servile, more person-able drivers in order to make way for their more commodified system. And in general, the ‘disruption’ that ‘sharing economies’ have represented is becoming a formula for privatizing any remaining commons, each of which is branded a government-run wasteful inefficiency.
If there is a definitional fight to have, let’s preserve the term ‘sharing,’ reserving it not for anti-economic niceness, but for economic relations that have a social thickness to them. This is why I began with the dematerialization history of systems of shared use. In the end, sharing is about the messy negotiation of access to goods, goods that in the name of sustainability become more scarce. Capitalism is an alienated way of handling those negotiations; sharing forces you to negotiate with aliens.
Design of Sharing
Three notes by way of conclusion:
It is certainly true that the quickest way to authenticate a sharing economy is to design (or redesign) the systems for shared control: collective or cooperative ownership of platforms; or at the least, make the controlling entities not-for-profits or B-corps that are able to have commitments to serve those who are contributing labor inscribed in their charters and thereby able to override profit imperatives.
Easier said than done, and not just because the imperial egos of the evangelizing techno-funders would hire Blackwater to prevent their profits being taken away (though there’s plenty of financial engineering money to be made in insurance, whether for sharing systems or indeed climate change). The difficulties of these forms of shared ownership lie in their day-to-day running, difficulties that exponentialize at the kinds of scale that I said at the outset deliver more sustainable sharing systems.
Just because the value of sharing lies in the social friction involved, does not mean that sharing needs to be perpetually friction-ful. By far the most interesting and important initiative in the ‘sharing economy’ scene to my mind is the work of the Sustainable Economies Law Center. Janelle Orsi, the organization’s founder, points out how essential a discussion about an upcoming sharing arrangement is. This is done from a ‘no lawyer’ model of legal agreements, what Habermas used to call, optimistically ‘communicative rationality;’ reasonable people thinking through a few scenarios of risk and agreeing what to do in those cases. There is no need for these to be combative, as some infantile scaremongers claim. They are awkward conversations to have — a prenup for example is basically a plan of action when a sharing arrangement unwinds. But once in place, these need not be revisited on every sharing encounter.
A society where groups of people are able to enter into these sorts of agreements — which could be local and/or temporary, or long-standing conventions such as those that manage to prevent almost all commons from suffering tragedies — seems to me like the sort of mature society that just might be able to then negotiate wicked problems like climate change.
Finally, the social friction value of sharing also does not mean that sharing needs to be inconvenient, at least in other ways. As indicated in this potted history, ‘sharing economy’ platforms seem to be a fortuitous convergence of (postmaterialist) values and (locative media) technologies. Convenience, like efficiency, is a bounded rationality, and comparative. Changing values change people’s sense of what is convenient. If they become impassioned about those values, they will tolerate great inconvenience. But if changing technologies in addition make a practice less inconvenient, then the value change required is also lessened.
Of course, the art of de-inconveniencing is design rather than bare technology. And as mentioned earlier, some clever interaction design service flows have made more reliable and even delightful the pre- and post-sharing encounter.
But in the end, there is still always going to be the actual person-to-person meeting in the middle, something that cannot be app’ed.