Wednesday 29 July 2015

The sharing economy could end capitalism – but that's not all


I wrote this article for The Conversation. Read the original article.

The sharing economy could bring about the end of capitalism: that’s the provocative claim made by economic journalist Paul Mason, among others. But my ongoing research indicates that there are many possible futures for the sharing economy: it could transform the world of work as we know it – or it could gradually fade from the public eye.

The exact nature and impacts of the sharing economy are still disputed. The organisers of social movements, entrepreneurs, established businesses and politicians all have very different ideas of what the sharing economy is, and what it should become. For example, Share the World’s Resource (a not-for-profit civil organisation) talks about building a sharing economy based on “shared” public services, which are funded by taxation.

Meanwhile, the UK government speaks of building a sharing economy based on online peer-to-peer platforms, which enable citizens to become micro-entrepreneurs by renting out assets such as homes, driveways and pets. So it seems that a diverse range of actors can see their own hopes, fears and values reflected in the sharing economy. But one thing is for sure: online platforms such as Airbnb and Uber have grown from Silicon Valley startups to global corporations, and this trend will probably continue.

Research on the economic, environmental and social impacts of these enterprises is scarce. As a result, there is very little evidence to help us understand how the sharing economy will develop. So I analysed approximately 250 sharing-economy-related articles and reports, which contained contrasting views from advocates and critics. Based on this evidence, I mapped out four possible paths for the sharing economy: and only one of them predicts that the sharing economy will bring capitalism to its knees, as Mason holds.


Consumption 2.0

Some have argued that online sharing platforms can enable a new form of collaborative consumption, where citizen access rather than own products. For example, peer-to-peer car sharing platforms, such as Easycar Club, enable individuals to rent out their car to others when they are not using it.


The idea is that these new forms of consumption have major environmental benefits. As these practices reduce consumer demand for products, this in turn reduces the number of products manufactured and ultimately decreases carbon emissions. If this form of innovation grows significantly, the sharing economy may enable a new form of consumption.

But this path seems unlikely to be transformative: simply using products more efficiently will not, on its own, lead to a sustainable economy. By engaging in more efficient forms of consumption within the sharing economy, people save money, which they then spend on other carbon intensive other products and services. For example, someone using a car sharing platform could spend the money they save on holiday flights, thereby increasing their overall carbon emissions.


New ways of working

Much of the interest in the sharing economy – particularly in the United States – focuses on online platforms which enable citizens to engage in new forms of work. For example, Uber enables car-owners with “spare” time to work as taxi-drivers. Airbnb enables property owners with “spare” space to work as hoteliers or landlords. Taskrabbit enables anyone with “spare” time to perform tasks including cleaning, shopping and other domestic errands. These platforms enable consumers (for instance, a tourist) and service providers (an Airbnb host) to form short-term relationships.


But sharing economy workers do not automatically have access to the rights and benefits of contracted employees, such as sick pay and annual leave. And as the recent swathe of cases brought against Uber and its contemporaries has shown, there is strong opposition to these conditions on behalf of the workers themselves, and those they compete with.

If this form of innovation grows significantly, the sharing economy may come to transform the world of work. But whether you view this a path to creating new opportunities for entrepreneurship, or promoting the exploitation of low-skilled or low-income workers, rather depends on your political beliefs and values.


A fair and sustainable future

Paul Mason is not alone in predicting that the sharing economy will bring an end to capitalism. Radical grassroots actors such as Ouishare and Shareable, who are critical of the capitalist economic system, are creating a sharing economy built upon the principles of collaboration, sustainability and equality.

They talk about a sharing economy of grassroots activities, ranging from cooperatives, to open source software and hardware, to crowdfunding, to the maker movement – a social movement which enables individuals to create products, challenging the dominant systems of large-scale industrial manufacturing.

This vision includes grassroots innovations as diverse as bread co-ops, open-source communities developing tools for reducing energy demand, Kickstarter and Fab Labs, which provide people with access to the tools needed to manufacture products.

These activities share a focus on empowering communities and creating a decentralised, sustainable economic system. If these diverse forms of innovation grow significantly then the sharing economy may, indeed, bring about the end of capitalism.


Fading away

Given the diverse visions of the sharing economy, it’s questionable whether the idea will stand the test of time. It’s possible that the sharing economy will lose meaning as a concept and gradually disappear from public, media and policy discussions.

Perhaps it will be replaced by concepts such as the gig economy – referring to platforms enabling new forms of work – or the collaborative economy – referring to grassroots action to create a more sustainable economy.


It’s hard to tell which path we’re currently on. I for one hope Mason is right, and that the sharing economy will bring an end to an unsustainable system. But I fear that it’s more likely to transform the world of work in a negative way, reducing quality of life for many within society. The people championing this path are those with great power within the capitalist economy.
Meanwhile, those advocating for a path towards a more equal economy – such as grassroots organisations – are currently marginalised and disempowered. It’s clear who the odds will favour.

The Conversation

Monday 20 July 2015

From the Sharing Economy to the Collaborative Economy: a transition of note for the research community?

Over recent months the concept of the sharing economy has begun to emerge within the discourse of the sustainability transitions research community: a transitions stream has been organised for the First International Workshop on the Sharing Economy; a PhD project focused on business-to-consumer and peer-to-peer models of car sharing has been advertised; and, Frank Geels noted engagement with the sharing economy as evidence of the dynamism of sustainability transitions research (see March 2015 Sustainability Transition Research Network Newsletter).  Perhaps, this interest reflects the growing media profile of, and government engagement with, the sharing economy. Indeed, it is becoming increasingly hard to ignore Airbnb; the Silicon Valley success story, which is so often used to exemplify the nature of the sharing economy.

