What's not to like about the sharing economy?

Fri Apr 10, 2015 2:17:34 pm
by Jeff Whittington.

"Peer to peer economy"; "collaborative economy"; "sharing economy"; the "Mesh." What the heck is it? Is it a good thing? Why does it always have to be so disruptive? Can I get Google Express to drop some off?

These were a few of the somber questions considered April 9th in a Haight Ashbury Neighborhood Council program on the subject. Presented by a pair of well-informed club members, it drew a good crowd on a Thursday night.

The main presenter was Booksmith co-proprietor Christin Evans, one of the movers behind the Haight Ashbury Merchants Association, and an obvious expert on saving local brick-and-morter businesses. Evans recommended a book called “The Mesh” by Lisa Gansky as providing a good summary of the rise of “sharing.” Gansky points to a conjunction of three phenomena appearing in the middle aughts:

  • The explosion in “pocket computers” (smart phones). These little buggers and their “apps” are the Mesh's great enablers, though regular computers play a big role as well.

  • The rise of social media and its ability to supply information on providers and consumers, creating trust. A responsible service provider will get good reviews.

  • People looking to spur job growth, and others looking for new employment opportunities, especially following the 2008 crash.

Taken together, these things have driven this portion of the market to function with a much greater degree of precision and efficiency, allowing cottage industries to flourish. You can operate a rare book store out of your basement, or set up a personal food cart and get customers to it in a matter of minutes. “We're living in a world where people can become businesses in ten minutes,” says AirBNB's Brian Chesky. Another oft-cited advantage is that “sharing reduces wasted resouces and the time required to access them.” It also, in theory, reduces the impersonality of doing business, establishing and relying on personal connections.

A few of the new models included under the “sharing” rubric are:

  • The online resale of secondhand goods (Ebay and its ilk)

  • Book, music, and video stores being replaced by services like Amazon, iTunes, and NetFlix

  • A plethora of new transportation options: carshares, private shuttles, “personal taxis”

  • New options for the procurement of living quarters, such as AirBnB and HouseShare

  • Hundreds of new "citizen provided" services: pet care, housekeeping, repair services, personal food service, and the like; all able to be matched up and scheduled over the interwebs.

Some estimate that by 2020, 40% of the economy will be absorbed by the "Mesh".

So what's not to like? The biggest problem is the middleman. Web-based services like Lyft and AirBNB are giant moneymaking enterprises looking to do what such entities normally do: maximize profits. All too often this comes at the expense of the people working for them, who, because they are considered independent contractors, do not have benefits or workplace protections. At the same time as saving the employer money, undercutting the "normal" competition, this can put the "contractor" at considerable economic and physical risk. It also tends to be the case that when you hear a large figure cited for a Lyft driver's income, this is gross income, and does not include costs like gasoline or vehicle maintenance.

When buying from an independent bookstore through Amazon, you will always pay Amazon upward of $3.00 merely for providing the connection. They get away with this simply because “they can”; because Bezos came up with the idea, and independent stores have not yet been smart enough to come up with a successful cooperative model to compete with it.

Another problem is lack of oversight and regulation. Restaurants are inspected; personal food carts are not. In theory, “sharing” can be reasonably well-regulated; in practice it currently is not.

A third problem, particularly in San Francisco, is disappearance of the common. Bruce Wolfe used a map of “Bruce's neighborhood” to illustrate how, during the course of a single year, twelve parking spaces disappeared from a single block in the Haight, turned over to “return to base” rental services and similar enterprises. The city justifies this sort of thing in the name of getting private cars off the streets, but in any case, the space once belonged to the public and now it does not, and there's been very little discussion of how appropriate the practice is.

Fourth is the general, overarching issue of privatization, of formerly affordable municipal services being replaced by for-profit enterprises.  Are we sure this is the direction we want to go?  Will MUNI be crippled by competition from private bus services?  What will be the result for the average passenger?

Finally is the issue of many of these businesses not actually operating as what they pretend to be. AirBNB skirts a lot of municipal hotel and renter laws by claiming its purpose is to help you rent out your home while away; in reality, 40% of AirBNB properties in the city operate as fulltime hotel rooms.  Many people actually buy cars solely for the purpose of making money "sharing" them.  They are operating ersatz rent-a-car businesses.

How did we get in this situation of private buses illegally parking in red zones, parking spaces disappearing without notice, and private residences operating as hotels?  Most of it came out of "pilot programs" resulting from a Mayoral study commission convened four years ago and presided over by Ron Conway.  We are paving the way toward a future we have not thought a lot about.

HANC will consider various aspects of the Mesh in greater detail over the next few months.  Stay tuned.

Tags: HANC, sharing economy


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