Collaborative Economy as a global economic model? Hopes and Loopholes in the system.

By Lizzie

$15 Billion!!! This is the estimated value of the collaborative economy market in 2015. $335 billion is the expected value of the collaborative economy market in 2025. More than 9000 start-up are operating in the collaborative economy market field (References: PricewaterCoopers; Financement participatif France; Alternatives économiques ; ministère de l’économie, de l’Industrie et du Numérique).

Obviously, the collaborative economy is not a simple trend. The question is: does its tremendous expansion lead to a shift from capitalism to the collaborative economy? Can our changing consumer behaviour be replacing a system already set up?

The sharing economy influences many domains: from the property sharing (car, accommodation, tools…), the workplace sharing (coworking), work tools (fab lab) and even financing (crowdfunding). Most of these initiatives are made possible through the use of digital platforms. Many influencers and experts in the topic would say that the 4 foundations are: the economy, the ecology, the solidarity and the digital technology.

Jeremy Rifkin, a famous american essay writer and foresight specialist, believes in a third industrial revolution; where the sharing economy is an alternative to capitalism. He believes that the individualist consumer is shifting to a concerned and connected consumer.

This video demonstrates the hopes of this sharing economy and the belief that it could be one day a global economic model:

Well, let’s face it! There is a big polemic about this collaborative economy. Not everyone shares the same hopes and belief about it.

Tim Worstall on its blog « Coppola Comment » (2015) explains that nothing is produced from the collaborative economy. He says that it is all about consumption and that any economy based on consumption has no future. His point of view lies simply in the fact that working on the « existing » is not enough. He considers the sharing economy as a service and not a production and criticizes the collaborative economy as doing more bads than goods in the global economy; as we already struggle in increasing the work productivity in the services field. To summarize his point of view approximately: stagnation economy and collaborative economy are one same concept.

While the slogan of the sharing platform Mutum is « The more we share, the more we own » ; others would tend to say that this economy moves toward an economy of dispossession. As a matter of fact, many would rather rent at a low cost than becoming owner. Others would say that it became a motive to buy more as it is now so easy to optimize any product through selling or renting platforms.

There are indeed many critics that tend to make us doubt about its viability as a sustainable economy. The three main critics according to Michel Leclerc are the:

1) Loss of original values

2) The risks of job instability

3) The Collaborative economy towards an economy of quasi-exclusive monopoly

1- Loss of original values

While many believe in a shift from capitalism to a sharing economy, where the moto seems to be « All for one, one for all » and where the values are solidarity and conviviality; others like Damien Demailly (research worker at IDDR) denounce its ambivalence between « utopia and big business ». Collaborative economy at its beginnings preached the words of an anti-capitalism culture. But, some businesses of the collaborative economy which took more and more importance started to moult in the current market economy; where the moto would be « make more and more money ». In a co-written article, Valérie Peugeot, Jean-Samuel Beuscarte, Anne-Sylvie Pharabod and Marie Trespeuch admit that some users tend to give less to charity causes as they can perceive some monetary compensation on selling platforms (such as Ebay or VideDressing…).

2) The risks of job instability

Many users of « collaborative platforms », whose motive is to earn some money, complain about their status and their work conditions. Let’s take the example of Uber:

In an article, Gilles Bridier (economic journalist), demonstrates that Uber is not based on sharing values but on job instability. Uber takes a 20% commission for each ride and doesn’t give to the drivers the freedom to set their rates. Moreover, Uber does not take for account all the operating costs for the vehicles and the social taxes; leaving the totality of these charges to the work force. It is basically an old capitalistic dream, far from what we may call a « collaborative » system.

Many companies in the collaborative economy take advantage of the Self-Employed status (created in 2009 in France) to benefit its flexibility and reduce their operating costs instead of creating more jobs for salaried workers.

Do collaborative platforms should be used as a transitory process from one work to another to reduce unemployment? Can we or could we one day live comfortably with such a status? Would it require more initiatives from the government to make it possible?

3) The Collaborative economy towards an economy of quasi-exclusive monopoly

Jean-Laurent Cassely (French journalist) explains in an article that only a small minority of initiatives in this sector arrive in a hegemonic position; as the philosophy is as simple as « Winner takes all ». No one needs a second Airbnb or another Uber or BlablaCar… For what? Getting fewer choices? A successful platform becomes then the only master of the market.

This is undoubtedly not an economic ideal.

Our society is definitely changing and I believe we must embrace this change. However, we probably must remember that the challenge is not only technological but also cultural. The need is maybe not to replace a system but to improve it by engaging alternative systems such as the collaborative economy; that allows a circular economy. The challenge seems to be about finding the proper balance.

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