However, the definition and scope of the sharing economy is much contested, and definitions which reflect the multifarious uses of the concept in practice remain elusive at best (Schor, 2014). Perhaps, the dominate definition has been offered by Botsman (2013), who argues that the sharing economy is an economic model built upon peer-to-peer platforms and “based on sharing, swapping, trading, or renting products and services, enabling access over ownership”. Furthermore, advocates including Botsman and Rogers (2010) argue that the sharing economy possesses the potential to disrupt the practices of hyper-consumption prevalent in market economies, and hence bring major environmental and social benefits. However, the sharing economy has also garnered strong critiques, amongst the most scathing Morozov’s (2013) claim that the sharing economy is a form of “neo-liberalism on steroids”. Such divergent arguments, and a growing profile, make the sharing economy a fertile domain for researchers, and the sustainability transitions research community is not alone in struggling to keep place with developments in practice[1].

Before engaging with sharing economy - to understand sustainability impacts and processes of innovation - as a research community we might benefit from engaging with the latest developments within the niche. Indeed, having done so, I have found that much of the discourse now expands upon the central ideas advocated by Botsman and Rogers (2010) - – i.e. new digitally mediated business models which enable access over ownership. My observations of the Ouishare 2015 Fest[2] – attended by approximately 1000 activists, social innovators, entrepreneurs and innovation intermediaries – suggest that many niche actors are distancing themselves from the concept of the sharing economy (as defined in the narrow terms above). Whilst, within the niche the concept of the collaborative economy has also emerged - and has been the topic of lengthy discussion at the Ouishare Fest - driven by concerns around the unsustainable nature of the prevailing capitalist economic paradigm. OuiShare (2015a), a think and do tank and network of innovators, define the collaborative economy:

“as initiatives based on horizontal networks and participation of a community. It is built on "distributed power and trust within communities as opposed to centralized institutions" (R. Botsman), blurring the lines between producer and consumer. These communities meet and interact on online networks and peer-to-peer platforms, as well as in shared spaces such as fablabs and coworking spaces.”

Similar visions of a broader sharing economy or collaborative economy have also been offered by other niche actors, and actors working at the interface between the niche and the regime (e.g. Nesta (Stokes et al., 2014), a major UK based innovation charity). Such visions share a critique of the centralised structures of the market economy, and herald the potential of, and need for, digital and social innovations which empower citizens to promote sustainability and equality. Hence, the concept of the collaborative economy connects with active research areas, e.g. grassroots innovation (Seyfang and Smith, 2007), and areas which have tended to be overlooked, e.g. digital innovation (with notable exceptions including Smith et al., 2013).

To conclude, I suggest there is a considerable opportunity for the sustainability transitions research community to develop and pursue a sharing economy research agenda that engages with both mainstream and emerging niche visions. In particular, the emerging concept of the collaborative economy is related to, but distinct from, the mainstream understanding of the sharing economy, and is hence also in need of further research. In pursuing such an agenda, a transdisciplinary research orientation might have an important role to play in supporting the formation of a robust sharing (or collaborative) economy niche with the potential to contribute to a wider transition to sustainability.

References
Botsman, R. 2013. The Sharing Economy Lacks a Shared Defintion [Online]. Available: http://www.collaborativeconsumption.com/2013/11/22/the-sharing-economy-lacks-a-shared-definition/ [Accessed 8th January 2015].
Botsman, R. & Rogers, R. 2010. What's mine is yours: how collaborative consumption is changing the way we live, London, UK, Collins.
Morozov, E. 2013. The 'sharing economy' undermines workers rights [Online]. Available: http://evgenymorozov.tumblr.com/post/64038831400/the-sharing-economy-undermines-workers-rights [Accessed 8th January 2015].
Ouishare. 2015a. The Collaborative Economy [Online]. Available: http://ouishare.net/en/about/collaborative_economy [Accessed 21st January 2015].
Ouishare. 2015b. Ouishare Fest 2015: Lost in Transition? [Online]. Available: http://2015.ouisharefest.com/ [Accessed 26th May 2015].
Schor, J. 2014. Debating the Sharing Economy. Available: http://greattransition.org/publication/debating-the-sharing-economy [Accessed 19th January 2015].
Seyfang, G. & Smith, A. 2007. Grassroots innovations for sustainable development: Towards a new research and policy agenda. Environmental Politics, 16, 584-603.
Smith, A., Hielscher, S., Dickel, S., Soderberg, J. & Van Oost, E. 2013. Grassroots digital fabrication and makerspaces: reconfiguring, relocating and recalibrating innovation. Available: https://www.sussex.ac.uk/webteam/gateway/file.php?name=2013-02-swps-aps-sh-gdf-working-paper.pdf&site=25 [Accessed 8th January 2015].
Stokes, K., Clarence, E., Anderson, L. & Rinne, A. 2014. Making Sense of the UK Collaborative Economy. Available: http://www.nesta.org.uk/sites/default/files/making_sense_of_the_uk_collaborative_economy_14.pdf [Accessed 21st January 2015].




[1] A search of the Scopus database of academic literature for the term “sharing economy” returns 39 results [22nd May 2015].
[2] The theme of Ouishare Fest was “Lost in Transition?” which the organiser expanded upon as follows: “Transition, transformation, shift: these are words we hear a lot lately to express how the economy, environment, politics and business are changing. What exactly are we transitioning to? What direction would we like to go in? What could a collaborative society look like?” (Ouishare, 2015b)