“What’s Yours Is Mine: Against the Sharing Economy”
by Tom Slee
The first time I read one of Tom Slee’s articles about Airbnb, I didn’t want to believe it. Using statistics he’d assembled from his own analysis of Airbnb listings, he argued that users like me — who welcomed travelers into their own homes as a way to supplement their income — made up only a small portion of the company’s bookings. The vast majority of the website’s income is derived from entire home rentals, and from hosts with multiple listings:
“Three out of every four dollars that Airbnb makes come from Entire Home rentals, and only 1% from Shared Room listings…. Most of Airbnb’s money comes from exchanges where the host and guest may never meet except to exchange a key….”
Could it be true? Were my own experiences on the platform, as a host and a guest, merely providing cover for nefarious landlords to run illegal hotels in residential neighborhoods, disrupting not just the hotel industry, but the very livability of the cities in which they set up shop?
After reading Slee’s reports, it’s hard to argue otherwise.
Slee’s new book, “What’s Yours Is Mine: Against The Sharing Economy,” is an important counterpoint to the feel-good hype around the rise of the peer-to-peer and on-demand economies. Slee’s sympathies lie with the everyday users of platforms like Airbnb, TaskRabbit, and Uber — and he questions whether these companies really have our best interests at heart:
“Major financial institutions and influential venture capital funds are seizing an opportunity to challenge rules made by democratic city governments around the world, and to reshape cities in their own interests. It’s not about building an alternative to a corporate-driven market economy, it’s about extending the deregulated free market into new areas of our lives.”
Slee is far from a reactionary, and one gets the sense that he really wants the Sharing Economy to work out. He doesn’t advocate regulation for its own sake, but as a necessary defense against corporate greed:
“The main impulse that drove the writing of this book was a sense of betrayal: that what started as an appeal to community, person-to-person connections, sustainability, and sharing, has become the playground of billionaires, Wall Street, and venture capitalists extending their free market values ever further into our personal lives.”
What’s especially troubling is that, as peer-to-peer companies scale, they fail to take into account the cultural and economic circumstances in each locale. Airbnb’s rise amounts to a kind of wholesale colonization of vast swaths of tourist districts in cities like Paris, Barcelona, and Amsterdam — disrupting not just the hotel industry, but local businesses, traffic patterns, housing markets, demographics, and more:
“[Paris] is Airbnb’s biggest market, with over 50,000 listings — so many that in summer 2014 the popular Marais district saw 66,320 Airbnb visitors, which is slightly more than the 64,795 who actually live there…. The company’s claim to let you ‘live like a local’ … sounds increasingly like a cover for an American company that is not interested in understanding that other countries and cities are different, and have the right to make their own rules….”
Similar, Uber has exported its ridesharing algorithms to over 60 countries, spending billions to compete with rivals in China, fight bans in India, and ward off protests from taxi drivers in France. It’s accumulated a net worth of $6 billion for its CEO — all while, incredibly, operating at a loss.
Previous articles have debunked Uber’s claim that its drivers can earn up to $90,000 per year; Slee revisits that here, as well several other criticisms of the company. More importantly, he gets at the bigger picture:
“The taxi service is just one part of a larger traffic management problem that cities continually struggle with…. From balancing consumer and driver interests, to providing predictable pricing, to ensuring individual cars are safe and that the system as whole fits into the puzzle that is urban traffic, there is more to transit than a simple market exchange.”
Bureaucracy, of course, is no surefire solution, and many Sharing Economy advocates cringe at the thought of the government stifling Silicon Valley innovation. But many cities have attempted to work with these companies, and have been met with indifference and outright ridicule.
After Airbnb struck a deal with Portland to collect hotel taxes and require hosts to register with the city, barely 10% of hosts have done so, and Airbnb seems particularly disinterested in enforcing the law. (As a token gesture, the company offered smoke alarms to a handful of its hosts.)
“The broad-brush talk of trust misses the point that most regulations exist to screen those things that customers cannot see for themselves,” writes Slee. “Most tourists cannot assess whether their accommodations are properly protected in case of fire, restaurant customers will not know whether the kitchen handles food properly, taxi passengers will not know whether the brakes of their car are in good condition, and most will never find out. Ratings will never solve these problems, and for this reason alone algorithmic regulation is a non-starter.”
Although worst-case scenarios have been rare, they aren’t unheard of — they include assaults by Uber drivers, deaths in Airbnb rentals, and so on. Here too, the companies have largely washed their hands of the matter, insisting that they are middlemen and not actually in the hotel or taxi business, and therefore not responsible when things go wrong.
Instead, they tout their rating and review systems as a way to weed out untrustworthy users and prevent crime. But as Slee points out, “A one-star rating is no way to deal with assault, fraud, or theft, for which reparations and perhaps even prosecution are required.”
In fact, a ratings system seems particularly unsuited to the kinds of one-to-one exchange inherent in peer-to-peer platforms. Unlike reviewers on Yelp, customers are reluctant to provide a bad review to people they’ve personally engaged with, leading to a preponderance of 5-star reviews and no way to tell an “average” Airbnb host from a truly excellent one.
Furthermore, Uber drivers are penalized for the slightest deviance from a 5-star rating. A driver whose rating dips even to 4.5 can be fired without any warning, and without recourse to traditional labor regulations:
“The reputation system is a way to enforce ‘emotional labor,’” Slee writes. “[S]ervice providers are compelled to manage their feelings and present the face that the platform demands, to become that ‘friend with a car’ or that ‘neighbor helping neighbors.’”
What’s Yours Is Mine delves into a few other sectors of the Sharing Economy, including task-based platforms like TaskRabbit and Handy. Its focus on labor rights and economic justice makes it a great companion piece to Do What You Love by Miya Tokumitsu. But Slee is careful not to place the blame on users of these platforms, or the utopian ideals behind them:
“It is not my intent to make you feel guilty or defensive about taking part in Sharing Economy exchanges. The problems … do not lie with the individual participant looking for a novel vacation or a quick ride across town…. The problems lie with the companies themselves, and with the financial interests using these companies to drive a broader agenda of deregulation in search of private wealth.”
If recent articles are any indication, I expect this book will be the first of many critical looks at the Sharing Economy. Some early advocates of the concept, like Chelsea Rustrum, echo Slee’s sense of betrayal:
“Originally, I balked at the critics,” she writes. “What I neglected to account for is that the foundation of the Sharing Economy is backed by the wealthy, who seek to become even wealthier, thus creating a greater economic divide.”
Hopefully, growing frustration among on-demand laborers and growing awareness among consumers will create enough of a backlash to return the Sharing Economy to its co-operative, collaborate roots. Already, some Uber drivers are creating their own apps, including one by a New York drivers’ network intending to share profits among its users.
If local, alternative platforms catch on, maybe then someday catching an Uber will be as toxic as shopping at Wal-Mart. Writes Slee:
“Sharing Economy companies claim we should trust them and their technologies to take over functions provided by governments: guaranteeing a safe consumer experience, ensuring that employment is fair and dignified, and shaping cities to be livable and sustainable. We should not do so.”