Final word on sharing economy
To conclude on this first section, the sharing economy has some advantages with some explained above. It also contributes to the other businesses success because users will spend less money for example in accommodation with Airbnb and will spend more in other things. With the example of Airbnb it has been measured that this extra consummation due to low cost accommodation represented 600 million in extra income for business in new York during the year 2012. It comes in addition to all the advantages explained such as the flexibility, convenience, social communication and easy access to the self-employment.
However, the goal is not to deal with the advantages of the sharing economy but more about discussing if it can be an alternative to the capitalism. The first thing is that the sharing economy is not very fair and disrupts a lot the classic businesses. In some market segment the sharing economy cannot be in addition to the traditional business and aim to replace them. For example a taxi driver needs to have a licence and pay fees for driving which can cost several thousands of euros, instead of a uber driver who do not need anything. In San José, the cabs reduced their revenue by 30% since uber arrived on their market. Within the media sector, Netflix played an important role in causing bankruptcy of the physical movie rental shop such as Blockbuster by allowing their users to watch content without owning it. There is the same kind of problems with Airbnb and the hotels: for every +1% in Airbnb supply there is a decrease of 0.5% in hotels revenue. In line with these problems, lobbies and governments decided to set up barriers in some industries in order to prevent the unfair competition. It is one of the major threat for the companies using the sharing economy. However the first thing people were looking for by participating in the sharing economy was the fairness.
The second point against the sharing economy is the social discrimination it induces. An experiment of the Harvard business school used fake Airbnb account in order to show racial discrimination. This observation shown that white sounded names are 16% more likely to be chosen than black sounded names. Another study of Airbnb also underlined that hosts from a minority rent their accommodation around 5% cheaper than others. Also, a withe neighbourhood has usually twice more listing than multi-cultural neighbourhood. And it is possible to observe this phenomenon in other market segments within the sharing economy. Uber or Lyft noticed that drivers cancel the rides twice more if it is a black sounding name passenger. In other platforms such as task rabbit, black workers receive less ratings with lower grades. So on both side of the sharing economy, providers or consumers, both can suffer from a kind of discrimination. It has just been explained from the racial point of view but the same kind of discrimination may appear due to the gender.
The third point which can be a problem in the development of the collaborative consumption is that these platforms encourages people to work more especially during their free time. It makes disappear the limit between the professional and personal life. Peoples forget that they work to enjoy the assets they can purchase during their free time.
This idea of collaborative consumption is sustained by the right political wing who thinks it a sustainable alternative to the capitalism. However the left wing of the political spectrum is not really agree with this. The arguments are that firstly these companies change the landscape of the cities and does not benefit to everyone as argued by these platforms. For example Airbnb played an important role in the increasing price of the rent in the cities because of reducing the offer of long term rent. It increases the phenomenon of gentrification. It is basically when reach investors are “cleaning” the neighbourhood by increasing the prices, avoiding the poor and students to come and keep this circle. So in a way it is not really reducing the disparities. The second example is with Uber who argue that it is a real win/win relation between the three parties. However it has been calculated that the drivers are below the minimum hour rate wages. For example a driver working 40 hours a week will get paid an average of 23€ per hour. It is around 3500€ a month but it is a turnover and not what the driver will keep. Uber will take one quarter of this, then the driver will have to pay some taxes to the government. Finally he will have to pay for the fuel, car parking or other things to maintain the car. All this expenses drives to an average wages of less than 1000€ per month, this is below the minimum wage, and a driver, even with 40 hours per week cannot earn a decent amount of money. The status of the drivers is also not very clear and is a source of discussion. Because they are not considered as employees, uber or the third society employing some uber driver do not pay the right amount of social charges. Then there isn’t any protection for the workers and as soon as a problem arrive, the drivers will not receive any unemployment compensation.
Finally it is possible to wonder about what is shared exactly with uber and Airbnb and more globally in the sharing economy? Since the P2P disappeared with the lucrative middlemen operating as a “facilitator”. With Airbnb for example, there is no longer a sharing of a spare room for a little amount of money it is just an easier way to make profit for landlords and businessman who prefer selling through Airbnb to earn more on short term rent than in long term. So the asset is not really shared and it is the same with the responsibility. Quite often when a problem happens during the transaction between the two peers, the platform will use the argument that they are just a “communication tool to link peoples” (Poole 2016).
It seems that the sharing economy does not really exist as a sharing service because it is more about selling that really sharing with the proximity expected at the beginning. The middlemen company take an important part on the transaction and increase the price of the services reaching sometimes the price of a non-sharing company service. It is possible to say that it provides a good services, however it is difficult to say that it is a real sharing economy (Kessler 2015).
Recently there has been some trial to find better alternatives and push the sharing economy further in order to find an economic system benefitting to every member of the community and not only one or two middlemen. The blockchain technology appears as a game changer and will be discuss in the next stories.