Volume 50, Issue 3: Summer 2016

The sharing economy blues

Tom Slee on Silicon Valley’s anti-regulation revolution

On January 13, 2015, around 70 of Portland’s 460 Taxi cabs protested fair taxi laws by parking in Pioneer square. Organizers want city leaders to make ride-sharing companies play by the same rules as cabs and Town cars. Photo by Aaron Parecki.

It seems like politicians, journalists and pundits are lining up to praise the “innovative” promise of the so-called “sharing economy.” But is there something sinister lurking behind the collaborative facade that so often accompanies rosy assessments of the peer-to-peer online sector? To consider this question, we connected with Tom Slee, author of the new book What’s Yours is Mine: Against the Sharing Economy.

David Hugill: Let me begin with a basic question. What is the Sharing Economy?

Tom Slee: It’s a new wave of Internet platforms that are designed to facilitate exchanges between individuals. Early on, it involved things things like tool-sharing programs. Why does everybody need to have a hand drill? You never really use it. It just sits there on the shelf. Why not share it with others? The Sharing Economy came about as a means of using Internet platforms to solve problems like this one, initially with a lot of egalitarian talk, a lot of community focused talk. The idea was that the Internet could facilitate person-to-person exchanges without having to go through the big corporations. Today, it is primarily a way of using Internet platforms to facilitate transactions in the service economy, for example by connecting people with car rides, through Uber or Lyft, with places to stay, through AirBnB, with personal loans, through Lending Club, with places to work, through WeWork, and all those kinds of things. As the money in the Sharing Economy has grown, so has the driving ideology behind it, and now it’s become basically a deregulation movement, with companies like Uber and Airbnb building business models that demand deregulation of their industries in cities around the world.

DH: So you are dubious about the claim that these enterprises are mostly about progressive forms of community building. In fact, you’ve written quite critically about the way in which proponents of the Sharing Economy have adopted — even co-opted — the communitarian language of social movements to describe their work. Can you elaborate?

TS: I think co-opt is the right word. In fact, the only hesitancy I have about using that word is that I think some proponents of the Sharing Economy literally believe the things they are saying. In many ways, this is a product of what has been called the California Ideology, which is a strange combination of beliefs that have traditionally been both left and right wing, a kind of anti-authoritarianism that has become a full fledged techno-libertarianism. There is this belief that there is no contradiction between having sustainable, small scale exchanges and globe-straddling corporations that will administer them. If there is one thing that motivated me to do this work, it is seeing progressive language used to promote something completely antithetical. Sharing Economy boosters use the language of non-commercial exchange, but what’s mostly happening is that they are promoting the extension of a harsh free-market economics into places that it previously couldn’t reach. So co-opt is absolutely the right word.

DH: In your book, you hint at the way that Sharing Economy corporations — especially Uber and AirBnB — use the language of “livable” cities to describe the implications of the services they provide. Rhetorically at least, their ideas harken back to Jane Jacobs and other liberal urbanists that valued lively, populated, salubrious and co-operative urban spaces. I get the sense that you share my incredulity about their claims. Is that right?

TS: I think AirBnB has been the been the biggest in terms of this. They’ve talked about the “shareable city,” or, the “open city,” where you can find a home wherever you go and so on. They celebrate the small scale, individuals having people stay in their houses and maybe fixing bikes on the side or something. In this way, they promote a kind of Jacobsian vision of the city, if you like. I just don’t know if the AirBnB folks believe their own messages anymore. If they do, they must be isolated. In the last few weeks, I have been working with a journalist who writes for Fusion and is doing some research on AirBnB’s impact in Reykjavik. Here you have a city of a 120,000 people and a total of 22 apartments available for long term rent. Essentially none, in other words. At the same time, two-and-a-half thousand apartments have been turned over to AirBnB listings. So AirBnB might say “come and live like a local,” but actual locals can’t even live like locals anymore.

AirBnB is very effective at promoting their narrative. They regularly put out these studies on the benefits that their service provides to the cities where they operate. They say “we bring a lot of money to this city.” They compare the full number of AirBnB bookings to what it would be like if all those people had decided to stay at home and they say “look, here’s all the money we’ve brought in.” Then they take the power consumption of people staying in hotels and compare it to people staying in AirBnbs and say “see, we saved you all this energy.” But you could also do it the other way around. You could say, look, “we took all this money away because people weren’t staying in hotels.” Or “we added environmental problems” if you compare their impact to what it would have been if people had stayed at home. That’s why I say that if, they still believe their own rhetoric at this point, I have no idea how they square the circle.

DH: I don’t know if you’ve had the misfortune of reading Zipcar founder Robin Chase’s book, Peers Inc., which is a Sharing Economy manifesto of sorts. In any case, it really pushes this idea that Sharing Economy enterprises are topplers of entrenched power, that they are the builders of horizontal networks that supersede and overwhelm centralized forms of power. There may be an element of truth in this, but what interests me is how hard it is to square this claim to decentralization with the new forms of stratification that these businesses have created. I mean how can a “movement” that has created so many new billionaires be about anti-hierarchical decentralization? Isn’t there a perverse irony at the core of these claims?

