Sharing Economy -- What Are We Really Sharing?

There is something inherently wrong with the term 'sharing economy.' It sounds very progressive and the widening wealth gap makes these opportunities appealing, but if you remove the layers, you realize that it not all it's cracked up to be.
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If you have not been caught in the whirlwind of sharing economy, chances are that you were living in a cave. Though cave renting is quite popular on Airbnb, so I am not sure if that's a valid excuse anymore.

There is something inherently wrong with the term 'sharing economy.' It sounds very progressive and the widening wealth gap makes these opportunities appealing, but if you remove the layers, you realize that it not all it's cracked up to be.

Take Uber for example, which is now valued between $60B and $70B, higher than companies like General Motors or Ford Motor. That's right, it is now 'worth' more than the companies that make the cars its drivers use. This is highly disturbing on many fronts. There is definitely an element of overvaluation contributed by private fundraising market bubble. Nonetheless, what does the multi-billion dollar ride-sharing company provide for its drivers? Well, they don't give sick leave, retirement options or pretty much any benefits. Obamacare's mandate of employer-provided healthcare does not apply to them because their drivers are "not employees."

There is a class action lawsuit against Uber to challenge this notion, but Uber is not alone with treating their workers as "independent contractors." This to me is quite reminiscent of the infamous "perma-temp" lawsuit where Microsoft paid $97M in settlement back in 2000. Though this exploitation is now very pervasive, thanks to "sharing economy."

OK, so there is not much sharing of wealth that goes around (unless you are one of the early investors), but what about other social benefits? Have you ever wondered why your ride sharing car shows up at your doorstep minutes after you book them with their app? It's because companies like Uber and Lyft have managed to flood the cities with their drivers. This, as you might have guessed, results in increased traffic congestion and pollution. Even by Uber's own numbers, it shows that it's making traffic worse.

What's also concerning is the power these companies wield over law makers. Back in July, Bill de Blasio's administration tried to cap the expansion of ride-sharing in New York City, but Uber marshaled lobbyists and consultants, spent millions on attack ads and overpowered that battle, which led to New York Magazine writing an article about whether Uber fight will haunt de Blasio in 2017.

Last year, San Francisco Chronicle found that two thirds of the Airbnb rentals in San Francisco were entire houses or apartments (not spare rooms offered by friendly hipsters), thus allowing landlords to circumvent rental laws. The main concern was that some Airbnb hosts may run full-time hotels and thereby reduce the city's housing supply. Due to mounting concerns, recently there was an initiative on the ballot to regulate short-term rentals in San Francisco (Prop F). Airbnb spent over $8M to lobby against the ballot measure and posted condescending ads about what the city of San Francisco could do with the tax that the company pays. Sure enough, it won!

There is an app called MonkeyParking, which lets someone grab a FREE parking spot that they can then sell to another person. As Wired put it, "The rub is that your parking spot isn't really yours. It's the city's." Then there are apps like GrubHub and Seamless that deliver food to your doorstep, except you may not really know where it's coming from or how it's being prepared. As it turned out, over 10 percent of the kitchens that had names or addresses failed to match any listing in the city's database of restaurant inspection grades. An expose recently done by I-Team, found that the food that was delivered to them came from a restaurant where "inspectors have found evidence of rats, roaches or mice" six times in the last two years.

The common theme across all these companies is that they have low to zero regulation, don't inherently produce anything other than connect people, massively profit from them yet share scraps, and most of the workers are "not employees." These services masquerading as "disruptive" and "sharing" are not going to go away. They are hugely popular for a reason. People like the convenience and efficiency they offer.

They have less overhead, more automation and arguably better service. They are profitable because they shift the burden of accountability and operational expenses from them to the people using and providing the services. This is great for the shareholders but not for the ordinary people. We need better laws to govern them. These companies need to be regulated so people are not exploited. I think the first step towards this long journey is to spread awareness so hopefully next time an initiative goes up on the ballot it yields a better outcome than what we have witnessed so far.

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