Will Surging ‘Sharing Economy’ Drive Bottom-up Disruptions?

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Trump seems utterly ignorant about global competition – and about what’s really holding back American workers.

The explosion in ever-widening collaborative transactions hardly lacks for catchy names. Are these radical, co-operative platforms captured as the “Sharing Economy,” “Collaborative Consumption,” even collaborative capitalism? Or, recalling perennial venture-capital roots, perhaps “Network Orchestration”? Whatever the imprint, dramatic breakthroughs in peer-to-peer exchanges are booming, posing large-scale challenges to topdown, over-determined corporatism. Not so much to private property, as every shareable “asset” has an owner, with rare exceptions when users co-own (now that’s bottom-up).  Overall, we’re talking new livelihoods and looming horizons, especially with compelling pathways towards sharing general productivity across a far more equitable commons.

Barely out of the starting gate, hand-shake powerhouses like Uber and Airbnb already deliver high profits without owning any of the transacted products. That critical breakthrough, not owning the capital assets exchanged, fosters new business paradigms that could answer leftwing calls for grassroots, bottom-up reversals. But only if such ventures work for rich and poor alike — if they aren’t co-opted, or taxed, handcuffed or outlawed. And if they’re not bought up — or brought down — by autocratic bankers and international bullies. So, online editor Arthur de Graves wonders if widespread sharing is “Capitalism’s Last Stand,” representing the opening stage of profound, epoch-changing transformations.

Strong points not at issue: highly-competitive, instantly-comparable, thus affordable prices, settlement is a snap, and exchanges (with assurances for both sides) occur only at everyone’s convenience.  Strapped owners don’t make new capital outlays, rarely pay franchise or join-up fees, nor need more staff or inventory — not even formal government applications or permission (no small problem).  Good collaborations prosper ONLY by the ease of operation, sharing income (fees and rentals), and confident repeatability after successful experiences.

Goodbye, Command & Control?

Here’s a still remarkably unregulated, supra-legal partnership that relies on mutual gain between independent, voluntary buyers and sellers — and termination by either side requires only an email, capable of refund. Marx might scratch his head at marginal exploitation of labor (though Uber has slashed reimbursed mileage payments and hyped estimated earnings) plus the transparent profit margins of site operators (Airbnb charges 3% to list, then 6-10% after booking payments).

Harvard Business Review (HBR) delineates “Network Orchestrators” as creating a global, limitless “network of peers in which the participants interact and share in the value creation. They may sell products or services, build relationships, share advice, give reviews, collaborate, co-create and more. Examples include eBay, Red Hat, and Visa, Uber, Tripadvisor, and Alibaba.”  A year ago, Airbnb rushed to my aid when the owner of a would-be rental didn’t communicate well, and its (no cost to me) support facilitated two positive overseas experiences.

An offspring of hard times and high unemployment, this booming marketplace allows us less-rich (to those who gag at complacent, deluxe hotel guests) to afford expensive hotel cities. The huge growth of sharing and/or recycling belongings will keep competition high and presumably prices low — hey, like the classic free market once promised. Even the more corporate ZIP car options provide less costly, more convenient short-term rentals vs. the bother of full-day, national car rentals.

Evolution or Revolution?

So, do Uber and Airbnb, burgeoning thanks to highly-prized algorithms, represent less predatory, fairer and more open grassroots-driven business exchanges? That, despite huge evaluations by hard-nosed Wall Street analysts for these giants. HBR again: “Airbnb.com raised funding at a valuation of $10 billion, [making] it worth nearly 20 times its revenues . . . more than Hyatt Hotels or Wyndham Worldwide.”  The still privately- held Uber boasts valuation passing $40 billon.

Plus, consider far less consumption-driven, overseas “orchestrators,” serving the most bottom-up folks imaginable: Kiva turns tax-deductible donations into micro loans (recycled when repaid) for truly backwater “entrepreneurs” otherwise facing zero prospects. Crowdfunders, like Kickstarter, boost ideas by empowered dreamers, whether funding art projects, funky products, events, experimental and/or environmental films, doing research and writing books, even professionally-managed real estate partnerships for small fry investors who collectively share dividends and profits.

Is Capitalism Kaput – or Mutating?

