Monday, November 3, 2014

The sharing economy? A many thousand year old model rebranded.

Disclaimer: We know there is a constant desire to stand out from the crowd, and marketing and PR folks feel a relentless need to contribute. But calling this thing "sharing economy"? Please pick a different Facebook button label for the next biz fashion.

Mainstream reporting about the wonderful sharing economy, or Sharing Economy for extra emphasis, has been nothing short of hilarious over here in Europe.

It has been mostly:
  • 1. Ignoring that the "sharing economy" is many, many thousand years old.
  • 2. Talking up the role of the internet in the "sharing economy".

The blogster takes umbrage with the self-professed sharing economy because it tries to highjack the cuddly term "sharing".

What is the difference between my stock broker and taxistas Uber and bedding specialists Airbnb?

The main interface to either is a web site.
They provide a service.
The fees charged by my stock broker are lower than those of Uber and Airbnb.

Shouldn't my stock broker call himself a proud proponent of the sharing economy?

Businesses like Uber/Airbnb allow users to earn money as providers of a service, to make money from an otherwise unused asset, you say?

Since at least 2008 or so, money in the bank has been an unused asset, and why should I become a slave to a system that gives me a few seconds to accept a job or open my house to someone who may well walk out with grandma's painting.

Let's be clear, we value a broker who makes sure we get paid for a service or product. The extended geographical reach of your offering is highly welcome, too.

That's why we have eBay and Etsy, right?

Calling your company a "sharing economy" company seems to work if the users belong to the growing number of humans who think that fish are square because that's how they come in the supermarket freezer section.

Let's have a look at exchanges involving sharing. When the neighbor hands you a bag of seeds for the garden, or when you lend the neighbor your chainsaw for a day, you share. The hand-me-downs some of you may still remember, that's sharing.

When the neighbor gives you something in return for the use of the chainsaw, or when you repay heirloom tomato seeds with a gorgeous pumpkin in Fall or with a 15 minute massage, you share. In cases like this, the term "bartering" applies.

When you sign up with (no endorsement if the site exists, just a theoretical example) and the neighbor buys a bag of seeds, that's not different from eBay or Etsy. It is a buying/selling transaction, you share your address and maybe feedback, but that's pretty much it.

We should not make fun of the great sharing economy without addressing the argument of using fewer precious resources, the eco angle. It makes sense, and we are all in favor of less waste, but less waste is so inherent to straight-up giving away of stuff and to bartering that the "sharing economy" pales in comparison.

How serious are different sharing economy players about reducing the impact of humans on the environment? There is no simple answer, but as to Uber, one may wonder how the corporate limo service side fits into the benevolent eco image.

The Uber-airheads follow in the tradition of the old classified adds, expanded to the electronic attic and basement by eBay, and the taxman is ready to accept taxes on your rented out spare bedroom (which is somewhere between the attic and the basement).

At least, Uber drivers or newly minted Bed without Breakfast operators are spared the indignity of being called mechanical drivers (based on Amazon's mechanical turks) or crowd beds.

What if the "sharing economy" really revolutionized society?

The size and complexity of major economic sectors are formidable obstacles to a sharing economy ultimately based on growth, and the sectors who really want your money - the government and the immaterial products folks - already have instruments in place that ensure their share of your sharing.

Making you pay for a product or service you never use is likely to get more traction in the future. The Germans, for one, are very good at that. That fee on your home printer going to intellectual property owners because you can copy pages of a book you don't own, or the license fee for TV payable by someone who never watches TV seem to us the "new sharing economy". Why bother with all the work and nuisances involved in a transaction when you can simply grab a share upfront?

So, go share, but don't complain if your government one day sends you a bill simply because you are a computer programmer. The justification for the invoice? You have the skills to fix your home computer without calling a professional (duly bonded and taxed), hence you withhold economic value from society at large.

And why should that be limited to fixing computers?

You have other taxable skills, and the vegetable patch in your garden produces, arrgh, free food.

Think that is crazy?

Do you live in a country where they only pay out unemployment benefits if you can prove you submitted x number of applications per month or week?
That's based on the assumption that you not doing so constitutes withholding economic value from society.

You could argue that you are not receiving unemployment benefits from your insurance premium - you are paid for the number of correctly prepared job applications.

Don't believe it?

Try a one line email approach to job hunting and see what your EDD/jobcentre/Jobcenter has to say.

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