ANZ LitLovers LitBlog

I thought I didn’t need to read What’s Yours is Mine, Against the Sharing Economy.  I felt instinctively that AirBnB and Uber were a bad idea, and I’ve never used them.  But lots of people do – and it turns out that I have unwittingly been a participant contributing content to a sharing business (i.e. Goodreads).  These disruptive business models are now global, and spawning offspring of all kinds.  Tom Slee tackles the phenomenon and exposes it for what it is.

In the preface, which updates developments since the book was first published in the US, Slee reiterates the attractive promises of the Sharing Economy (which we all know so I won’t repeat them) and then shows how the idealistic communitarian and co-operative vision has been hijacked.

Unfortunately, something different and altogether darker is happening: the Sharing Economy is extending a harsh and deregulated free market into previously protected areas of our lives.  The leading companies are now corporate juggernauts themselves, and are taking a more and more intrusive role in the exchanges they support to make their money and to maintain their brand.  As the Sharing Economy grows, it is reshaping cities without regard to those things that make then liveable.  Rather than bringing a new openness and personal trust to our interactions, it is bringing a new form of surveillance where service workers must live in fear of being snitched on, and while the company CEOs talk benevolently of their community of users, the reality has a harder edge of centralised control.  Sharing Economy marketplaces are generating new and ever-more-entitled forms of consumption.  The language of ‘a little extra money’ turns out to be the same as that used about women’s jobs forty years ago, when they were not seen as ‘real’ jobs that demanded a living wage, and so did not need to be treated the same, or paid as much, as men’s jobs. Instead of freeing individuals to take control over their own lives, many Sharing Economy companies are making big money for their investors and executives, and making good jobs for their software engineers and marketers, by removing the protections and assurances won by decades of struggle, by creating riskier and more precarious forms of low-paid work for those who actually work in the Sharing Economy.  (p.3)

The chapter about AirBnB is instructive, and it confirms stories that I’m starting to see in the media.  Just last week I read about a council trying to control the endless AirBnB partying that is destroying the lifestyle of genuine residents in a popular tourist destination.  There are accusations that there’s a link between housing affordability and AirBnB because investors are buying up property for short term accommodation rather than making it available for residential living.  AirBnB is not bound by anti-discrimination laws and there are cases of long-term renters being evicted so that the landlord can list the property on AirBnB. What’s interesting is that far from disrupting ‘big business’ i.e. hotel chains, the economy that’s suffering is the small B-and-Bs and the small indie hotels who complain that they have to register with their city, have the expense of passing fire inspections and health and safety inspections, and have to pay tourist taxes, so cannot compete with the unregistered apartment down the street that has none of these expenses. And since AirBnB is not the intimate, folksy company it purports to be, it demands eternal growth and therefore it must expand.  As this Harvard Business Review article explains, if everyone around you in your Paris AirBnB is also an AirBnB tourist, they erode the very atmosphere in which they bask and threaten the liveability of the city for residents.  The problem has reached epic proportions in Amsterdam.

Chapter 4 is called ‘On the Move with Uber’.  The amount of money behind this brand is breathtaking and if you already know about problems with uninsured drivers and attacks on women, perhaps then the deal to get rid of drivers by using self-driving cars may surprise you.

Uber enthusiasts attribute the company’s success to its technology, and the efficiency with which it matches drivers and riders, but this misses much of the story.  Uber’s success owes a lot to avoiding the costs of insurance, sales tax [LH: in Australia, GST], mechanical vehicle inspections, and providing a universally-accessible service.   (p.53)

This last one really bothers me. At the community centre where I learn French, they run art classes for disabled people, and all of them arrive by taxi.  The Sharing Economy is not interested in providing affordable transport for these people and it doesn’t care if it puts the taxi companies that do serve them out of business.  In Australia we have a long tradition of subsidising each other to make life more liveable for all of us.  Our stamps cover the cost of delivering a letter to remote communities just the same as delivering it round the corner in the suburbs.  A small part of business costs (which impacts on the price of goods we buy) is to cover the costs of disabled toilets and lifts so that everyone has access.  And we pay a bit more when we ride in a profitable taxi to subsidise the unprofitable people-movers that disabled people use.