Scores on the left write off “capitalism” as if a single, dying monolith, convinced today’s most predatory mutants (bloated banks, currency and hedge traders, or Big Energy) cannot survive, poised to crash all our core foundations. Doom and gloomers monotonously envision disaster for the dollar, capital flows, and stock markets, a financial armageddon that crushes western civilization with the next Dark Age. True, ruthless fat cats who fob off costly “externalities” while despoiling the earth jeopardize life as we know it (with reckless oil drilling, mining, burning tropical forests and dirty coal, fracking, and grossly under-regulated mass polluters).

Few of us anticipate the most robust of sharing exchanges will offset companies getting away with planetary murder. But this new trend notably informs a new global mindset (share, recycle, reuse, join forces), qualifying as a breakthrough for an era of bad capitalism. We don’t know the downsides yet, nor the extent of sharing ventures, but the formation of sustainable bottom-up, grassroots platforms (who outlive the novelty) is already paying off brilliantly for millions involved.

At the least, the sharing boom punches a big hole in the “capitalism is a single entity” mime. Maybe this trend is just a pretty face, but I can imagine tectonic shifts serving up bottom-up models. No one knows, but collaborative consumption of “too small not to succeed” may eventually offset the worst examples of  “too big to fail” — across a myriad of industries, not just WS mega-banks.

Innovative exchanges (and barters) are nothing new: two decades ago I traded my then Berkeley residence with an English family for mutual vacations (no cash changed hands, thus no income, and family cars were included). It worked out perfectly as we relished a restored carriage house in tony Tunbridge Wells (an hour from London) while our trusted partners savored the Bay Area with a perfect location to explore.

A Bold Mass Market of One?

What’s breathtaking is the infinite range of products and services. You can contract legal services, wedding officiants, massage, home yoga classes, unlimited consultants, with more to come.  Some predict overpriced legal fees at fancy downtown offices will shrink, perhaps to $100/hour. Certainly, the internet cornucopia surpasses any single outlet, the prices often better, and delivery efficient. If this helps reform bad capitalism, we at least postpone when the system “consumes itself,” per leftwing predictions. Indeed, as the nature of money itself changes, so will business innovations: that presages greater grassroots opportunity and ripples yet unfelt.

Since the ’60’s, modern capitalism for me is like water, capable of squeezing into every profit nook and cranny, forever reinventing itself, for better and worse. The sharing economy is just the latest variant, though hardly invulnerable to the biggest, baddest, threatened corporations warring against it — just as vehemently as the Koch Bros. crowd defends besieged its multiple power bases. If bottom-up is truly a showdown between empowered, co-operative innovation vs. entrenched, autocratic exploitation, we shall see which adaptive systems survive and which top-heavy ones are “too big NOT to fail.” Check out Janelle Orsi’s provocative take on immense potentials still in the offing. Remember, Uber already dominates street action, and modern revolutionaries still need transport to the protests.  Just like in the old days.

Notes:

Meshing.it is a website that catalogs more than 9,300 sharing companies in 131 countries, “a Mesh company uses modern technology and social networks to provide people with goods and services without the burden or expense of owning them outright.”

Sharing economy attorney Janelle Orsi has an outstanding video/cartoon that critically delineates transformational options, positive and negative, detailing basics of shared earnings, control, capitalization, and how these platforms promise a new, more equitable commons.

Shareable.net details sharing initiatives that serve transformational sharing, like the rise of cabby-owned taxi cooperatives and the rise of multi-stakeholder cooperatives wherein major decisions are collectively made.

Uber and Airbnb are not just companies but transformational platforms:

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Robert S. Becker
For over a decade, Robert S. Becker's independent, rebel-rousing essays on politics and culture analyze overall trends, history, implications, messaging and frameworks. He has been published widely, aside from Nation of Change and RSN, with extensive credits from OpEdNews (as senior editor), Alternet, Salon, Truthdig, Smirking Chimp, Dandelion Salad, Beyond Chron, and the SF Chronicle. Educated at Rutgers College, N.J. (B.A. English) and U.C. Berkeley (Ph.D. English), Becker left university teaching (Northwestern, then U. Chicago) for business, founding SOTA Industries, a top American high end audio company he ran from '80 to '92. From '92-02, he was an anti-gravel mining activist while doing marketing, business and writing consulting. Since then, he seeks out insight, even wit in the shadows, without ideology or righteousness across the current mayhem of American politics.

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