Has the sharing economy been co-opted?
Sandra Edmunds | 29 May 2017
The sharing economy is now massive, with co-working, ride sharing and cooperative housing taking off around the globe. However, concern is mounting that many models are not in the spirit of the true peer-to-peer sharing economy. Is anyone winning except for a handful of Silicon Valley elite?
Cities across the world have begun to reject services such as Uber and Airbnb outright, concerned that the negative impacts are outweighing the benefits.
Jason Twill, director of Urban Apostles and innovation fellow at the UTS’s Faculty of Architecture Design and Building, says it’s an important discussion for cities to have.
“Melbourne and Sydney residents, like those in many global cities – are Uber crazy,” he says. “but folks in cities like Seattle, Portland and Austin, which in many ways are epicentres for the creative economy and cooperatives in North America, are generating a cultural stigma around using this service. I experienced this on a recent visit to Seattle and Portland when several friends and acquaintances requested that I do not use Uber while there.
This idea is “cutting out the competition” and monopolising a sector goes directly against the grain of what the sharing economy is all about. Cooperation, not competition. Democratic governance and local empowerment, not global domination.
“The showdown in Austin, Texas was a very good case in point,” Twill says. “Austin is very creative, funky city that has benefited from attracting talent from across the world to grow a burgeoning knowledge economy, one that supports collaborative consumption, yet it outlawed Uber. Instead the city is promoting true peer-to-peer ride share schemes and models like RideAustin. RideAustin is centralised like Uber, but rather than being a corporation, it’s a non-profit. In Vancouver, a car and ride sharing cooperative called Modo has been around since 1997. The 17,000-plus members of Modo collectively own the non-profit company and have very low-cost access to electrical vehicles like the Nissan Leaf, which generates tremendous environmental and social value to the local economy, not profits flowing to a global corporate juggernaut.”
Darren Sharp, director of Social Surplus, a strategy consultancy for the sharing economy, says Uber and Airbnb are more about pursuing a particular model of “platform capitalism”, rather than sharing.
“They are really dominating the emerging platform economy and they’ve become synonymous with sharing but … while they might fall under the moniker of sharing they are definitely much more about models using platforms that are generally creating a renting platform for people to unlock idle assets and to monetise those assets,” he said.
A lack of job security
Platforms like Airtasker and Deliveroo create micro-work opportunities for people to assemble other people’s flat-pack furniture or deliver takeaway meals, but there’s no job security.
“On the one hand there’s a greater degree of convenience for consumers because you can get access to a whole bunch of on-demand services and they are really slick and well designed, and you can just tap away on your smart phone and get access to a ride to the airport or someone who can go pick up your laundry, put your furniture together or do a bit of gardening for you,” Sharp says.
“But there is a real question about workers’ rights and inequality and we are seeing that a lot of the risks are actually being pushed onto workers … and a lot of the rewards are actually going back to the platform owners – the founders and the venture capital investors – who are putting a lot of money into developing these technology platforms.”
Since the global financial crisis there’s been a decrease in full-time jobs, stagnant or falling wage growth, and a rise in these precarious jobs.
“People have to take responsibility for their own equipment, their own cars, their own tools, their own health insurance, their own super – whatever it might be – so all the benefits that we have seen over the last century or more in terms of that safety net and those protections for workers have in one fell swoop been reframed around flexibility and micro-entrepreneurship in the last decade or so,” Sharp says.
“There are massive challenges related to that around the negative effects for workers and people trying to make a living through these platforms.”
Co-working and co-living: A wolf in sheep’s clothing?
Another issue is the corporate world creating co-working and co-living spaces in the thirst to appeal to millennials.
Twill says co-working developed as a true peer-to-peer way of making workspaces affordable for creatives, freelancers and associated workers.
“When people in suits and large, portfolio-level co-working companies began showing up at co-working summits eyebrows began to raise. Again, it’s the notion trying to dominate the space and generate enormous profits that goes against the spirit of the sharing economy.
“Collaborative consumption is about generating an ethical, sustainable and resilient local economy through improved utilisation of space and materials. A hyper-local economy, not globalisation.
“It’s like a wolf in sheep’s clothing,” he says. “These companies are making enormous profits under the banner of the sharing economy.
“In comparison, there’s true one-off, unique, funky, cool, adaptive, reusable buildings that attract a bunch of really cool companies.”
In the housing sector, co-working giant WeWork has launched WeLive, a new way of living built upon community and flexibility where members access a unit plus communal facilities for a day, week, month or year.
“It’s a novel idea but it’s essentially corporatised co-housing for millennials, and still fairly expensive as opposed to truly deliberative urban communities such as the Capitol Hill urban co-housing project in Seattle.
“Don’t get me wrong, if you’re a hyper-transient global nomad who travels around the world with membership to different WeLive units, it’s a fantastic solution. But it is still like Airbnb again, with all the profits going to one company.”
Corporates and sharing: a contradiction in terms
RMIT housing academic Dr Andrea Sharam says the very idea of corporates getting into the share economy is a
contradiction in terms as they are obliged to deliver returns to their shareholders.
Sharam is researching disruption in the property space and says “deliberative development” is slowly emerging, in which residents are involved in the design of their housing to expand access and promote responsiveness to consumer needs and preferences.
- See Nightingale Model & the cusp of big changes in housing and The New Commune: Why the property industry needs to radically rethink housing
Melbourne’s well-known Nightingale Model brings together a cohort of 40 to 50 people who have a say in what is built.
