Q&A: Why Does the Sharing Economy Matter?

Amid a rapidly rising cost of living, many in the San Francisco Bay Area have been embracing the sharing economy movement. Through it, participants divvy up their access to products and services, be it a bike or entire apartment, rather than take individual ownership.

It's not surprising that Share, the first conference devoted to collaborative consumption, is taking place in San Francisco on May 13 and 14. I spoke with Natalie Foster, one of its speakers and co-founder of Peers, about her umbrella organization, the challenges of the sharing economy, and how it's moving forward in the Bay Area and beyond.

How did Peers begin?

While D.C. was in gridlock, people across the United States were doing really inspiring things, building a different kind of economy, building a bottom up economy. People were forming babysitting cooperatives and time-banks, all the way to emerging businesses that were connecting people who have something with people who need something. I found this really inspiring and wanted to help it grow.

People were popping up all over the globe doing similar things, but weren't necessarily connected and that's what we've solved with Peers.

And what would a local Peers group in San Francisco do for example?

Last year we launched a roundtable dinner with Peers and urged our founding membership -- at that time we had only about 18,000 members -- to hold dinner parties in their neighborhoods. We thought we'd have a couple dozen, we thought they'd be in the big cities and we were totally blown away. We had hundreds of people respond, and we ended up with 120 dinners around the globe, totally member-driven, totally self-organized dinners from Tel Aviv, to Lithuania, to China to Lincoln, Nebraska, as well as Brooklyn and San Francisco. Now, Peers is over 250,000 members strong.

These events are a great mix of urban, rural and truly global where people came together and talked about the sharing economy in their cities. Some have been involved with the sharing economy for a long time, and some are brand new. Those are a few things a local group does: holds forums, holds dinner parties, organize the movement in their city.

And what are the challenges that the sharing economy faces? Some sites such as Airbnb are up against legislation. Have you seen cases where people are trying to cut back on it due to business competition?

In New York, the attorney general gave a subpoena to Airbnb, asking for information on all of its hosts. And the way they can do this is that the law isn't clear and people sharing their homes with others exist in a grey area. The thing is, a lot of sharing activity exists in grey areas. The laws were written for an old economy that has a lot of centralization and purchasing directly from some sort of centralized business, as opposed to people transacting directly with one another. The decentralization and the peer nature of the sharing economy means that a lot of laws need to be updated, from food to housing to transportation.

In many states, peer-to-peer car sharing, where I have a car that I don't drive that sits idle and I want to rent it to my neighbor, is not legal. So there is all kinds of work that needs to be done for cities to update their laws.

Even larger than a legal battle is unraveling a decades old sense of mistrust and a type of consumerism that I think people are programmed to have. One of the things that's so powerful about the sharing economy is that it taps into this authenticity, where I'm able to connect with people to provide the sorts of experiences that I want to have. I can access even more if I'm sharing different things with my community. And that challenges long-held notions of consumerism.


The common currency in the peer economy is trust, and I think that's challenging for some people. People realize one of the best parts of the sharing economy is that I don't have to know you to trust you, I can see everyone else who's shared with you and therefore trust you with staying in my home, with using my car, or with participating in a skill share or babysitting cooperative.

Perhaps it's part of a cultural shift and a different way of looking at things. I've been using Couchsurfing.org since 2006, and when I first started people's minds were boggled that I would travel and stay with complete strangers. I often got the "What if they're an axe murderer?" type of question, and now it's much more mainstream. I say I've couchsurfed and no one even flinches about it. So within even six or seven years, I feel there's been a big shift in the views on sharing, and trusting strangers.

These are all great observations. Another important piece of the conversation is safety. I think safety, especially for women, has been heightened. You don't personally know who you're staying with, or whose car you're getting into, but you have a lot of data to draw on that helps to inform your decision. For example, ridesharing companies have made significant improvements to their services, offering insurance and increasing verification programs, so users are provided with the highest level of security available.

I'm sure the sharing economy is especially important in a place like San Francisco where the costs of living have skyrocketed. Perhaps with all the carsharing and sharing services in general, it makes it a little bit easier.

There are a ton of Peers members who are able to keep their homes in San Francisco by renting out a room to someone from around the world, as well as families who are part of babysitting cooperatives, food exchanges, or baby clothing swaps that all help save money. I think it's the need that's fueling the Peers experience, but also the authenticity and the connectivity. You know, the community that comes from that.

But cities will have to deal with housing, and this country will have to deal with income inequality as do many countries around the world. The sharing economy can't solve that. But while those politics are playing out, people are doing something very extraordinary.

Photo courtesy of Natalie Foster.