SharingEconomyAirbnb

Sundarajan discusses his participation at OuiShare Fest in Paris, a conference about the future of capitalism, attended by many sharing-economy enthusiasts. He describes it as “part TED, part Burning Man, and part Woodstock”.

This chapter examines the development of the Internet over the past thirty years or so. Sundarajan reminds us that, in the mid to late 1990s, the Internet divided opinion; there was great excitement but also apprehension and paranoia. While there were enthusiasts, others were concerned about pornography and fraud.

Sundarajan looks back at how experts thought about digital technologies and electronic markets back in the 1980s.  In a 1987 article, MIT professors Tom Malone, Joanne Yates and Robert Benjamin made what was then a bold prediction: that digital technologies would drive a shift away from hierarchies, the corporate-centred economy, and a move towards ‘markets’. In the 1980s, electronic markets were rudimentary and not widely known. Fast forward forty years, and we see Uber, Lyft and Airbnb….

Sunarajan discusses company OB1, who had hopes of “helping make trade free….”. In June 2015, a venture capital firm, Union Square Ventures (USV), an early lead investor in Twitter and Tumblr, announced a $3.4 investment in the new company, OB1. There was little public knowledge about OB1 when USV announced their investment, beyond the company’s very bare website.

This chapter looks at an interesting example of the sharing economy in practice – the story of small island Gigha, located off the Scottish coast. The island collectively bought itself out for £4 million. In decline since the industrial revolution, the island’s residents grouped together to co-own their island through a development trust. Since then, the island has begun to look more prosperous; others have started to move there. In 2003, California baseball player Don Dennis moved to the Gigha.

Sunarajan talks about the founding and success of Airbnb. When the accommodation platform was first being developed, its founders gave little thought to hotel regulations. The platform grew rapidly, their host numbers more than doubling in 2013. At this point, New York state attorney general Eric T. Schneiderman begins to scrutinise platforms like Airbnb.

Sharing platforms are not without their controversies. In 2014 US labour lawyer Shannon Liss-Riordan defended Uber drivers, who she argued were incorrectly being classified as contractors rather than employees. 

The Uber workers argued that the platform wanted the cost advantages of working with contractors, as well as the control of having employees. Liss-Riordan said that Uber drivers’ performance is “managed” based on user ratings, and that they receive guidelines from city managers….characteristics suggestive of  an employer-employee relationship.

We are undoubtedly seeing a major shift in the way our economy is structured, possibly as significant as the Industrial Revolution. Sundarajan is interested in what the consequences of this shift will be – will this change to a less hierarchical economy create a better working environment? Can we do anything to make this change a positive one?

The author ponders whether the sharing economy will ultimately lead to a culture of self-employed workers, who work when, where and how they want to. It seems that this already exists, although not to the extent that Sunjaran is imaging.