“Our housing solutions should not solely be derived from the unilateral vision of ‘expert’ developers and planning agency, but should include local communities and residents as well,” Twill says.
Across the world’s cities, there is clearly an imbalance and over reliance on speculative development models and not nearly enough deliberative models for which there is significant latent demand, he says.
“From the hundreds of examples of deliberative housing models in US and European cities, we can see how co-creation can lead to some very innovative and beautiful housing solutions where people feel strongly connected to place and community.
“On Nightingale projects, instead of being dictated to by the market, we are directly engaging with a cohort of local buyers and developing a unique design response and value proposition that meets their needs financially while delivering a community and urban lifestyle that appealing to them.”
While the Nightingale Model is making progress, Sharam says it’s not a full deliberative development, but rather a “halfway house”, as it is architect-led rather than consumer initiated.
Full deliberative development is happening in Germany.
“Baugruppen was initiated by the people who want to own their housing,” she says. “And now accounts for 10 per cent of housing in Berlin.”
There are equivalents in France, the Netherlands and the UK.
Community land trusts are another emerging area.
“The key benefit of land trusts is to secure land (for free or at discount) that can be held in perpetuity – so that land costs are not included in the cost the ‘buyers’ or renters pay,” Sharam says.
In Victoria, the Mount Alexander Community Land Trust offers affordable housing for people on low incomes who live or work in the Castlemaine area. Moreland has a community land trust project on the go and St Kilda Community Housing has one in development.
Fight back: True peer-to-peer models are evolving
Twill says at the core of the share economy is the notion of empowering local people to live more affordably and have and active role in shaping their local economy and community – “the aim is that you are creating local economic resilience and social connectedness by enabling exchanges of goods and services that generate local community wealth instead of profits being syphoned off into the global economy creating wealth far away.
“It’s about how you can better utilise and transition certain assets within a metropolitan area to be democratically managed to generate jobs, increase affordability and allow for continuous reinvestment and recycling of money within local communities.”
US academic Trebor Scholz, who is in Australia this month, coined the term “platform cooperativism”, to describe how we can apply cooperative principles around democratic ownership and governance to digital platforms in response to the kinds of challenges that workers are facing in this emerging area.
“A whole bunch of nascent platform cooperatives have started and there’s now a growing list of them,” Sharp says.
The Internet of Ownership brings together more than 300 emerging and up-and-running platform cooperatives around the world.
Canadian-based Stocksy United is a stock photography business where the creatives are member owners of the firm.
“When a licence is sold for a photo they have developed, they get 50 per cent of the royalties from the sale of those creative goods,” Sharp says. “They get a much higher rate of return than they would through some of the other traditional corporate platforms.”
Ride sharing service Green Taxi Cooperative has started in Denver, Colorado.
“They now have 800 member-owners of a taxi cooperative, which is providing a similar service to Uber or Lyft but in this instance the drivers themselves are co-owners in that platform,” Sharp says. “They have a say in how that platform is run and also get access to the profits that are distributed through that business.”
Fairmondo is an online marketplace where you source ethical goods and services from sellers with a strong commitment to ethical trade.
Loconomics is a platform cooperative for service-based professionals such as childcare workers, massage therapists and pet groomers to sell their services.
“It’s a co-operative using digital tech to create that market place but doing it in an ethical way returning profits back to those service professionals and to the communities in which they operate instead of some offshore company usually based in Silicon Valley,” Sharp says.
Australia is catching on
We are starting to see the emergence of people dipping their toe into the water of platform cooperatives in Australia, according to Sharp.
“They are keeping that profit-making and decision-marking within local communities for job creation to support economic development to create more resilient communities ultimately too.”
bHive in Bendigo is a new online platform that will allow local enterprises and people to own Bendigo’s sharing economy. It plans to offer car sharing, bike sharing, stuff sharing, peer-to-peer energy, skill sharing, time banking, food sharing and peer-to-peer lending.
Geddup is a community action platform for sharing information, messages and calendars.
AbilityMate is a social enterprise in Sydney that is using 3D printing and open design to create posture and mobility equipment for children with disabilities.
“I believe they are looking at becoming a platform cooperative as well so that they can make sure the profits that are generated through their platform are distributed back to the people who are most in need and are contributing to the value in the creation of those assistive devices,” Sharp says.
It’s taken time, according to Sharp, but local governments and even state governments are starting to work out how they can play more of an active role to support sharing to reach economic, social and environmental goals.
The City of Sydney released a Share Sydney Guide a few years ago. The South Australian government has teamed up with Airbnb to offer $100,000 for the best sharing economy ideas for South Australia. And inner city councils such as Yarra in Melbourne have appointed urban agriculture coordinators to look at how urban gardens can support food security and give people access to nutritious locally grown food.
Sharp, who is also Australian editor of Shareable, says we could learn a lot from cities like Seoul, where the mayor’s office developed a sharing city program and legislation to support it. They have opened up more than 800 public buildings for community use during idle hours. In addition, they have a start-up school to support local sharing innovators.
“There’s a whole bunch of sharing cities emerging around the world and I’ve been working hard locally to take the message of sharing cities to local governments here in Australia and New Zealand, to try to raise the awareness of the potential for local governments not just to play a regulatory role in the sharing space but to actually see themselves as platforms for sharing,” Sharp says.
“So how can they open up their own buildings, their own vacant land, unused public space, underutilised space and support urban agriculture for food growing? How can they support the maker movement through distributed manufacturing and local production? How can they support repair through fixer clinics and repair cafes, which teach people repair skills to keep goods out of landfill and so on?”