The “Sharing Economy” and “Casual Labor”

Sharing Economy

Over the last decade the meaning of the verb to share has been perverted. Look it up in the dictionary, and you’ll find words like apportion, divide, distribute, take part, receive equally. All those definitions make sense. Friends sharing a meal are taking part in a common activity. Two kids sharing the last cookie are dividing it (hopefully into equal parts) so that both can have their treat. There is also the sharing of a burden. Again, a task is divided into different segments and those involved pitch in to make sure the task it completed. Sharing is voluntary. Sharing means the creation of a community even if it’s just for the moment it takes to divide the cookie. It implies mutuality.

Sharing does not imply a contractual transaction. It doesn’t imply buying or selling. The grocery story isn’t sharing its pears with me when I buy them. My ISP isn’t sharing its broadband with me when I subscribe to its service. So, why do we call the services provided by Uber drivers, by AirBnB hosts and similar companies sharing? It is simply a commercial transaction. Money changes hands in exchange for goods or services. The only difference between an Uber taxi and a regular taxi is the price, insurance and regulations. And taxis don’t get to gouge you with surge pricing, Uber does. The only difference between a B&B and AirBnB are taxes and regulations. Oh, yeah, Uber and AirBnB have apps. Which apparently makes them cool.

Ashland, the town where I live, went through a long discussion over permitting AirBnB to operate. On the one side were the owners of regular B&Bs who paid lodging taxes and had to make sure their facilities were up to code. They were understandably upset that others made their money without paying the taxes or having inspections by the health department. That’s the first insidious aspect of the business model of the “sharing economy.” It facilitates perfectly normal business transactions but allows the parties to that transaction to make an end run around government regulations and the taxes levied on such business activities.

The proponents of allowing AirBnB rentals in Ashland argued equally loudly that being able to rent out a room was an important part of their income. Some explained that without the income from AirBnB, they’d have trouble making ends meet. Others couldn’t afford to pay property taxes without it. Here we have the second insidious aspect of the “sharing economy.” The failure of the formal economy to provide living wages and stability pushed people to moonlighting in the “sharing economy.” The sad irony is that the factors that necessitate the “sharing economy” and are further exacerbated by it. It’s similar to the way in which income stagnation makes stores like Walmart a necessity even though Walmart significantly contributes to that stagnation.

Uber claims to be a “disruptive” force, but the new paradigm it pushes—no benefits, no health care, no retirement—isn’t new at all. Businesses have attempted to evade labor and social security legislation for a long time. Turning employees into casual independent contractors is the easiest way to do that. FedEx Home did that a long time before Uber. All Uber and companies like it are doing is giving that form of exploitation a hip, cool appearance. Yeah, we got an app.

One might claim that businesses should not be responsible for the provision for insurance, a living income and retirement. I might even agree with it. Public healthcare provision, or minimum guaranteed income and pension are logical alternatives. But that requires a government with the wherewithal to provide such services. And here is the the third insidious aspect of the “sharing economy.” Its supporters don’t want to pay taxes. They want to operated as if they were a part of the “informal” economy, no regulations and no taxes.

The “sharing economy” is an Ayn Rand devotee’s pipe dream come true. Come to think of it. Most of these startups are headed by young men barely out of college, the prime pool of Ayn Rand follower. Hmm, I wonder if that …. Nah, it couldn’t be that simple.

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2 thoughts on “The “Sharing Economy” and “Casual Labor”

  1. Matt

    I suppose full disclosure is in order: I have used AirBnB with mixed, though mainly very agreeable, results. I’ve never used Uber. The University I work at provides a rather generous amount of money to support conference travel each year but we just received an email from the staff who process our claims that the University will not be reimbursing AirBnB for lodging; we must go through the University’s contracted travel agency or deal directly with hotels. Now the generosity of the support I get notwithstanding, I do attend enough conferences in the year that my budget won’t stretch to cover them and I end up subsidising the University by having to cover my own costs when I go past the budget allocation. And given that money is supposed to be tight in these austere times, I’m a bit puzzled as to why the much more economical alternative has been ruled out (I haven’t seen an explanation as to why AirBnB receipts won’t be reimbursed, though there may be various reasons, as your piece suggests).

    I know, I know: First World problems. But I take the thrust of your argument here to be that these are not “economic” problems at all, or rather, if they are it is because the space for addressing the politics has been reduced or eliminated: economics instead of politics. My University is quite happy to have me enhance its international reputation by attending conferences and happier still that I’m willing to pay for the privilege; it’s also happy to have simplified its procedures by outsourcing to a travel agent (and to security contractors for risk analysis, etc.) even though the costs for travel are inevitably higher as a result. A contradiction that cannot be addressed in an unaccountable, hierarchical decision making structure. So for you, at least, there is a silver lining in Ashland: you got to have the conversation and keep the space for politics somewhat more open.

  2. Michael Niemann

    I guess I should have added my own disclosure. I’ve used AirBnB once, attending Bouchercon in Long Beach last year. I must say it was an agreeable experience, too. I like the way you put it: it’s become an economic problem because the political space to negotiate these issues has been reduced or eliminated. The story of Uber in Portland, OR, tells how much bullying the company engages in to achieve its goals: