It’s way past time that I looked at the newest major way for
people to make money.
The first time I read about it was a year and a half ago in
a Thomas Friedman New York Times
column. Titled “Welcome to the Sharing
Economy,” it described Airbnb, an accommodations-reserving company then less
than five years old but gigantic, with places to rent available in 34,000
cities and 192 countries. The piece was
informative, but displayed two of Friedman’s most irritating tendencies. First, it seemed giddy about the possibility
of people selling access to their resources, combined with the let-them-eat
cake mentality he has shown on other topics (“The skills required for any good
job keep rising – a lot of people who might not be able to acquire those skills
can still earn a good living now by building their own branded reputations,
whether it is to rent their kids’ rooms, their cars or their power tools.”). Second, he once again tied a barely related subject
into green politics (“Just think how much better all this is for the
environment – for people to be renting their spare bedrooms rather than
building another Holiday Inn and another and another”).
Yet the final two sentences of Friedman’s column were
prescient: “The sharing economy – watch
this space. This is powerful.” Although Airbnb was, in fact, a huge company
when he wrote the piece, it has continued to prosper. It is joined by amateur taxi providers Uber
and Lyft, the former of which does business in over 50 countries, and any
number of other similar businesses with the same or other specialties. A lot has been written more recently on the
sharing economy, with views of it ranging from glowing to execrable, so it is
clear to many that, somehow, it must be dealt with.
So how can we assess this movement? This week, the positives.
First, the sharing economy is indeed a legitimate means for
people needing money to get it. The
sharers not only pass along their resources for a price, but also invest their
time, energy, and knowledge in the process.
All of these things are often surplus for them, especially among those without
regular jobs.
Second, it is a proper descendant of eBay. People have been selling their unneeded items
there for almost 20 years now, with the company, as with Uber, Lyft, and
Airbnb, not owning anything that changes hands but only taking money from those
executing the transactions. EBay has
been a boon for vast numbers of people, for collectors, suppliers, and bargain
shoppers as well as its investors, and it would be silly to say that its
overall effect has not been positive.
Third, other sharing sites, such as TaskRabbit, help people
get paid for their surplus time. They
have no minimum wage as such, but allowing the otherwise unemployed to earn
something, somehow, is in itself a good thing.
Fourth, the sharing economy fits well with the times we are
in. Although there is a permanent jobs
crisis, neither political side has been doing much of anything to end or even
alleviate it, so, improving employment levels notwithstanding, many people are
stuck not working. It allows them ways
of earning money, in some cases, even without being physically present. It also helps those who have lost good-paying
work without finding it at similar compensation but have fixed expenses,
especially for cars and housing, by providing the means to defray them without
giving up their houses and vehicles altogether.
Fifth, it is strongly market-based. With so many companies and providers, the
amounts charged for tasks, rides, and night’s stays will settle at amounts
determined by supply and demand. There
will be little concern about wide-scale overcharging, as the systems will allow
others to easily undercut prices that are truly, as opposed to seemingly, too
high. Sharing applications also have the
potential to slash market prices for products which are, in fact, grossly
overpriced due to not enough people selling them.
Sixth, those offering resources through Uber and Lyft, and
to some extent Airbnb, can be seen as franchisees, a well-established category
of business with its own sets of strengths and restrictions. More franchises, held by willing
entrepreneurs, generally mean more solid, taxpaying business activity.
Seventh, it provides opportunity, even if often meager, for
people to sell skills nationwide.
These seven points, of course, are only half the story. For the problems and disadvantages of the
sharing economy, along with how we should best handle it, come back in two weeks.