TS: It is remarkable, isn’t it? You have the image of the network as very decentralized, but the end result has been that the internet in many of its manifestations is a winner-take-all environment. The Sharing Economy has become an environment where the biggest players are as big as ever and to some extent you have a long tail of people making a few bucks. What we have is what some political scientists have called the “missing middle.” I don’t think AirBnB is a threat to Marriott or other big hotel chains. It is a threat to bed-and-breakfasts and small independent hotels. What we’ve seen is that these new platforms don’t end up challenging the biggest companies but independent operators who get stuck in the middle and have a hard time making it.

DH: So is this claim that Internet platforms are providing new opportunities for people to connect in a decentralized way simply a ruse, or are there Internet innovations that are capable of providing genuinely progressive opportunities to move beyond concentrated forms of corporate power?

TS: You can go back to the ’90s and you’ll find that a lot of the early Internet culture movements — Indymedia, things like that — were very big on the potential of disintermediated communication forms to remove hierarchies, get rid of gatekeepers in publishing and so on. But my feeling is that they got completely outflanked by the big platforms. You don’t have to worry about publishers stopping you from getting your message out, but you do have to deal with Amazon. There are still groups of people who still very firmly believe that the Internet has some inherent counter-cultural value to it, but I see that as a moment in time that has come and gone.

DH: It does seem like the counter-cultural possibilities of the Internet are less abundant than they were even a few years ago. Are there particular technological shifts that have accelerated the corporatization of the online world?

TS: I think there are a couple of things. One is the rise of cloud computing and the platforms built upon it. We don’t have networked architectures any longer. Instead, everything is going through the same set of servers. Yes, you might have a network of friends on Facebook, but all that information is on Facebook’s servers. So we’ve seen that kind of evolution of different platforms. I also think that the rise of mobile technology — including apps — has created a much more segregated experience. It takes away what Jonathan Zittrain calls the “generative” nature of the technology. The phone is essentially, if not purely, a consumption device. It’s not a device you can do stuff with; it’s not a general purpose computer in the same way.

In addition to those two changes, I think that, by 2006 or 2007, a lot of people who could no longer get jobs on Wall Street were coming across to Silicon Valley instead. I think that changed the culture as well. There was a time when banks could offer the smartest computer science and math students a big bag of money to come and work on ever more complex financial instruments, but as the 2008 crash approached and then happened, that opportunity went away. Now it’s the Silicon Valley giants and the startups called “unicorns” (companies with over $1B in venture capital) that can offer the biggest bags of money. And money, as they say, changes everything.

DH: One of the things that’s really interesting in your book is the way you challenge the idea the Sharing Economy is mostly about giving people a little extra money on the side. a describes itself as a platform that allows people to make a supplementary income, maybe to pay for the cost of playing golf or some other activity. AirBnB describes itself as a platform that allows people to offset the cost of urban living by renting out part of their space. But your research suggests we should be wary about taking these clams at face value.

TS: For AirBnB, this kind of arrangement might represent half their business, but the other half is business people running multiple properties, doing it on a professional basis. I know somebody that went to one of these AirBnB events in Paris where they get all the hosts together. These events are all about training hosts to make more money. How do you do that? How do you professionalize? Maybe you get a cleaning service. Maybe you get a key handling service. They are going down that route of professionalization very quickly. Uber is an interesting case because they kind of came at it sideways. Two years ago, Uber was not talking about people working for four hours a week. They were saying you can make $90,000 driving for Uber. People were talking about the end of the poorly paid taxi driver. But that vision turned out to be a mirage. Now they are saying, “we don’t have to worry about things like decent pay because it is just a bit of extra money.” I think they’ve found that that is more effective public message. You know, don’t worry, it’s not a real job.

DH: There is a way in which champions of the Sharing Economy — whether they are actual Silicon Valley leaders or simply the provincial lieutenants tapped to do their bidding — describe the transformations that they promote as inevitable. They tell policy makers and others that the types of exchanges associated with their platforms are here for good and that policy makers better adapt to the new reality or risk being reduced to backwater status. Do you see this sense of personal destiny as part of the California Ideology that you described earlier?

TS: Uber’s CEO Travis Kalanick was very involved in the design of their new logo, which represents the coming together of bits and atoms. The merging of physical and digital worlds. Could you paint yourself in bigger, more spectacular colours? No. For them, it’s very useful to conflate the march of technology with the march of their businesses. But while technology does advance, individual businesses can come and go very quickly. A few years ago Groupon was the future of shopping. And then, boom! What’s Groupon? I think governments run the risk of closing down future innovations by being too friendly to the first big kid on the block.

DH: So we have these platforms that describe themselves as revolutionary, transformative, etc., and there is certainly a lot of truth to that. But insofar as they are pursuing a relatively straightforward deregulatory agenda, are they not, in many ways, simply recapitulating a well-established form of right wing politics?

TS: Sure, I think they are. I think it comes from a peculiarly American worldview as well. I don’t think you would have seen the same kind of development if things had started elsewhere. There is a Sharing Economy conference in Paris called OUIshare which happens every year and it has been through a few crises of conscience over this because it wasn’t the original vision that they started with. To generalize, I think we can say that Americans are more likely to see the government as a thing to be got out of the way. They simply don’t see it as having a useful role. Whereas, I think most of the Left elsewhere has a much more complex relationship with government. I mean, of course there is the Snowden revelations, there is a lot of surveillance stuff, and there are a lot of coercive problems with the state. But at the same time the state can be a bulwark against the ravages of free market capitalism, so we have a more tortured relationship with it, I think. Most defenders of the Sharing Economy don’t seem to be at all troubled by internal conflict on these questions.