Happy New Year, people. I’ve got a backlog of partially-written pieces from 2015 that I plan to foist upon you in the coming months, on a somewhat more realistic schedule than the long-abandoned ‘100 posts in 100 days’. They’re likely to be mostly long reads, so settle in and make yourself comfortable.
I’m generally not a big fan of jargon or industry catch-phrases. I generally think that if you can’t describe a thing in normal language, you probably don’t understand it well enough to be talking about it. Some offenders are worse than others. If you’ve had occasion to be in my presence when the words ‘The Sharing Economy’ are spoken, you’ll have observed my Tourette’s-grade reaction. The ‘sharing economy’ is bullshit. Or rather, it’s bullshit when it’s used to describe businesses like AirBnB, TaskRabbit, RelayRides, etc. (and especially when it’s used to describe Uber, but I’ll get to that in the next post). It’s bullshit because it’s a misnomer that unproductively distracts from what’s actually going on.
Most of the businesses lumped together underneath the ‘sharing economy’ moniker have nothing to do with sharing. Sharing is free, sharing is noncommercial. Sharing might stretch to collective ownership or swapping used goods, but it definitely doesn’t mean profit. When we tell our kids to share their toys, we’re not telling them to charge Jimmy by the hour to play with their Lego. Whereas AirBnB, RelayRides, TaskRabbit et al are very commercial indeed. Labelling them with the word ‘sharing’ misses the critical point that these businesses are proving: humans like to do business with other humans.
There is a lovely warm fuzzy feeling when you walk into your neighbourhood butcher/grocer/fishmonger/train station/off licence/cafe/bar and are greeted by the staff like an old friend. Most people I know vastly prefer this to an impersonal chain store experience, and will choose accordingly whenever they can. Similarly, urban street markets are more popular than they’ve been in decades, because most of the products on offer are (at least presented as) locally sourced and/or made by the people selling them. We like the idea of looking the source in the eye. It makes us comfortable.
This is not particularly surprising when you consider that throughout most of human history, right up until the Industrial Revolution, that’s exactly how we did business: face to face, human to human. The other benefit of that system was that markets were de facto balanced – what was on offer was what was produced was what was needed was what sold. The down side was that we only had access to a limited set of things – local produce and whatever that travelling snake oil salesman brought through.
Cue the Industrial Revolution and mass manufacturing. This was brilliant because economies of scale made products affordable that had previously been out of reach, and mechanised distribution made those products geographically as well as economically accessible. The down side? No more face-to-face transactions. Now we were doing business with a faceless entity, albeit sometimes one with a human behind the counter.
Fast forward to 2010(ish). Technology is more accessible than ever, 77.4% of Americans and 58.4% of Europeans are online. iOS and Android smartphones have given people unprecedented control over their personal digital landscapes. Pretty much anything you can buy on the high street, you can also buy online and have brought to your door, and more and more people are doing so.
These same technologies also give every individual with a product or service to sell unlimited reach, at least in theory. But there is still a difference between buying something from the market stall down the road on a Saturday and buying from an online vendor: how do you know you’ll get what you paid for when you can’t look the vendor in the eye?
Cue the sharing access economy (as the Harvard Business Review suggests it be called). People had been doing the things that they now do through TaskRabbit, AirBnB and DogVacay for years, on a smaller scale, within their own networks. What these platforms really do is twofold:
1. Give people with something to offer (products, goods, crafts, space, skills, equipment, cars, etc.) a straightforward, user-friendly experience for offering those things to anyone who might be interested, online.
2. Give both buyers and sellers security and reassurance that they won’t get screwed over by some stranger halfway round the world (or across town).
It’s not surprising, when you look at it this way, that (for example) AirBnB has been such a success. Around 2011, a colleague of mine in Berlin went on an extended trip in the USA and stayed almost exclusively in AirBnB rentals. She came back raving about the experience – how much more she got out of the trip because of the local knowledge of her hosts, how much nicer it was to stay in a home than in a hotel, and so on.
From the hosts’ perspective too, AirBnB is positively dreamy. Those of us who travel frequently can let our homes when we’re away, instead of leaving them empty half the time. People with spare bedrooms can let them part-time for extra cash. The system, when used properly (more on this in the next post), works beautifully: underutilised resources (like empty space) can now be optimised. There are also services that will let you rent out your car, your tools, spare desks at your office, and a dizzying array of other stuff you might have lying around.
This is a good thing. Platforms that responsibly facilitate peer-to-peer commerce benefit everyone: vendors get access to new markets and revenue streams that previously didn’t exist; buyers get unique items or experiences with a personal touch and good value for money; the platform provides security and convenience to both parties and takes a cut in return.
Exactly none of this is about sharing. This isn’t about lending a cup of sugar to the nice lady next door. This is about cash. The difference is that it’s about cash moving from person to person, facilitated by a corporate entity, instead of from person to corporate entity.
I’m under no delusions that I’m going to get people to stop calling it the sharing economy. But it is bullshit, and I refuse. I’ll carry on calling it what I think it actually is – peer to peer commerce – although HBR’s piece on ‘access economy’ resonates too. Their point is slightly different, closer to something I wrote about in Fjord’s 2013 trends, under the header ‘Access is the new Ownership’.
All due respect to Mr. Shakespeare, names matter. They colour our perceptions. ‘Sharing’ sounds fluffy; ‘commerce’ sounds solid. The misrepresentation is damaging: on the one hand, it comes off as rather dismissive of a hugely profitable and growing sector. On the other, it belies and belittles the systemic impact these businesses (for better and for worse) can have.
Because one important caveat on all of the above is that these benefits come when these peer to peer commerce platforms are used responsibly. When they’re not, bad things happen. Next time, I’ll post about what happens when it all goes wrong.