But there’s more to it than that.  Taxis in cities are part of an integrated transport system.  Cities regulate for standards: knowledge of routes and destinations, vehicle safety, driver screening, insurance, universal access which means safety seats for babies and vehicle design as well as anti-discrimination provisions, not to mention providing a service to all areas of a city.  There are always going to be problems but all of these standards are enforceable with sanctions because the system ensures accountability.  But they also regulate for the protection of the drivers, and for environmental concerns, (such as pollution controls on cars in the fleet), for traffic management and congestion.  Uber doesn’t comply with any of this…

Plus, taxi companies pay tax which contributes to the well-being of everyone in the community, and individual taxi drivers pay income tax too.  But through a complex system of subsidiaries, Uber avoids contributing anything in the way of tax to the cities where it operates.  You might think that’s ok, if you believe that Uber is just mums and dads making a little cash by using their own cars.  But Uber is a private company which in April 2017 admitted that … Net revenue was $6.5 billion, while adjusted net losses were $2.8 billion… And they’re not even contributing to maintaining and developing the road infrastructure they’re using to make this obscene amount of money!

So who are the winners if the taxi industry fails?

Not, apparently, the drivers.  You’ll have to read the book to see the maths (and the tortuous process of getting any information out of Uber itself) but the evidence is that Uber is not going to end the era of poorly paid cab drivers any time soon.   A US journalist tracked her own expenses and of others who shared them with her and what she found was that she made about $17 per hour gross, after Uber’s 28% cut and the 19% that went to expenses she ended up with just $9.34 an hour.

The really sad part is that former taxi drivers in some places have had to work with Uber because taxi income in their city has fallen and they can’t get any other unskilled work.  Just another 21st century example of people doing the same work for less money and becoming the working poor.

There is so much more to this book, and it’s one that I think should be widely read, but before I end this over-long review there are a couple more things to note: the chapter called Strangers Trusting Strangers, is in part about the ubiquitous business of rating everything we do these days.

The broad-brush talk of trust misses the point that most regulations exist to screen those things that customers cannot see for themselves.  Most tourists cannot assess whether their accommodations are properly protected in case of fire, restaurant customers will not know whether the kitchen handles food properly, taxi passengers will not know whether the brakes of their car are in good condition, and most will never find out.  Ratings will never solve these problems, and for this reason alone algorithmic regulation is a non-starter.

Reputation systems are also the wrong tool to deal with extreme failures of trust.  A one-star rating is no way to deal with assault, fraud or theft, for which reparations and even prosecution are required.  (p. 91)

The example given is shocking: a 19 year old was sexually assaulted by his AirBnB host in Spain.  He texted his mother in the US that he’d been locked in, and when she called AirBnB they told her to get in touch with the police.  Well, so she should have, and so should he in the first place, and if he didn’t know how to do that then he was pitifully unprepared for foreign travel.  But that’s not the point: the point is that AirBnB takes no responsibility for what happens, and a rating system is not going fix this kind of breach of trust.

The chapter about how open-source software often isn’t,  is an eye-opener, especially if you’re interested in creative culture.

The rise of the amateur, of openness, and of free culture has not been at the expense of the blockbuster, but has instead led to a ‘missing middle’.  Those who look to make a living in a modest way from their art (or from their role in the creative process as booksellers, editors, and so on) have found themselves on the outside of all these changes.  As Andrew Franklin of independent publisher Profile said in 2014:

The large bestselling authors are taking a bigger and bigger share of the market.  Just as in every branch of post-industrial capitalism, the rich are getting richer.  New authors and struggling authors and mid-list authors are finding it harder. This [is] bad news for the average writer: they get paid less so that publishing houses can hold onto bestsellers with higher advances.  (p.125)

The irony is that even the most rapacious proponents of the Sharing Economy can read this book for free.  They can (in Australia, anyway) go to the library to borrow it – because libraries are financed by a community of ratepayers who share the cost even if they don’t use the library.  And ironically the creators of the book’s content will be paid (in Australia, anyway) because libraries pay the authors and publishers through the Public Lending Right scheme.

That’s definitely not the kind of sharing that the Sharing Economy represents.  The Sharing Economy is really about someone, somewhere, making a lot money out of it.

Update: another disturbing report about Uber…

Update#2: And one about AirBnB…

Author: Tom Slee
Title: What’s Yours is Mine, Against the Sharing Economy
Publisher: Scribe, 2017
ISBN: 9781925322644
Review copy courtesy of Scribe Publishing

Available from Fishpond: What’s Yours is Mine: Against the Sharing Economy