The Shared Economy Enters Its Teenage Years
The shared economy is reaching an awkward adolescence. Ride-sharing services like Uber and Lyft have taken fire for paying drivers too little and contributing to congestion. A recent economic research paper has revealed a correlation between Airbnb rentals and rent increases. Both of these findings are shaking the industry as the landscape of tech companies like Facebook and Apple are also drawing criticism. Will this sea change in public perception reach shared living?
A factor to note in each of the aforementioned companies is that recent findings and events are revealing outcomes that are at odds with the company’s stated goals. The raison d’etre of Lyft was to “take these personal vehicles that are parked at all times and expensive to their owners and make better use of them.” But the goals of the ride-sharing company go further than that. In an interview with NPR, founder John Zimmer stated that “We believe that by building what we’re building we can have cities designed around people, not cars…we can impact society in a way that’s bigger than the transportation we provide.” While the New Urbanist ideals Zimmer professes are admirable, Lyft has not reduced the number of cars on the road, and is actually contributing to congestion in dense urban cores. Researchers at UC Davis found that “Those who have reduced the number of cars they own and the average number of miles they drive personally have substituted those trips with increased ride-hailing use.” Between questions about the hourly wage of a Lyft driver and the ostensible failure of Lyft as a catalyst for better urban design the company has some soul searching to do.
Zimmer no doubt empathizes with CEO and founder of Facebook Mark Zuckerberg, who has publicly admitted that his company’s product has had unintended consequences.
If entrenched tech and shared economy companies are facing backlash, where does that leave shared living? Not completely spared, it turns out. A scathing review of Common emerged in the March issue of The Baffler, an irreverent left-leaning print and web publication. The article’s author Zach Webb even goes as far as to melodramatically characterize the co-living venture as “a cancer.” If the reader makes it past his critiques of late capitalism conflated with Common’s aesthetic and the tired characterizations of young millennials “slumping toward the mirage of gainful employment…working as unpaid interns and subsisting on meager service worker paychecks” it becomes clear that the article was inevitable, it’s target a scapegoat for the complicated feelings many left-leaning city dwellers have about new development.
The core argument of Webb’s article does dovetail with the growing sentiment around shared economy companies, however. The article accuses Common of shooting itself in the foot — accidentally contributing to the problem it set out to solve — in much the same way that Lyft or Airbnb have been criticized. It suggests that in Common’s pursuit of frictionless shared living it has dispensed with shared living’s greatest quality: the awkward, messy friendships and social encounters that make urban(and shared) life unique. Whether you subscribe to Webb’s criticisms or not it’s a salient point that the best laid plans of young startups often go astray.
How can shared living avoid the ironic position that much of the shared economy seems to be in? One distinct advantage is that the field isn’t dominated by one or two big companies. Diversity is perhaps the greatest asset co-living has. While sharing one’s car or one’s spare bedroom only has a few business outcomes, shared living has the potential to generate as many products as there are consumers. Co-living is still a young industry with much room for growth.
Still, the specter of companies like Lyft and Facebook exacerbating the problems they hope to solve looms heavy over an industry so concerned with the public good. How can shared living avoid the same fate as it’s older siblings? PUREHOUSE LAB is committed to studying the co-living industry, and is a great place to share and compare data and connections with other experts in the industry. For co-living ventures that believe in their ability to solve housing and social challenges, the Lab is key to ensuring that those goals are accomplished.
