What is ‘the sharing economy’? This is a term that is being hotly contested and debated right now, both in the media and among leading thinkers and practitioners.
One of the biggest questions about what constitutes ‘sharing’ is whether it is truly sharing if exchange of money is involved, and whether monetised exchange is the only element that differentiates what seems to be a very broad spectrum of sharing activity.
The venture-capital backed giants of the sharing economy have been held up in the media as representative of a much broader sharing universe, of which they are only a part.
The likes of Airbnb and Uber are about enabling people to leverage idle assets to generate revenue, and offering alternatives to the existing hospitality and transportation options of hotels and taxis. While these platforms may deliver benefits in some respects, there are drawbacks. For example, the diversion of properties from the rental market into Airbnb can impact on housing access and affordability — one of the reasons that regulators in San Francisco recently introduced legislation relating to short term rentals after six years of Airbnb operating.
And while there have been many benefits for the otherwise unemployed or underemployed offered by the monetised elements of the sharing economy, there are also some major concerns. The freelance appeal for drivers who earn income via car sharing platforms or relying on bids for their labor also begs the question whether the employees are better off than if they worked for a traditional company. What about employment security and a living wage? What about pensions, sick leave, vacations?
While efficient use of assets such as equipment and space are one thing, there is a lot more to labor than its efficient allocation — we’re talking about human beings. As yet, there are few legal or regulatory structures in place to address such important labor issues, like the California App-Based Drivers’ Association, a not for profit membership association which represents the interests of these workers.
There’s also an equity issue — if those creating and scaling successful for-profit platforms are benefiting from the commons, such as use of the road infrastructure, shouldn’t they also be contributing to the commons, which requires investment and maintenance? The same piece of legislation recently brought in by San Francisco also sought $25 million in back payment of taxes from Airbnb, a company now worth $10 billion, though this aspect of the legislation was not passed.
And there’s an even broader equity question — how can the benefits of this kind of sharing economy be realised by those who do not own property or a car?
Is this all we wanted or expected from the sharing economy? The co-option of the term by ‘platform capitalism’ — increasingly the target of vitriol from observers (much of it justified) — has left many questioning whether this sharing endeavour is any better than the status quo that sharing platforms are currently disrupting.
But perhaps the point of differentiation is not about whether money is involved in peer-to-peer transactions.
Neal Gorenflo of Shareable expressed a useful distinction between sharing that is transactional and sharing that is transformational.
While there are no absolutes, in general ‘transactional’ sharing is typically profit-driven, and more about the efficient operation of existing systems, resource efficiency and cost sharing.
More efficiently using existing assets (be they physical, virtual, skills or time), whether or not monetary exchange is involved, contributes to a more effective operation of the status quo. This can be a good thing, for example when people can access what they need, when they need it; and when it results in less resource consumption.
But it does not impact on existing power structures.
‘Transformational’ sharing can have some or all the characteristics of transactional sharing (more efficient use of resources, spreading costs), but there is an additional, critical element — it involves a shift in power and social relations. This means who owns and controls the processes by which sharing occurs, who benefits, and whether it is strengthening the commons or resulting in the commodification of our lives. Integral to transformational sharing is that it builds ‘social capital’, strengthening relationships and resilience of communities through sharing and co-operation.
Transformational sharing can be found in the gift economy, in the co-operative movement and in not for profit social enterprise. Examples include:
CoWheels Car Club, a car sharing platform in the UK that runs as a not for profit social enterprise, with all surplus reinvested back into the organisation’s social mission.
Vandebron, a Dutch peer-to-peer platform which enables residents to buy and sell energy directly from each other, bypassing utilities altogether. Could there be unintended consequences for other citizens as people effectively ‘opt out’ of the grid? Possibly, however again clues lie in looking at why and how a sharing platform was set up and whom it is intended to benefit.
It’s important to scratch the surface of anything calling itself ‘sharing economy’ and look at the legal and financial structures underpinning them as well as the mission of the organisation and how it empowers people, as platforms can be offering a similar service, but be based on very different operating systems.
Perhaps the most helpful articulation of the difference between transactional and transformational sharing is this 15 minute video created by highly respected ‘sharing lawyer’ Janelle Orsi of the Sustainable Economies Law Center in the US. Here, she digs deeper into what sharing really means, covering topics including:
1. Shared Control
2. Shared Responsibility for the Common Good
3. Shared Earnings
4. Shared Capitalization
5. Shared Information, and
6. Shared Efforts
The term ‘sharing economy’ has been co-opted by one sub-sector of a broader cosmos of activity that sits along the transactional-transformational sharing spectrum.
It can and should be reclaimed by those seeking to strengthen the commons, those who are working to progress urgent social and environmental change by steering humanity away from extreme inequality and ecological collapse, and towards a world that works for us all.
A more efficient business as usual isn’t going to get us there, and as William Rees, creator of the Ecological Footprint concept, once noted: ‘There is no particular virtue in being more efficiently unsustainable.’
It’s time to reassert the virtue and values of the sharing economy.