The Problems with 'Sharing'

Until recently, if you used the smartphone apps Lyft or Sidecar to "share" a ride somewhere with one of the network's drivers, you would be asked to send the driver a “voluntary donation” for the gee-whiz favor she just did you by taking you from your apartment to the co-op to get groceries. But if you made the mistake of thinking that the driver was just offering to carpool with you out of the goodness of her heart or the greenness of her footprint while she ran her own errand in North Beach and as such, didn’t need to get paid, you’d not only get a poor rating. You'd be missing the point of the new economy's newest trend.

The “donation” model employed by Lyft and SideCar was one neat way to describe themselves as "ridesharing" companies, and thus avoid the rules that come with being a regular taxi. Strictly speaking, taking a taxi is a kind of sharing, but so then are most businesses that provide the use of their equipment for cash. To the California Public Utilities Commission, the gift-economy "sharing" paradigm looked like a way to circumvent taxi regulations and fare schedules and insurance requirements and to avoid liability in the event of an accident (more on that later). So beginning in late November, both “ridesharing” companies began mandatory pricing, something more like the kind that regular taxis use.

That was an early chapter in the economy's continual reckoning with the term "sharing economy" and the ideas it implies. Consumers and city governments are paying close attention to rapidly growing and much talked-about tech companies and a host of other car, tool, scooter and leftover-takeout-food-sharing apps. There's a lot of money at stake for entrenched businesses, and a lot of potential savings for consumers. The environmental benefits can be huge: by doubling up in cars, for instance, there's a lot of carbon and pollution and congestion—that curse of cities—to be cut.

There's also something genuinely novel and exciting about shifting consumption patterns away from individual ownership towards shared communal use. Sharing is of course a very old idea—resource management forms the basis of our civilization, not to mention our biology, the Internet, and so on. The photo at the top of this blog post is there because I found it in the Creative Commons. The difference between then and now is that the Internet happens to be rather good at making the connections between the people who have excess stuff and the people who have the demand for it.

Sharing, writ large, is what the tech economy seems to be built upon—sharing ideas, sharing photos—but it's the sharing economy that deals in real, tangible, or human resources, thanks to industry mainstays like TaskRabbit, Lyft and SideCar. The latter two offer themselves as "ride-sharing" services and describe contract drivers as "sharing" rides with the customers who pay for them. TaskRabbit refers on its own website to its role in "collaborative consumption" and claims the app is "revolutionizing the way people get things done by connecting neighbors to share their time." All three of these companies are part of the new "sharing economy" advocacy group, Peers.

Buzzwords can sometimes be better at branding things than they are at describing things. Over the last decade, the overuse of "green" and other environmentally-friendly language earned its own counter-term ("greenwashing"), and eventually a backlash; now, you're more likely to hear "sustainable" or "resilient" or other words that could also be destined for the vagueness of a cliche.

Similarly, as an idea that itself has been shared ad nauseum, "sharing" in the sharing economy can be a giant misnomer. It's disruption, but dressed in kinder, gentler terms, the sort that encourages buzzword-laden tech talks and a cult following online. Attach "sharing" to anything, and, like green, it designates that thing as a good thing. Call it sharewashing.

Consider Zipcar, perhaps the granddaddy of the sharing economy. It doesn't rent cars; that's for people in shorts in Florida. No, no—it shares them, and embraces sharing as a cause.

We didn't invent car sharing. We just brought it to a street near you. Mark Norman addresses #sharingeconomy skeptics http://t.co/ugl3SoRTtg

— Zipcar (@Zipcar) January 8, 2014

Sharewashing, when done well, doesn't just evoke a warm generosity. It can conceal ugly things too. Peel back the wrapper and you find that beneath its promised efficiencies and innovations, the sharing economy moniker can sometimes whitewash operations that are tax-shifting, labor-regulation-skirting, and tip-stealing. When a TaskRabbit temp worker, or a TaskRabbit as they're called, completes a contract—which, based on their website’s messaging, you’d be forgiven for mistaking with a community volunteer opportunity—the TaskRabbit has none of the labor protections that are normally afforded to employees at a traditional company. What’s better than being someone’s butler or maid? Being someone’s part-time butler or maid with no benefits, taxed at an independent contractor rate, no guarantee of a minimum wage, and no assurance of a safe work environment. But you do get to wear a cool t-shirt to work.

This is what happens when dreams of frictionless, tech-enabled community mingle with the libertarian-minded free marketeers. A recent article in The American Prospect outlined some of these problems in detail.

[…] Task Rabbit is more than a hip, Web-based temp agency. It’s the reserve army of the unemployed made flesh. What’s diabolically brilliant and emblematic about the company is that prospective errand-runners bid against one another for jobs. To get an assignment, an aspiring Rabbit offers to do the chore for less money than he or she thinks other prospective Rabbits are bidding. That’s what makes it a metaphor for the new economy, a dystopia where regular careers are vanishing, every worker is a freelancer, every labor transaction is a one-night stand, and we collude with one another to cut our wages.

What about the minimum wage or tips? It can be hard to think about the point of a minimum wage when you're a programmer making hundreds per hour, but the little people delivering cupcakes and driving cars have good reason to care about a minimum wage. Why don't we, as someone suggested to Christopher Mims the other day, just call it the "servant economy"?

"sharing economy" needs to be rebranded to reflect its reality… "service economy for rich people"? what?

