There’s been lots of talk over the years about the ‘sharing economy’ (also known as collaborative consumption, peer-to-peer etc). It’s a meta term for the model disruptive businesses like Uber, Etsy, GoGet, Coursera, Zipcar, Taskrabbit, Kickstarter and the like abide by (at least in loose terms).
The ‘sharing economy’ is a model of consumption based on the sharing of resources and human capital. It’s a move from a model based on ownership to one based on access to assets. According to Quartz, the sharing economy is expected to generate revenues of more than $335 billion by 2015 (aka this year)…and this will only continue (well until some new disruptive model pops up) as these types of businesses ‘infect’ more industries.
Jeremy Rifkin, economist and author of the book‘ The Zero Marginal Cost Society‘, believes that ‘automation and sharing will replace traditional means of production, rendering that marginal costs of products ad services close to zero’ (hello 3D printing etc). In fact he goes further, to say that these business models fundamentally disrupt industries because they shift production from the current model of ‘low capital start-up with high ongoing labour costs’ to ‘high capital start-up with low ongoing labour costs’…similar to the model that nuclear and solar energy use. Ok, it’s an extreme point-of-view – but we’re making a point.
So why is the ‘sharing economy’ a ‘thing’?…or better, what conditions created it. Well, there’s on key condition and it’s not technology. Yes, technology is the enabler but not a condition – let me explain…
Most people think that the sharing economy has arisen because we now carry around smartphones, connected to the internet and there’s this generation of young ‘entrepreneurs’ using this technology to connect these people ‘willing to pay for convenience with small businesses or people seeking flexible work’. For example, you can’t be bothered to pick-up a package at store, so you use your phone to organise an Uber Rush driver to do it for you.
This sounds right, but it misses the fundamental nature of the markets that start-ups like Uber, Airbnb….or Silicon valley for that matter come out of – one of wealth inequality. In fact, San Francisco (which for all intents and purposes the birthplace of these new businesses) has experienced the largest increase in wealth inequality between 2007-2012 in the US.
As such it has created for itself the perfect conditions for the ‘sharing economy’ – a labour class big enough and willing to work for wages that ‘the people with the smartphones’ consider affordable and that generate a good profit margin for the ‘middle man’ (ie. the start-up).
To quote Christopher O. Hernæs ‘ the sharing economy is a true form of social capitalism…a catalyst for wealth disparity where Uber and Airbnb create a form of digital feudalism’.