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21 March 2016

“The technology is just a shiny shopfront”: the case against the sharing economy

Uber isn't special because it has an app – it is special because it has billions in venture capital funding behind it. 

By Barbara Speed

Tom Slee, a British-born software designer, lives in Waterloo, Ontario, a place better known as the home of Blackberry. As a result, he tells me over the phone shortly after the release of his book, “we’re quite familiar with companies that seem to be the future, but turn out not to be, after all”.

What’s Yours is Mine: Against the Sharing Economy is a painstaking examination of the latest set of companies claiming a chunk of our future. AirBnB, Uber and apps that send you anything from dinner to a cleaner all claim that they’re portals, upon which vendors and customers can “share” (or “buy and sell”, as we’ve called it for thousands of years) their products. At first glance, it’s a utopian vision, which bypasses all the nastiness of Big Business. Yet Slee’s book redraws the landscape in harsher terms, as a group of companies backed by enormously wealthy “old-school venture capitalists” which count themselves out of the rules and regulations that other companies are bound by.

“Intimacy scaled up is no longer intimacy”, Slee points out in the book, yet the companies rely on that word, “sharing” to bypass expensive laws and regulations. They’re bound by a Catch-22, in which they must seem small and intimate for their models to work and appeal, but they must be enormous and world-consuming to make the kind of money their investors require.

Slee was exposed to the concept of the “sharing economy” early on through his work in the tech industry, and from the beginning he was sceptical. But he says the doubt really set in when he completed a data analysis of AirBnB’s New York Listings in 2013. He found what he calls “a somewhat different pattern” to AirBnB’s claim that most of its users are occasionally renting out spare rooms.

“In particular, it showed that probably 40 per cent of their business comes from people with multiple listings,” he tells me now. Meanwhile, the people renting out a room in their house make up, according to the data, “about two to three per cent of their business. Really a tiny fraction”. In its conclusion, Slee acknowledges that the book comes from a “sense of betrayal” that an ideology sold as “an appeal to community, person to person connections, sustainability and sharing” has become the playground of billionaires.

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I ask Slee if the companies themselves are aware of the sleight-of-hand that allows for their enormous growth and resistance to regulation, all the while claliming they’re operating for the social good. “It seems to be a defining characteristic of Silicon Valley that it manages to believe in both at the same time,” he says. “It’s in their interests not to ask too many questions about the conflicts between these two motives.” Of course, some companies are more aware of the trick than others: AirBnB, he argues, is still convinced of its ethical high ground, while “few who work for Uber” probably are. 

It helps that it’s become de rigeur to mock bureaucracy and human resources departments, even as we bemoan zero-hour contracts and acknowledge that labour rights fought for over centuries are slipping away. “I’ve sometimes found myself defending those boring structures and then come away thinking ‘am I really advocating for HR departments?” Slee says. Some demystification of company structures wouldn’t go amiss in most industries, yet the sharing economy’s offering seems to be to remove them altogether. 

The same shift in public opinion that favours start-ups over old models seems to have impacted our trust in governments. Yet as Slee points out, we shouldn’t allow this to happen without a fight: You talk about government – the role of government – now, and there’s very little receptiveness to that. Governments are a manifestation of democracy. To me when democracy fails, the solution is more democracy, not to walk away from it.”

Slee sees the sharing economy as an ourgrowth of “solutionism”: the idea that there are easy solutions to complex social problems. We’re all prey to this mode of thinking, which is perhaps why we place otherwise unimaginable levels of trust in any venture with technology connected to it. We climb into Ubers far more trustingly than into unlicensed minicabs. In the current FBI v Apple debate, we find ourselves placing more trust in a giant company than in a democratically elected government. It remains to be seen whether this trust is misplaced or not – but in an increasingly cynical world, its existence is worth re-examining.

The book undermines not only the sharing economy, but the whole concept of tech-based ventures. We think of apps as primarily technological; we think of Silicon Valley as a concentration of tech talent. But Slee puts it another way: “Increasingly, it seems to me that the defining thing there is the concentration of money and investment.” Uber isn’t special, he argues, because it has an app: “What Uber has is $8bn to spend.” This is what drives competitors, like London’s black cabs, crazy. It’s not as simple as getting an app.

Because of their financial backing and fast growth, tech companies can become enormous and profitable to a point where they can defend less-than-ideal labour policies or approaches that undermine local laws. Their immense popular appeal allows them to paint sparring matches with local governments as David vs Goliath, despite the fact that they’re global companies with more than enough cash to spring for lawyers and spin campaigns.

We need to understand that technology, like weapons, enables the spread of ideology or new kinds of business or politics, but it doesn’t create them. The early ethics of the internet may have been pleasingly liberal – free content for all, equality, an end to prejudice –  but its content is always reflective of the people behind it, not the technology itself.

“The technology is just a shiny shopfront,” Slee says. “But behind that there’s all the logistics operations that goes on, and that’s a huge part of the sharing economy’s success. And in particular, finding ways to cut down costs by basically passing them on to other parts of the system.”

Legislators, meanwhile, are beginning to fight back. Italy’s Sharing Economy Act sets out definitions of the sharing economy for the first time, thereby treating it as differnt from other businesses, but this endeavour is basically aimed at taxing the sharing economy properly. The days of loopholes, it seems, may be numbered. 

As Boston lawyer Shannon Liss-Riordan said of Uber while fighting their worker/contracter laws: “Just because your services are dispatched through a smartphone doesn’t make you a technology company. You’re a car service.”

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