— Christopher Mims (@mims) January 13, 2014

TaskRabbits have yet to mount a serious effort to demand a minimum wage, but Uber has been battling tip-related protests and lawsuits around the country for months. One of the most recent, in Boston, was a botched attempt to organize an Uber driver strike in response to a major fare cut. Earlier and still pending, is a class-action lawsuit claiming that Uber has been improperly withholding driver tips. The complaint alleges that “drivers do not receive the tips that are customary in the car service industry and that they would otherwise receive were it not for Uber’s communication to customers that they do not need to tip.” Interestingly, drivers are required to waive their rights to a class-action lawsuit against the company when they begin work as an Uber driver—or rather as an Uber independent contractor.

If fair tips are a regulatory concern of drivers, from the consumer perspective it’s worth asking: what are the risks of an unregulated set of drivers? In July of this past year, after long deliberation the California Public Utilities Commission set-up a framework for background checks and liability insurance at Lyft, Sidecar, and (in part) Uber. The rest of the country has yet to follow suit. There’s a lot of money to be made if you can control a huge portion of the taxi market, take a substantial cut, and then leave the drivers to their own devices when serious liability issues arise.

Consider a recent Rube-Goldberg-esque car accident in San Francisco in which an Uber driver collided with another car, which in turn careened into a fire hydrant, which in turn hit and injured a pedestrian. Or the incident on New Year's Eve, when an Uber driver hit and killed a 6-year-old pedestrian and injured her mother and 4-year-old brother. In both instances, Uber pointed out that these drivers were not employees, but people who make contractual use of the Uber technology platform.

In the case of the six-year-old, Uber said last week that it would "immediately deactivate any Uber partner involved in a serious law enforcement matter," and stressed that the accident did not occur during an Uber trip. (San Francisco Supervisor Jane Kim said that the New Year's incident "raises questions regarding the driver training and selection process" for rideshare services, but Uber and other companies say they perform extensive background checks on their drivers.)

The incident goes straight to the enormous question of liability of online marketplaces. If Uber provides a “technology platform” instead of a radio dispatch base station, who’s at fault when the shit hits the fan and the fan kills someone? As far as Uber is concerned, the simple answer to that question is one that doesn’t involve Uber, under the premise that Uber is simply connecting drivers who want to share their vehicles with the Uber community. But what’s best for the pedestrian? What’s best for the driver, or for the drivers of old-fashioned taxi companies? What’s best for passengers?

No doubt, as Uber and others have been right to complain, some existing regulations protect taxi fleet and medallion owners to the detriment of the consumer. Regulations can be a hurdle to innovation by favoring entrenched interests and tending toward the status quo. Unbelievably, New York's taxis didn’t take credit cards, that radical invention of the 1950’s, until 2008.

But breaking these regulations doesn’t automatically mean innovation. The most common concern about services like Uber is that their networks cut out existing industries—the taxi drivers who don't have smartphones, for instance, who can't yet afford to drop their existing dispatching company for an app. The protests have ranged from angry city council meetings to angry attacks on Uber cars, as happened recently in Paris.

Striking cab drivers attack Uber cars in Paris. Dozen incidents of vandals reported. http://t.co/u2FT4ke3k5 pic.twitter.com/62pu0DdMw3

— Jim Roberts (@nycjim) January 13, 2014

Even when they're not collateral damage in a violent labor attack, customers claim they're also being hurt by some of the sharing economy's innovations. As networks help efficiencies rise—as resources are shared among more people—you might expect prices to fall. But many Uber users have cried foul over the company's "surge pricing", which seems to leverage its network to push prices up, not lower them. While Uber eventually responded to the backlash by slashing rates for its more traditional ridesharing service UberX, the company's CEO hasn't been apologetic. He argues that "surge pricing" is simply a matter of ensuring that supply matches demand. (In these cases, quipped one Uber watcher, "Uber quickly goes from 'Everyone’s Private Driver' to 'The super rich’s ride home.")

If you dont like the service, don't use it, is the Silicon Valley refrain (and indeed some have called for a boycott of Uber). But that defense misses the point that the sharing economy, whatever it is, is having an impact on the way many of us live, or it will. Even if we don't use the app, innovation effects us. It doesn't happen in a vacuum. Regulating how technology interacts with the real world is also part of progress.

These issues should sound familiar to those in the media industries, which have been upended by the culture of "sharing," and the rise of giant websites built out of click-baiting middling-quality content, created by legions of low-paid or no-paid writers. That might be good for feeding the hungry beast of the "bored at work" network, for driving our social media discussions, and of course for advertising revenues (though that's not clear). But it can't be good in the long term for the public's trust in the media, for readers, and certainly for writers, whose pittances aren't necessarily incentives to do very good work or pursue the ideals that we used to expect from journalism. "Sharable" content is "free"; that doesn't mean "good."

To be sure, sharing can mean some serious social and environmental benefits. And a slicker, "frictionless" customer experience, without a middle man, can save time and aggravation when ordering a cab or a temp worker or a place to stay. There are serious potential cost savings too.

But if the lower cost is because the formerly unionized employees are now freelancers, or because there's no minimum wage, or because tips are hidden from the customer and the employee, the costs of these apps can be pricier than they look. Brash young Ayn-Rand-quoting Silicon Valley honchos might dispute it, but protecting workers from unfair burdens and ensuring decent pay isn't a bad thing. There are apps for that, like regulations and protests.

We don't need to make a false choice between any company that would call itself part of the sharing economy and a pre-tech world of terrible taxi service and job-post boards at the local coffee shop. There's a real promise to shared resources and the community/environmental benefits that can bring. The hope is that the media, both the PR experts and the journalists, can wipe their eyes clean of the sharing buzz, and that new companies can fulfill their "sharing" promises while meeting the expectations that we've already set for labor and services. That they can pay their workers fairly and treat customers fairly and responsibly, and do other things we tend to think of as being equitable and fair. You know, the things we think about when we think about sharing.

Kelly (@KellyCarlin4) is a writer and an advisor to the ridesharing company Bandwagon.